How to Use the Ichimoku Kinko Hyo Indicator in Forex Trading

By Eadfrith Scott  |   Submitted On August 01, 2011

In this article I will go over an indicator that is very dear to my heart, the mighty Ichimoku Kinko Hyo.
The Ichimoku Kinko Hyo has been around since before World War II when Goichi Hosoda created it for use on the Asian stock markets. He tested it until 1968 before releasing it to the public. It was only in the 1990s when it became noticed in the West.
The name Ichimoku Kinko Hyo translates to "Equilibrium Chart At A Glance" which is a perfectly apt description of how the indicator works. It shows the trader, at a glance an extremely detailed picture of price sentiment, strength of trend and support and resistance. A holistic picture if you will, that allows the experienced practitioner to tell very quickly whether a potential trade is a high probability or low probability in terms of banking profits.
An Ichimoku chart is actually made up of five distinct indicator lines that form the overall picture. These are described below:

• Tenkan Sen which is the highest high plus the lowest low all divided by two, over the previous nine periods.


• Kijun Sen which is the highest high plus the lowest low all divided by two, over the previous twenty six periods.


• Chinkou Span which is the current closing price shifted twenty six periods into the past.


• Senkou Span A which is the Tenkan Sen plus the Kijun Sen all divided by two and shifted twenty six periods into the future.


• Senkou Span B which is the highest high plus the lowest low for the last fifty two periods, all divided by two, shifted forward twenty six periods into the future.

Another important Ichimoku structure is The Kumo, or "Cloud". This is the area between the Senkou Span A and Senkou Span B and is a key part of the Ichimoku Kinko Hyo. It represents key support and resistance levels but compared with traditional support and resistance lines, the Kumo shows a multi-dimensional picture. The thickness of the Kumo is an indication of how strong the support or resistance is. The thicker the cloud, the stronger the support or resistance will be. Also, given how the Kumo is plotted into the future, it gives a prediction of support and resistance levels to come. This is incredibly powerful, since most indicators are all lagging and reacting to price.

For example, if price was to quickly break through a thick Kumo you would have an indication that the move was extremely strong. The area in the middle of the cloud is called the equilibrium area and price in this zone is unpredictable and the experienced Ichimoku trader will not place trades in these areas.
The Kumo also has it's own built-in sentiment which you can use in conjunction with the price sentiment. Notice in the chart above that the Kumo changes colour after it pinches together. When the Senkou Span A is above the Senkou Span B, the Kumo is said to be bullish. Conversely when the Senkou Span B is above the Senkou Span A, the Kumo is said to be bearish. Again, because the Kumo is plotted into the future it can give you advanced warning of a change in price sentiment. Try getting that from a couple of Moving Averages!

The Kumo can also have flat tops and bottoms and these are important structures. They exert an almost gravitational pull on price. You will notice that when price breaks out of the Kumo and there is a flat top or bottom that price will often snap back to the flat Kumo. With experience you will be aware of these and ensure you do not get into a fake breakout trade by ensuring that price has broken free of the gravitational pull of the Kumo.

With all that said, how does one go about trading based on the Ichimoku Kinko Hyo? Well a full discussion of this is beyond the scope of this article but there a few basic situations that constitute trading signals of varying strengths and these are discussed below.

Tenkan Sen Kijun Sen Cross
If the Tenkan Sen crosses the Kijun Sen then that is a potential signal. If the the Tenkan Crosses above the Kijun then it is a bullish signal and if it crosses below the Kijun Sen it is a bearish signal. Fortunately the Ichimoku gives us more information to help us refine these signals. If a bullish cross takes place above the Kumo, then this is a strong bullish signal. If the bullish cross takes place below the Kumo then it is a weak bullish signal. Finally if the bullish cross occurs inside the Kumo then it is seen a a neutral bullish signal. The opposite is true for bearish crosses. A strong bearish cross would be the Tenkan crossing below the Kijun underneath the Kumo and so on.
However we are still not fully refined in terms of the strength of the signal. We can also consider the Chinkou Span. This is often referred to as the "final arbiter" that can either confirm or deny a trade. The general rule is that if the Chinkou Span is above the price action when a bullish cross has takes place, it adds more weight to the signal strength. The reverse is true for bearish signals, the Chinkou Span being below the price action adds more weight to a successful outcome of a short trade.
So one very powerful trading strategy is to wait for a strong bullish or bearish Tenkan/Kijun cross with Chinkou Span confirmation. These require patience but are very reliable signals.

Kumo Breakout
This signal is where price breaks clear of the Kumo, either above or below. A long trade would be indicated when the price action breaks above the Kumo and a short trade would be indicated when price breaks below the Kumo. You can also use the Chinkou Span as in the Tenkan / Kijun cross described above. You should also use the Kumo's built-in sentiment to confirm a long or short trade. Finally by paying attention to the dangers of the flat top or flat bottom Kumos, one can further add to the strength of the signal or discard it as too risky.
Hopefully this has given you a good introduction into the Ichimoku Kinko Hyo. If you have any questions, please just drop me an email and I will be happy to help you. I have been trading this for over a year on the longer time frames and it works extremely well.

Click HERE to get my free weekly Forex trading newsletter that covers trading strategies, indicators and trading mentality. If you are struggling to be consistently profitable in your trading then I urge you to read more at http://profit-with-forex.com

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7 Tips On How To Choose A Good Forex Trading System

By Mark Hamburg  |   Submitted On June 22, 2006

You know, one of the most important things to think about, when starting to learn forex trading, is how to choose a good forex system.
Why is this so?

Well it's because we want to trade a system that's worth the time and effort. Each forex system is different in several important ways (as you'll find out), so you want to make sure that it is one that you want to trade, before investing time and money (and effort!) into learning the system.
We ultimately want to find and trade a forex system that's profitable enough for us (and this is different for everybody!), that has an acceptable drawdown (some have very decent drawdowns - this is vital for most of us), and that actually fits into our daily routine (that is, we can actaully trade and not be stressed!)
When any of these 3 factors are not there, we find ourselves not able to start or continue trading the system.
In the meantime, we could be making money trading forex if we did have a suitable system!
So what we must do, is choose a forex trading system based on some important principles to ensure we actually benefit from trading, rather than causing frustration and lost time.
By the time you finish this article, you'll know how to choose a forex system that you can trade, and that's sure worth putting in the time to learn!
When looking at a forex system, consider closely:

1. The profitability of the system, shown as either pips per month, or dollar amounts based on a certain float size.
Profits are most commonly quoted in pips per month. The reason why this method is popular, is because it is one way of comparing between systems, though people may be trading different face values.
What you have to be careful of when looking at the pip profits per month however, is that the face value that's traded with any given float will depend on the average risk per trade, which in turn depends on the average stop loss distance for that system, if a fixed risk model is used. And this determines the dollar profits that will result from any float.
Say you want to trade with a 2% fixed risk model. If the average risk per trade in the first system is say 30 pips, and is 60 pips in a second system, then the average face value would be twice the size in the first system for any given float. If both systems produce the same average pip profit per trade, say 100 pips, the first system will, in terms of dollar amounts, produce the higher profit.

