How To Manage Your Risk When Trading Foreign Exchange

Any professional trader will tell you that spotting profitable trade setups is only one part of the trading equation. Managing the trade properly and minimizing risk while maximizing gains is…

Equally as important. Due to the importance of managing trades and setting profit targets, I decided to give you a sneak peak at how I manage my trades in order to achieve consistent profits in the Forex market.

Before I begin, let me state that the topic of managing trades and setting profit targets is a broad subject that can be expounded upon almost indefinitely. While today’s discussion doesn’t cover all of the details in regards to trade management and setting profit targets, it will serve as a general overview of the subject and provide you with valuable insight as to what goes through my mind when managing open trade positions.

STOP LOSS PLACEMENT

Some scalpers and short-term traders don’t place stop losses, because they generally watch every trade from beginning to end and are out of a trade shortly after it is entered. However, most professional traders, myself included, prefer to adopt the set it and forget it trading methodology, this way we are not stuck staring at our charts all day long. Thus, stop losses play an integral role in my trade management.

When trading Foreign exchange, it’s important to always consider risk before reward. I also consider it important to determine stop loss placement before I determine the position size I want to open for a particular trade. The following theory covers my general thoughts on stop loss placement:

• I always want to place my stop losses at a logical place. This means stop losses should be placed at a level that makes sense in the context of the overall structure of the market and at a level that will tell me when a trade signal loses validity.

• I always begin with the premise that I want the market to take out my trade. Although I may sometimes manually exit a trade when I notice market conditions turning against me, my first option is to let my stop losses or profit targets determine the exit of the trade without my interference. I only manually exit a trade if there is convincing price action that is acting against my position. This type of manual exit is purely logic-based, as all trading decisions should be.

As a recap, I use two logical methods for exiting a trade:

1) I let a currency pair hit a predetermined stop loss that I place when entering a trade.

2) I manually exit a trade due to the formation of price action that provides a clear signal against my position.

The goal of every professional trader when determining the placement of a stop loss is to place it at a level that gives a trade a reasonable amount of room to breathe, but not too much room that may lead to a sizable loss. Basically, I want to place my stops at the closest logical level that will invalidate my trade signal, whether it is price action or another technical indicator. So, I never want to place my stops too far away, but I don’t want it to be too close to my entry point either. I want to give the market enough breathing room to bounce off of its natural retracements, but I also want my stop losses to be close enough to exit a trade before too much loss of capital occurs.

Unfortunately, many traders don’t put as much thought into their stop placements as I do, and this usually ends up in either getting stopped out early on a number of trades that would have been profitable or risking too much capital on any given trade. Many traders place tight stops because they want to trade a large position size. However, this results in trading account suicide, because their trades get stopped out before they even get a chance to begin. As you can see, there is a fine line that often needs to be walked when deciding on where to place stop losses, and I always consider stop losses as an integral facet of my trade management strategy.

Finding Trends In Forex to Be a Better Trader

A market trend is a direction in which a sector of the market moves over a period of time. Those who study finances speak of three types of trends — secular, primary and secondary — depending on the length of the time frames under consideration.

As with all market sectors, the most effective strategy is to “trade with the trend.” The trend is only your friend so long as it lasts. Longer time frames tend to dominate the shorter ones in analyses of long-term investments, but shorter time frames do tend to gain in importance when it comes to determining the day-to-day performance of an asset. You can use forex charts such as these to perform your studies.

Using Moving Averages

Simple- and exponential moving averages are two very valuable tools that you can use to determine trends in the forex market. To calculate the simple, or arithmetical, moving average, you divide the sum of the closing prices of a security for several time periods by the number of those periods. The exponential, or exponentially weighted, moving average is similar but gives more weight to the most recent data available. It is calculated recursively in a rather complex formula, which you can find by clicking here.

The two types of averages are useful for different purposes: The EMA reacts more quickly to recent changes, and the most popular short-term averages — 12- and 26- day EMAs — are used to create the moving average convergence divergence (MACD — used to spot changes in the strength, direction, duration and momentum of trends in the prices of a stock) and the percentage price oscillator (PPO — a measurement of the difference between two moving averages, given as a percentage of the larger one). The EMAs that are most widely used to indicate long-term trends are the 50- and 200-day ones.

Now that we have covered the two types of average, let us look more closely at how to use them together to figure out the direction in which the forex market is moving. This form of tracking is, of course, best done on a chart.

If both averages show a tendency to simultaneously hit the bottom of the chart — a phenomenon known as a “double bottom” — then you can usually be sure of support in that area. You can also gage which direction the trend is moving by setting up a long-term SEA and a short-term EMA. Counting the number of “waves” or the “pivots” that each wave displays, you can make an educated guess as to whether a trade you intend to make will be with or against the trend. There are several theories regarding this point, but one — known as the “Elliot wave theory” — states that an impulse wave will consist of five swings while a corrective wave will consist of three. (The terms “impulse wave” and “corrective wave” both refer to the ways in the market moves, but they are used when the waves are in the direction of and contrary to the trend respectively.)

When you set the pivot count against the moving average diagnosis and subsequently make a “candle analysis pattern,” you can get a good idea of your chances of making a successful trade.
“Trend” in the forex market is retrospective.

Other experts may not agree with this, but there are those who think that the word “trend” is overused when talking about the forex market. According to them, you can only speak of “trend” here in a retrospective sense, that is, after it is too late to make the trend. What distinguishes a good forex trader from a bad one is that the former knows when to enter the market and get things right more often than not.

The sooner you get into the trade before the end of the trend occurs, the lower your risk of losing money and the higher your reward will be. The secret here is to base your strategy on high probability time cycles — these will tell you when it is and is not a good idea to trade.

Car Rental Costs: How To Keep Them Low

There are many reasons and occasions when it is logical for people do a one way car rental. Many people will tell you that one way car rental is very expensive. That it’s not possible to get one way car rental discount. It is true that some car rental companies feel that one way car rental is risky to their business as often the car will leave the state, but not all car rental companies operate this way. Instead of phoning around to car rental agencies, look for one way car rental discount deals on the internet.

The internet is absolutely the best resource and you can do comparative shopping easily. The internet is especially valuable when you are looking for discount car rental Europe. You save a huge amount of time and effort to scout out car rental companies in Europe online. You can also check the latest exchange rates, and make sure that this is not a deciding factor in how expensive a rental may end up.

When you are planning a trip to Europe for business or vacation, but you also want one way car rental discount, this is how to get it. You might want to drive to a specific destination, but fly back home. Then it’s absolutely convenient, once you have found the perfect one way car rental discount deal, to book it online.

Make Sure Of All Facts About One Way Car Rental Discount

Looking online is the fastest way to make sure what policies the different rental car companies have regarding their rental packages and whether they offer one way car rental discount. Once you have found the right one way car rental discount deal that suits you best, there are other factors to consider. Make sure to read the rental agreement through thoroughly and if it is not stated clearly, make sure of any penalties.

Also, make sure whether the one way car rental discount price includes or excludes the fee if there will be a second driver in the car. This is important as some car rental companies charge an additional fee for a second driver. Find out what the drop off charges are as well as other fees such as airport fees, insurance costs for different packages and taxes.

If it’s a company in another country, please check the current exchange rate. Renting a car and sending money at the wrong time can cost more. Make use of sites which offer latest currency rates, and send the money when the rate is in your favor.