2. The maximum historical drawdown of the system.
This may be expressed as pips, or as a percentage of the cash float used when testing the system performance. For example, if the maximum historical drawdown was $2000 based on a $10 000 cash float, then the drawdown is 20% (as a percentage of cash float).
The maximum historical drawdown of a system is the largest decrease in equity that has occurred in the past during backtesting or trading of the system. You can use the drawdown to compare between systems, but you can also use the drawdown to figure out the amount of funds you'd need to start trading the system.
In the example above, you'd need at least $12 000 in the beginning in case a drawdown occurs when you first start trading, not years down the track.

3. The "profit-loss" ratio of the system.
This is the average size of winning compared to losing trades. A high ratio here signifies a degree or robustness in the system, but this figure should always be looked at together with the "win-loss" ratio of the system, which is the percentage of winning trades compared to losing trades.

4. A high win-loss ratio for a forex trading system is a bonus in that the system may be easier psychologically to trade.
Ultimately though, it's the combination of both that counts. That is, if the "profit-loss" ratio multiplied by the "win-loss" ratio is greater than 1, then the system is profitable. Ideally you'd want this ratio to be 2 or 3 or more to ensure that the system is significantly profitable, not borderline.

5. The consistency of the system.
If you can find a highly profitable system that has a reasonable drawdown, and is very consistent, then this is ideal. There's a sweet spot for everybody. You may accept a slightly higher drawdown and slightly less consistenty, if the profitability was significantly higher, while others may prefer a different combination of the above. Look at the monthly, quarterly and yearly results to best tell this.

6. The amount of time it takes to trade the system per day.
Some systems take only 15 minutes four times day, while others need a few hours. Some forex trading systems on the other hand trade only at certain known times, such as when major economic announcements occur. So you know in advance when you actually need to be at the computer. This ultimately depends on how much time you have.

7. Is the forex trading system systematic, discretionary, or part-discretionary?
Now this is where you may have a preference depending on your past experience as a trader. Some traders prefer mostly or 100% mechanical systems where there's not much room for discretion. The advantage of mechanical systems is that the analysis may be simpler, and there's less need to learn discretionary skills that come from real-time paper and live trading. However many systems that are very profitable can't be made into completely mechanical systems. Finding the type that suits you is important here. Some people who are used to trading 100% mechanical stock or CFD systems find they need some adjustment time to get used to these kinds of forex systems!

So there you have it.
The above points should be kept in mind when checking out various forex trading strategies and deciding which one is worth learning.

If you know what you're looking for, you'll save time and effort later on as you would have chosen a system that was worth learning and trading! If you're inexperienced at assessing systems, keep practising, and you'll soon get an idea of the actual returns and drawdowns that currency trading systems are capable of (without the hype).

Mark Hamburg helps you to go from forex trading novice to actually understanding what forex trading systems are all about. To get more valuable tips, hints and tutorials on successful forex trading, go now to his site on successful forex trading to grab your tutorials!

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Currency Trading Systems - Making Money from the Longer Term Trends

By Stephen Todd

Currency markets never sleep and several trillions dollars are traded everyday, making currencies the world's biggest and most exciting investment market.
In recent years, mechanical currency trading systems, using technical analysis to predict trend movements have become increasingly popular as a way of locking into, and profiting from the longer term currency trends.
Making Money from the Longer Term Trends
Currency trading systems are ideal for making profits from longer-term currency trends, and they occur in all currencies.
The longer-term trends in FOREX markets reflect the health of the economy.
As economic cycles are relatively long and take years, so do the currency trends that reflect these cycles.
A good currency trading system can enable traders to lock into, and make profits from these longer-term trends.
When choosing currencies to trade, it is important to have good long-term trends, but just as important is liquidity, which enables traders to lock in profits and exit losing trades quickly.
Currencies that offer good trends and liquidity include:
· The US Dollar
· Swiss Franc
· Euro
· Japanese Yen
· British Pound.
Currency trading systems remove emotions from trading, which is the major reason the majority of traders end up losing.
Removing the Emotion from Trading with Systems
There has been plenty of material written about using currency trading systems, and the works below provides informative reading for anyone thinking of using a currency trading system.
Traders should try to read the following authors:
Edwin Lefeurve, Jake Bernstein, Larry Williams, Ken Roberts, Van Tharpe and Jack Shwager whose books "Market Wizards" and "The New Market Wizards" interview some of the most successful traders of all time, including the "turtles". The Turtles are group of traders who had no prior trading experience, but went on to earn hundreds of millions of dollars, using very simple mechanical trading systems.
Currency Trading Systems that Make Money
The developments in recent years in computer software, the growth of the Internet, and online trading, has seen currency trading systems become more popular than ever.
Software Packages such as Tradestation, Supercharts, Omni trader, and many more, allow traders to back test systems, using a variety of technical indicators that include:
· Stochastics
· Bollinger bands
· RSI
· moving averages
· ADX
And many more.
The currency trading system picked can then be analyised, to see how it would have performed in the markets with commissions and slippage deducted.
Traders, who don't want to develop a currency trading system, can buy systems off the shelf from vendors.
How do you Choose a Successful Currency Trading System?
If you are buying a currency trading system, there are several things to consider before parting with your hard earned cash:

1. Are you interested in being a day trader, or a trader looking for longer-term trends? You need to pick a system that you're comfortable with and this is mostly down to personal preference. Some traders like the excitement of day trading others prefer a longer-term approach.

2. Do you want to have any input into the system, or do you want it to be totally mechanical?

3. Do you want to trade just one currency, or a basket of currencies? Using a currency trading system that trades just one currency can be more profitable but keep in mind, the converse is true, i.e losses and drawdowns can be larger.

4. When choosing a currency trading system you need to have confidence to trade with it, and follow the system through losing periods. To do this you should know the logic the system is based upon. If you understand the system and its logic, you will derive confidence and be more likely to follow it - in contrast to one where the logic is not revealed.

5. What are the average profits you can expect in relation to drawdowns? All currency trading systems will have periods of drawdown and losses. Generally the larger the profits the bigger the drawdowns tend to be over time - so pick a system that reflects your investment aims and risk tolerance.

6. When you are buying a currency trading system, check out the system seller's experience, track record, customer support, - and whether they have a real-time track record, or a hypothetical one.

A real time track records means the system has performed in the market and made money, i.e it's proven. Trading systems that simply rely on hypothetical track records mean they have been back tested, - and with the benefit of hindsight we can all make money!

While hypothetical track records should be treated with a degree of caution, you can find out a lot about whether the system is likely to make money, by knowing the logic the system is based on.
When considering a hypothetical track record, look for one where the logic is revealed and not a "black box" system where you have no idea how to system works.

In conclusion, you can make your own currency trading system, or you can buy one from a vendor - when choosing one from a vendor make sure you do your homework, and remember - if it looks too good to be true, it probably is!

Currency trading systems can, and do make money, and the effort you put into finding the system that suits your personality, risk tolerance, and profit objectives, will be time well spent.

We have lots more currency trading articles to help you sharpen your trading skills, on our web site. New! Free Currency Trader CD available through our web site! You can grab this valuable CD, which contains 9 critical reports on how to improve your trading. Everything you need to trade successfully is enclosed, including tips strategies and trading systems [http://www.tradercurrencies.com/trading-currencies-articles-sitemap-2.htm].

To claim your free trading CD, visit our web site now ==>[http://www.tradercurrencies.com]

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Fibonacci Technical Analysis of Financial Markets

By John C Burford

In a previous article, I showed how it is entirely possible to make profits in trading the financial markets, by using simple Fibonacci sections of waves that occur in all markets. This has the advantage that simple Fibonacci charts can be used, without the need for complicated technical indicators.

The Fibonacci sequence is derived from the natural growth sequence of 2, 3, 5, 8, 13, 21, 34, 55 and on to infinity. I showed how the ratio of each number is related to the one before it by the ratio of 1.618.., and to the one just ahead of it by the ratio 0.618.. Interestingly, these ratios still apply if any starting point is chosen! So that a sequence starting at, say, 15, would have the sequence 15,15,30,45,75,120,195,315, and so on. This would produce the same ratios of 1.618 and 0.618! The Golden Ratio, or Golden Mean, 1.618, is given the name phi.

Growth in nature (rising markets) is expressed by 1.618 and 1.618 squared ( = 2.618). Decay (falling markets) is expressed by their inverse fractions, 0.618, and 0.382. But of course, growth of all natural things takes place in spurts, followed by set-backs, and then another spurt, and so on (3 steps forward and 2 steps back). Through observing many stock charts, early technical analysts discovered that when a market makes a solid move (up or down), then the corrections often stop at Fibonacci numbers of 0.618 (61.8%) or 0.382 (38.2%) of the wave's move. Further out, if we look at 1.618 cubed (4.236), its inverse is 0.236 (23.6).

This can work on very short-term charts and even monthly charts. A good example is that of the British Pound/Dollar. At the start of 2008, the Pound was trading around the $2.00 area, but then suffered a massive decline starting in July 2008 and bottoming in January 2009 at 1.3460 area. It then staged a strong rally, topping at 1.7050 area in August 2009. It has since then dropped to a recent low of 1.4216 on May 20th 2010. This level represents a 76.4% retracement, or 23.6% from a complete retracement. The chart looks very beautiful. I have been looking for a low-risk entry point to go long since then.

I have found that deep retracements of 61.8% and 76.4% are very common, and often give us a low-risk entry point for a trend change. If I do Fibonacci charting to find a retracement level with a complete 5- or a 3-wave Elliott pattern, together with a divergence in a momentum oscillator, then I have a very high potential winning trade. Choosing Fibonacci retracements allows me to place close protective stops (in case I am wrong).


If you ever wanted to know how to make money trading the financial markets, you have come to the right place. I was a professional futures trader for many years, and have seen just about everything the markets could throw at traders.

Visit my websitehttp://financialtradingstrategies.com where I offer resources that I personally recommend. To look over my shoulder and sneak a peek at my trading in real time, visit my blog http://financialtradingstrategies.com/wpblog/
FTSTrader

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Four most important trading skills You Won't Learn in Forex School

1 . Thinking long term rather than short term

Most traders starting mistakenly believe the hype that the currency market is a place where you can make a fortune overnight . Good forex school teach their students the fundamental lesson that it takes time to make money. Trying to make a lot of money in both markets can only end in disaster if you're really lucky. Keep in mind that the only way to earn consistent profits in the forex markets is to negotiate the use of leverage, but also significantly increases the amount of money you can lose .

2 . Learn to be patient

It takes time to learn how to trade successfully , rather than thinking that after only a few courses , you will be successful at a time . In addition to the courses that you will learn in Forex school  , will also have to spend hours of practice with demo accounts before real accounts . They say that it takes 10,000 hours to become an expert in something, and you have to put invest all the needed time to develop a successful strategy , because won't happen overnight .

3 . Develop a trader mindset not a gambler one

A trader must accept his losses because nothing is worst than letting running losing trades  rather than closing then when it's against him and hoping that the trade will reverse in  his favor .

4. Managing your risk

Every time you open a trade, there is always the chance that will go against you and you lose your money . For this reason, you must develop skills of risk management that will help you manage your risk so that you will be able to make successful trades . An example of risk management is to trade just the amount of money you are able to loose of your trading capital . This will limit your losses in case you fail to reach your take profits targets . Of course, this does not prevent you increase the amount ventured on your trades in case you feel the market is in your favor.

Top 10 Investment and trading Books every Investor Should Read

Photo by Olesia Buyar on Unsplash

Internet can be one of the best and fastest way to learn to invest. But if you are looking for a historical perspective on investment or analysis of a particular topic, there are several classic books on investing for great reading. Here we give a brief overview of some favorite investment books of all time and put you on the road to investing knowledge.

"Irrational exuberance" (2000) - Robert J. Shiller 
 Shiller's book, published in March 2000, gives a chilling warning of the imminent collapse of the Internet bubble. The Yale economist discredits the myth that the market is rational and explained in terms of emotions, herd behavior and speculation instead. In an ironic twist, "irrational exuberance" was released almost exactly at the forefront of the market.

"Learn to Earn" (1995), "One Up On Wall Street" (1989) and "Beat the Street" (1994) - Peter Lynch 
"Learn to Win" targeted younger audience and explains many business , "One Up On Wall Street" makes the case for the benefits of self-directed investment, "Beating the Street" focuses on how Peter Lynch picked winning (or how he lost them) while managing the famous Magellan Fund.the three books follow the 'common sense approach, which emphasizes on the fact that small investors take time to do their homework, it can perform as well or better than the experts.

"Stocks For The Long Run" (1994) - Jeremy Siegel 
A professor at Wharton School of Business Jeremy Siegel is the case - you guessed it - invest in long-term actions. It is based on extensive in the past two centuries to support not only that actions beyond all other financial assets, when it comes to performance, but also that equity returns are safer and more predictable against the effects of inflation.

"Common Stocks And Uncommon Profits" (1958) - Philip Fisher 
"Actions common and uncommon profits" teaches investors to analyze sectors and companies and its ability to produce profits. Originally published in 1950, Fisher lessons are still true sixty years later .

"The Intelligent Investor" (1949) - Benjamin Graham 
A classic bestseller of Benjamin Graham, perhaps the most influential investment figure of the 20th century, The Intelligent Investor has taught and  inspired hundreds of thousands of people worldwide. Published for the first time in 1949, Benjamin Graham's book still the most efficient and respected guide to investing, due to his timeless philosophy , it is interesting to read based only on the testimony of Warren Buffett "By far the best book ever written on investment."

"A Random Walk Down Wall Street" (1973) - Burton G. Malkiel 
This book popularized the idea that the stock market is efficient and that prices follow a random walk. In essence, this means that you can not beat the market. That's right - according to Malkiel, no amount of research, fundamental or technical, will help you in the least. Like any good academic, Malkiel defend his theories with a lot of research and statistics.

"Rich Dad Poor Dad" (1997) - Robert T. Kiyosaki 
This book explains several lessons about money that are being taught to children by their wealthy parents,
the middle class and poor parents neglect.
Robert Kiyosaki has a very simple message but it's a very important financial lesson that can motivate anyone to start investing: the poor make money working for it, while the rich make money by letting their assets doing their job. We can't find a better book to buy for your children's financial education.

 

"How To Make Money In Stocks" (2003, 3rd ed.) - William J. O'Neil 
Bill O'Neil is the inventor of the CANSLIM system. If you are interested on choosing the best stocks,Reading this book will give you a strong system that you can set to work immediately in your search.

"The Essays Of Warren Buffett: Lessons For Corporate America" (2001) - Warren Buffett and Lawrence Cunningham 
it's actually a collection of letters that Buffett wrote to shareholders in the last decades. This is a work of gathering techniques of one of the best investors in the world.

"Common Sense on Mutual Funds" (1999) - John Bogle 
This book begins with an introduction to the investment strategy before jumping to the mutual fund sector for exorbitant fees they charge investors. If you own mutual funds, you should read this book.

What Are Penny Stocks And How Do They Work?

By Matthew I Arthur

You might have heard a lot of people talking about penny stocks, and by investing in these stocks they were able to gain huge returns. You might be interested in investing in penny stocks to double your money fast. But, before blindly investing in penny stocks, it is very important for you to clearly understand what these stocks are, and how you can invest in them wisely, so that you can make a lot of money through this simple investment.

Introduction To Penny Stocks

The general description or feeling about penny stocks, is that it is a stock that trades for under $1. But, this is not the true definition of a penny stock. They are trading stocks on the stock market, and the biggest difference that you would see in the penny stocks and the blue chip company stocks is in the price of the stocks. Penny stocks are simply share prices of the smaller companies, small technology firms, mining companies and start up companies. The price per share of such smaller companies is very low when compared to multinational companies. Many people interested in doing stock trading invest their hard earned money in these kinds of stocks. All you need is a few hundred dollars to get started with a batch of developing pennies.

Is There Benefit In Investing in Penny Stocks?

Once you get to know what penny stocks are all about, the very next question that would come to your mind is the benefit that you will be able to gain by investing a small amount of money in the shares of small companies. Well, the best thing about these small stocks is that if it experiences a move in the price, this move will often be a huge and dramatic one in terms of percentage. If you are looking to gain good revenue through your investments, then you need to be working the percentages and investing in penny stocks that have a good chance of gaining in percentages.

Best Way To Start Investing

If you have a chat with leading financial experts and stock brokers, then they will all vouch that investing in penny stocks is the best way to step into the world of stock investments, solely for the purpose of learning. You will be learning the tricks of the trade of stocks and shares by investing in penny shares. They are the cheapest way of investing in stocks as you might even find certain stocks that are valued at 40 to 60 cents and you can even invest in hundreds or thousands of shares without needing to break the bank. You can also learn the nuances of stock trading through these tiny stock investments.

Never Worry About Cheap Stocks

The thought that you are trading in cheap stocks should never ever strike your mind when you are trading in shares. These lesser valued investments can change the fate of your life in the shortest possible time as any one of them can easily skyrocket in value very soon. As there are only a few traders who will be investing in these types of stocks due to its cheap value, there is every possibility for it to double, triple or even go up four times its initial value in a space of a few hours, or even sometimes in a few minutes time.

There's Also A Risk Factor

If you can make huge gains from penny stocks, the other side of it is that you could also lose all your money on a cheap stock that you have bet on. There is risk involved in any kind of investment, let alone pink sheet stock investments. Hence, if you are interested in trading in these stocks the safe way, then you need to depend heavily on analytical micro stock choosers. They are the perfect stock pickers who will be able to easily anticipate the behavior of the stock market and their main target is only the cheap stocks.

Invest With Caution

Even though penny stocks offer a large chunk of profits, these shares are quite vulnerable to be manipulated. If you are not very careful and cautious in picking out the right stocks, you can easily lose all your money that you had invested. It is important for you to find the honest and real small organizations to invest your money, as such investments will offer you tons of potential to earn handsomely. If a company seems to be having a bright future and is a promising small organization, then you can very well invest in their small stocks to get a hefty return on your investments. All you need to do is to take time to do research on the internet to spot such promising companies and you are sure to gain good payouts.

Tips To Invest In Penny Stocks

The following are the tips that you can use when you are thinking of penny stock investments.

• Do thorough research and proper planning before investing in pink sheet stocks of a company.
• Start out with small investments and slowly increase your investments on penny stocks.
• Invest in companies that have huge average trade volume.
• As penny stocks are highly volatile, always have an entry and exit plan ready and stick to that plan always.

Advantages

• Trading in penny stocks will be your guide to learning about the stock markets and how they perform.
• It is very easy to start penny stock trading as you do not need to put in a lot of investment.
• You have the opportunity to make more money in the shortest possible time by investing in mini stocks.
• These micro shares can also grow up to be traded in the stock market as mid cap stocks, thereby multiplying its value many times.

What I Think

It is important for you to invest in micro stocks with a little bit of caution and thorough planning. Make sure that you do not invest in stocks of companies that often go up and down, and this is especially important for anyone who is new to small stock trading.

For More Stock Investing Info Visit: http://investorchamp.com

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2014 Investment in Pennies

By Shawna Frost

You don't need a lot of money to start investing in penny shares in 2014 - but they could make you a potential fortune in less than 12 months...

Penny stock is the only stock class with the power to double your investment, virtually overnight. You don't need to pile tens of thousands into big, expensive stocks like Apple or Exxon to make serious money investing. Many investors who have been successfully investing for over 30 years, say they would not touch lumbering blue-chips with a barge pole. As they believe the best, and most rewarding, way to make money investing is with "penny stocks... "

What makes penny stocks different from other "normal" stocks is that they're cheap. Dirt cheap. Shares can go for as little as half a penny to a few pounds. So even small (or first time) investors can afford to play the market. And don't worry if you've never bought a stock before, it's as simple as checking your email (or making a quick phone call). Anyone can do it.

Rarely featured in the press and "off limits" to most investors, because the big fund managers can't trade them...

Better still, these stocks can deliver truly explosive gains. In fact, they're potentially the most profitable stocks on the US and UK market.

With a big "blue chip" stock it can take years for a $50 share to turn into $100. But with a penny stock, a 20 cent share can become 40 cent overnight. After all, the share price only has to go up by 20 cents!

So with penny stocks you could potentially double your money at lightning speed.

Proven to Outperform Bigger Stocks

The little Known Story of a Penny Stock Billionaire...

In 1939 a young trader called John Templeton bought 100 shares of every company trading under $1 per share. Four years later he had multiplied his money many times over - even though some of the companies he invested in went bankrupt. This is the profitability of penny stocks.

John retired a billionaire, and lived out the rest of his days in the sunny, carefree Bahamas. And renowned investment researcher Roger Ibbotson points out that - "[penny stocks] have outperformed large-cap stocks... over the last 80 years." Eighty years.

As you can see, penny shares have trounced blue-chips for well over half a century. But most investors have no idea of the colossal power of penny shares. It's somewhat of an industry secret, one I'm letting you in on today.

This chart is a reminder of why I love small caps so much. They have consistently beaten the UK market since 1955.

So you see, when it comes to share dealing, I believe there's only ONE way to make serious money. I'm not saying that you're guaranteed anything. I'm saying you have a chance - a genuine chance - of making some real money.

So why Isn't Everyone Doing This?

If penny traits are so great, you'd expect everyone to harness their amazing profit building potential and get rich. But that's not the case at all. You see penny stocks are so small; the "big boys" in the City can't trade them.

This is because big investment firms can buy up millions of shares at a time... but if the company they buy into is a penny trait, the share price flies through the roof with a big order.

Penny shares have outperformed blue-chips, every single year, for the past 57 years

This immediately cuts into their potential profits, so penny investments just aren't a sensible way to play the market, when you're a City fat cat. However they're great for the little guy and first time investors.

Why you won't find these tips in the mainstream media

Because the City ignores them, the mainstream media does too. This is why most people don't know about penny stocks, or just don't trust them. Because they don't get the same media attention big blue chip stocks like Pfizer and Barclays do.

But just because penny traits aren't mentioned on the news or some bobble head's TV show, doesn't mean there's anything wrong with them. In fact it's better this way...

If you're willing to invest some spare cash you aren't depending on in penny shares, I really believe you'll be better positioned to profit. Of course, penny shares are riskier than investing big name companies. But with bigger risks comes the chance of much bigger rewards...

Shawna Frost works as a Financial Analyst with some good US Stock Exchange Consultancy companies. She writes about Penny Stock tips,Stock Market Tips and shares her experience regarding the Hot Stock Tips and US Stock Exchange tips with the readers.

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Ways of Selling Gold With Maximum Profit

By Tevin A Jones

There are several methods available if you are in need of a large amount of money. The best choice you can make is to sell pieces of gold and silver that you do not need. The steps are easy and they can bring you the amount of cash you need very fast. If you have pieces that may be damaged or broken, you should consider selling them as they are expensive to fix. Also you may have items that come from a finished relationship and it brings back too much painful memories. The best choice is to let them go and get some extra money in the process. Whatever the reason is, the process of disposing them is very simple.

First of all, you have to gather all the pieces of jewelry that you want to dispose of. Separate them depending on the material they are made from. You have to consider that the metals come into combination with alloy which can affect the amount of money you can receive from your items. You can find the information in the internet regarding the prices that correspond to the amount of pure metal in the item.

The next step in the process, is to establish the amount of each precious metal that you own. You can always consult the internet and make your own estimation or you could go to an expert and after paying a fee, he will give you the proper and exact information regarding the pieces of gold and silver. 

This comes in handy if you have a larger amount that you want to sell.

You have to pick your time in order to successfully make the most of it. The previous year has marked a significant increase in the price of gold. It is considered to be the highest in the last thirty years, so the right moment to sell is now. Stocks cannot be accurately predicted, only guessed and not even experts can establish for sure if the price will go up or down. The indicators show that you can receive $1,100 on an ounce of gold this week.

There are two choices when it comes to selling gold or silver, the conventional way (through a jewelry store) or online. The conventional way can be rather tricky as there are many scammers out there that will decrease the price much lower than the actual value. The other solution, which is the online environment, is much better. In any of the cases you should know the exact estimation of your gold or silver, and also you should know ahead how much you can gain from this transaction. Don't hesitate as your money is at stake. If you think that you can gain a larger amount on your items if your don't sell it to them, then go somewhere else.

Tevin Jones is an Expert Author,Visit the #1 Recommended website Cash for Gold or Sell Gold
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Forex Trading School - How To Find The Best School For You ?

By Simon Aridej

It can be extremely difficult to learn the ropes of forex trading if you try to muddle through on your own. Forex trading is not exactly something an individual can effectively teach his or herself simply because it is complex and real time experience is the only way that anybody could ever be prepared for what the marketplace has to offer! Forex trading school can provide an excellent introduction to the world of forex and is a far better solution for individuals looking to trade currency than self education. Finding a school, though, can be difficult if you do not know what you are looking for. By adhering to the steps below, you will soon find a forex trading school to suit you!

1. Do not take the Internet's word for it - There are just hundreds of them out there, but only one forex trading school for you so it can take time to find it. This is especially true if you choose to believe everything certain schools write on the Internet. A forex trading school may be useless but brand itself innovative and dedicated. Nothing in cyberspace should be taken for gospel and enrolling in the first forex trading school you see could lead to a loss of money. Take everything you read about a forex trading school with a pinch of salt.

2. Only go to an accredited forex trading school - Actual brokers run certain forex trading schools and they are endorsed by numerous bodies because they all value the sanctity of forex trading. However, some forex trading schools will not be endorsed at all so stay away from those.

3. Research the company behind it - It is always worth researching a forex trading school before enrolling to make sure that they are offering whet they say they are, and to make sure that the forex trading school has a good reputation. Reputation is everything in the financial industry so never choose one that has been acknowledged as poor.

4. Assess the teaching methods - Personal preference should play a big part in the forex trading school decision for you. Some people respond well to academic pursuits, which encompass the theory, and some prefer to be practical and want to sit at a desk and try their hand, learning as they go. The choice is yours, but only go for a forex trading school that will help you to learn the best way you can!

5. Assess your own wants and needs - If you do not assess your wants and needs then you cannot find the forex trading school for you. The school you choose should be everything that you want it to be so make sure that you make your own decision without input, based upon what you want and need and you will not go far wrong!

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3 Reasons Why You Should Stick to Your Trading Plan

By Alwin Ng 

 

In the recent week, I have been doing some reflection as I prepare to launch my new online learning hub (Yes, I will be launching an online trading school, so stay tuned:D ) and I have been analysing some trading challenges that are common to traders who are struggling to succeed. As you could have guessed, these are usually related to trading behaviours and habits - also known as Trading Psychology.

I'm sure you realised by now that to become a successful trader, a sheer amount of discipline is required. However, to be very clear, trading success is not just about being discipline, it's about having the discipline to stick to your trading plan irrespective of the outcome.

OK, some of you might find this challenging and I understand that you might have trouble keeping to your plans because of A, B, C and D reasons. While I'm not here to verify if those reasons are valid, I want to remind you that you need to remain focus in doing so. Because if you truly want to succeed, sticking to the plan is extremely crucial for your trading success. To support my point, here are a few reasons why sticking to the plan is important.

1. Validating Your Plan
When you first learn to trade the market, the first thing you need to learn is to stay clam and relax when they are in the market. Let's face it, emotional control is a continuous learning process. So, before you get there, you need a reliable methodology to support your learning. While you should start off with back testing, you will need to validate your plan in a live market condition as well.
For a trading system to be thoroughly tested, (and here's the key) the system needs to capture every set up that meets the rules. This is important so that all boundaries of the system are accounted for. This is important so that you can verify and validate that you trading plan provides you with a solid trading system.
Imagine if you only take the trades that you FEEL right and you THINK is good? And you decide to ignore any trades because you experienced a few losses recently or because a random newsletter gave you a different bias. Do you think you can fully appreciate what your trading plan has to offer? Do you realise, that by not following your plan, you are not able to fully validate your trading plan?
Validating your plan is also important so that you will learn to trust your plan and that leads to an easier and easier trade execution.

2. Accelerate Your Learning
Keeping to your trading plan is also important so that you can improve it. Yes, of course you need to improve your plan. As you continue to trade the market, you are (consciously or unconsciously) learning. Every time you learn something new, you can always use it to improve the returns on your investment and you do that through your trading plan. Above and beyond that, what traders don't realise is that they can actually accelerate your learning if you were to stick to your trading plan.
So my next question to you is this: - How can you accelerate your learning from your plan?
That's a simple but not so straight forward answer. If you were strict to follow to your trading plan irrespective of the outcome, then you will start to learn about yourself and how your plan is interacting with the market. You see, when you keep to your plan irrespective of the outcome, you will be asking questions like:

• Will I be satisfied if I reduced the reward for a higher probable outcome?
• What are the chances of getting similar outcome if I change my entry/exit?
• Is this type of trade suitable for my risk appetite?

Note: You will only know the answers to the questions by following the plan until you have a large enough/decent sample size.
And you will ignore questions like:

• Will the market move higher/lower?
• What's the likely market reaction from Fed announce?

In other words, your focus will be towards making your trading plan better and you will start to learn how to become a better trader as opposed to being a really good market analyst.

3. Detachment from Market
Here's another important lesson that you can take away by keeping to your trading plan. As soon as you start focusing on the plan, you will also learn to detach yourself from the market.
How? Well, I'll try to flip this around see if it makes more sense.
Remember that you have no control over the market and the more you focus on something that you have no control, the more emotional one can get. For example, some traders celebrate because they made lots of money over one trade. This is pretty silly because the fact that they made money over that that is not a representation of the capabilities of that trader. They don't realise that winning or losing one or two trades is merely driven by luck. However, the fact that you overwhelmed by that winning also means that you will likely get very angry or frustrated over a losing trade. Remember that emotions work both ways which includes both winning and losing trades.
So instead of that, putting all your focus on your trading plan will help you redirect your effort and energy at the right place. In fact, the more energy you put on your plan and less on trying to predict the market, the more you are able to detach yourself away from the market. And the more detached your are, the more you can focus on making rational trading decisions.

Conclusion
I can continue with a lot more reasons to why you should stick to your trading plan. However, the 3 reasons mentioned above will be a good starting point as they are enough to get you going.
With that, I do believe every trader should focus on learning to stick to their plans. It is after all, a skill that you can learn.

Thank you for reading and please share any of your comments in the box below.

If you like what you read, do visit us at TradeYourEdge.com

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How to Trade Foreign Exchange With $100

By Keith S. Ng

The world of foreign exchange or forex trading initially seems slightly overwhelming when first introduced. What many people fail to realize with trading currencies is that success is developed with experience, awareness and strong belief in decision-making capabilities.

 Those interested in making breakthrough trades in personal investment don't need thousands of dollars to make impact. The following information will assist anyone with $100 make informed decisions in the currency trading market.

Getting Started Effectively:
The beginning of the trading experience for the currency market should begin with research and practice. One should choose the appropriate broker which fits their desired investment outcomes.

Reviewing various forex brokers exploring all the benefits offered is the best way to become comfortable and maximize investment results. Once broker selection is complete, testing with free trading software from the chosen broker is the method most new traders choose to learn the currency market.

Gain experience with different currencies, charts and market news as much as possible.

The time frame for gaining enough experience is dependent solely upon the individual, but it's recommended that a month's worth of practice will develop a keen mindset for trading.

One of the most important characteristics of learning how to trade $100 dollars effectively in the forex market includes understanding the power of leveraging money. Leverage is the process of trading on the margin and most forex brokers offer this option as a tool for their traders the chance to earn greater returns. The range of marginal trading offered by brokers is expansive from 50:1 to 400:1 margins on pips or small price changes in currency.

The higher the marginal value, the less money is required to place on the applicable trade.
Trading on margin has great rewards for those who understand leverage well; however the amount of risk associated with marginal trading is just as possible to occur.
The positives of trading on margin allow investors to make high percentage gains compared to the initial $100 balance if the fluctuation of price changes is high, yet if inaccurately judged the same value that could have been gained will be lost over a set amount of time.

The best way for investors to trade cautiously on the margin is having a developed risk management strategy established.

To make a $100 investment stretch further, one must become familiar with forex charts as much as possible. There are established types of charts specific for analyzing the changes in currency value so those patterns and behaviors must be understood. Become comfortable with a certain style chart and the associated time frame assigned to the values the currency displays.

Chart values are effective on the independent variable of time, this is why even if one style chart is understood it cannot be automatically predicted the behavior of the currency unless the time frame for that behavior is also accounted for.

Quick Tips to Remember While Trading:
Forex trading with a $100 investment is an exciting way to learn about world markets, but live trading must be done under the calmest of conditions. One must be removed from emotions when making a decision on the currencies they decide to invest in and understand some losses will happen.

Managing risks effectively will ensure that losses can be reduced. One method to effectively manage risks is splitting the amount invested in halves using a portion to put towards the market and the other as recovery funds. One should watch the charts daily but only trade when the chart shows fluctuations to favor the trader. Above all, paying attention to the news, understanding the charts and strengthening personal prediction through experience will lead to an investor's ultimate success.

Keith Ng writes on topics of foreign exchange and stock trading strategies he learned from a successful forex trading course in Singapore. To learn more about trading with the best, please see www.onlinegurutrader.com

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The Top 3 Myths About Forex Scalping

By Steve Rising

There are a host of common, erroneous ideas about forex scalping that are available to the trader who simply has not done the proper research. Most of these ideas are perpetuated by marketers who attempt to steer a trader to a trading process that may not suit his personality and, more importantly, his risk tolerance, and that may also draw temptations of large profits with minimal capital outlay.

Emotions often override sound judgment when a trader is looking for a way to generate large profits instantly. When reviewing various forex trading processes, a trader must overcome his preconceived notions and approach the selection process with a spirit of detachment.

Here are three of the most common myths about trading the forex with a scalping technique:

1. Forex scalping means that you are only able to take a small profit.

Not true. Market conditions are what determines the size of the profit one can take. The solid forex scalper understands this. A forex scalper can take a 100-pip profit when trading a fundamental announcement or a 10-pip profit when trading a currency pair with small average-size moves.
A scalper is simply a trader who has a predetermined profit target based on the anticipated trading conditions. A scalp trade has zero limitations regarding profit taking. The market conditions create the limitations.

2. Forex scalping is riskier than trend following.

First the trader needs to understand that the amount of available trading capital determines the amount of risk you can take. The smaller the trading account, the less risk one can take.
The forex trader with limited capital needs to trade with a very tight stop.
When comparing scalping to trend following, trend following requires the trader to trade with a very large stop; scalping techniques allow one to trade with a very small stop. Trading with a tight stop means the trader is trading with less risk. You simply cannot trade a trend following technique with a tight stop.

3. Forex scalping requires you to be glued to your computer for hours at a time.

If you are using a solid scalping process, you should be in a trade for less than 30 minutes in most cases. Scalping is actually less time intensive. Trend following requires the trader to be in a trade for extended periods of time.

Because the forex is the world's most volatile market, the trend follower is always checking on his trade. The trend follower never wants to be far away from access to the market. A common practice for a trend follower is to get up in the middle of the night to check on his trade.

The scalp trader can achieve the exact same profit in a fraction of the time simply by trading multiple lots. Get in, take profit, get out. Turn off your computer and go enjoy yourself.

As is often the case, myths and misconceptions are created from erroneous ideas.

Typically when a trader is tempted by the idea of fast and easy profits, these erroneous ideas become the driving force.

Forex trading is an excellent way to generate additional income. Forex trading is not a unique endeavor that does not require proper training to realize consistent positive results. The bottom line is, getting properly trained is mandatory if one wants to realize success.

To learn more visit www.theforextradinginstitute.com.

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Can You Trust Stock Brokers?

By Matthew I Arthur

'Can you trust stock brokers?' Talk about a loaded question. Anytime you're trying to evaluate the trustworthiness of a whole profession or a wide class of people, you might run into the very common problem of stereotyping. One bad apple (or a few dozen) doesn't necessarily have to spoil all apples. Still, many people do think in terms of generalities and this is a reality we have to live with. Here are some important factors to consider when trying to decide whether you can trust stock brokers or not.

Which stock broker?

In deciding whether you can trust stock brokers or not, you have to remember that there are actually many different types of stock brokers. Many people lump all brokers in one class and judge this class. This is not fair considering the different types of stock brokers out there. Here are just a few of the most common classes of stock brokers.

Trading broker

This stock broker just executes your trades for you. This broker doesn't make any recommendations regarding which stock to buy or sell.

Sales broker

This stockbroker actively 'pitches' clients on stocks to buy. By law, such brokers are required to disclose if their company has a vested interest in the stocks they are pushing.

Analyst

While not technically a stockbroker, analysts are very influential opinion makers in the world of stocks. They study particular stocks or industries and recommend stock buys or sales. Like sales brokers, they are required by law to disclose whether the company they work or they themselves have an interest in the stocks they are recommending.

As you can tell from the descriptions above, it would not be fair to say trading brokers are 'untrustworthy' because they merely execute trades on behalf of their clients. It would be fair to ask, however, whether you can trust an analyst or a sales broker. While most of these brokers are on the up and up, there are quite a number of shady operators who give the whole industry a bad name. Many of the more aggressive shady operators use boiler room operations and pressure sales tactics to victimize investors. What follows is a quick guide on how you can protect yourself from shady stock brokers and stock sales operators.

Protecting yourself from shady operators: a basic guide

This guide is not meant to be an exhaustive guide on how to avoid being victimized by shady stock brokers. Instead, this guide lays the basic groundwork you should follow to minimize your chances of being ripped off. As always, if something is too good to be true, it usually is.

how to find brokerage companies to trust with your money

Trust only legitimate companies

Companies spend a lot of time and money building a solid corporate brand. A solid brand is the result of many satisfied customers and a very minimal level of customer complaints. Not all businesses and firms in the financial industry can lay claim to a solid brand. If you get solicited by a stockbroker, either over the phone or through an email or physical mail, your eyes should quickly search the message for the logo of a company you can recognize. If you don't recognize the company, research it quickly online. If it is a solid company with a solid reputation, you should be able to quickly dig up many mentions of the company as well as possible awards or big projects. However, you shouldn't limit yourself to what search engine results say about the company of the broker that contacted you. Thanks to search engine optimization (SEO), bad reviews, bad reports, and other damaging information regarding companies are fairly easy to 'push down' in search engine results.

If you want maximum peace of mind, visit the SEC's website and do a search on the name of the firm of the broker that contacted you. Public complaints, enforcement lawsuits, and other enforcement actions by the SEC are put on the public record. It should be fairly easy to see if the firm of the broker who is soliciting you has had lawsuits filed against it or if the company or its members faced fines or other serious penalties.

Ask to see the research

Assuming that you're dealing with a legitimate company, don't let this fact lull you into thinking that you should do business with the broker. You need to be vigilant. Just because you are dealing with a company with a good reputation doesn't necessarily mean you won't get ripped off. There is always a first time for everything. Ask the broker for research materials and other objective information you can research which backs up the broker's conclusion that the stock he or she is recommending is due for a 'breakthrough.' Pay attention to earnings, earnings growth, industry ranking, market share, and industry growth so you can make a truly informed decision. Don't just take the broker's word for it.

Take what you read online with a grain of salt

Your next step is to do research on the individual company being recommended to you. Take a look at what other people have to say about the company. At this stage, you have to remember that there is no such thing as 100% favorabilitiy. There will always be negative stuff online because there are haters all over the Internet. In fact, many negative blog posts and articles are actually written by competitors of the company. This is not the problem. The problem is if you see a constant negative pattern. Where there is smoke there is fire, after all. If you see such a pattern regarding the company you're researching, stay out of the stock. When in doubt, stay out.

Be on your guard when researching stock forums

Another resource you should check are stock forums. You'd be surprised at the nuggets you can unearth using stock forums when researching your stock picks. With that said, keep in mind that there are many people engaged in 'pump and dump' scams on stock forums. Be on your guard. Always look for secondary information besides what the promoter or poster is saying regarding a certain stock.

Can you trust stock brokers? The answer, of course, is it depends. It depends on the type of stockbroker, and it depends on the nature of the investment opportunity the broker is pushing. By following the tips listed above, you can increase your chances of avoiding victimization by boiler room operations and pump and dump schemes.

For More Investing Tips Visit: http://investorchamp.com

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How Much Money Do I Need to Begin Trading Forex?

By Johnny Mitch

Forex trading has become very popular and one of the main reasons is that it can easily be accessed by almost anybody due to the very low entry barriers, compared to other forms of investments.

Whilst still a beginner, instead of considering what amount you need to invest, make sure you know at least the basics of trading. This can be easily done by opening a demo account where you can practice with virtual money and do trades as if in a real life environment. Although you will learn the basics keep in mind that live trading and trading within a virtual environment is a whole different experience. The reason is that, as real money is not involved your psychology is very different and the way you think and respond to your feelings can have a great impact on the outcome of your trades.

So practice first a great deal and begin to form your private trading strategy and day by day complete more and more successful trades. It's also essential to learn the fundamentals of forex techniques to analyze fluctuations in currency prices by utilizing technical and fundamental analysis within a your demo account. It takes some time to fully comprehend the use of such tools and use them to your advantage. Only when you believe you are ready I would recommend to open a micro account. Following that, should you begin to generate profits on regular basis go ahead in opening a mini account.

Even though you can begin trading with as low as one dollar the most common minimum entry amounts are from one hundred to ten thousand dollars. There is no magic number to enter the Forex market but I always recommend beginning with a small deposit and one that does not entail very high risk in case of temporary losses. Gradually as you gain more experience and complete more and more successful trades you can increase the numbers going for larger profits and risks.

Many traders get carried away and believe they will invest a small amount and turn to be millionaires in no time but let me assure you that this is a pure misconception. Should you decide to misuse the high leverage advantage within the currency exchange you are more likely to be doomed right from the start. Newbies must realize that experts often generate less than fifteen percent per year. Investors with small deposits usually presume they are able to earn double, triple or quadruple their money within a year's trading.

You need to remember that you should avoid trading more than two to five percent of your total deposited amount in one go. Controlling your losses is what will make you a successful trader and not winning the most trades. This is the most common mistake that novice traders do and they end up losing too much too soon and quickly abandon the Forex market extremely disappointed.

Therefore to recap, first you need to acquire the basic knowledge through studying, and then make sure you practice till you gain a certain confidence of your training methods and finally gradually enter the market with a conservative investment which you will systematically build up once acquiring more experience and steadily increase your profits.

Who else wants the Secrets, Most Effective Money Making Strategies and Awesome Tips to choosing the Best Forex Robots and start making some Serious Money? Get our EXCLUSIVE INTERVIEWS with THE TOP EXPERTS for VERY LIMITED TIME FOR FREE. CLICK HERE: http://www.tiny.cc/Experts-Interviews Thank you. Johnny.

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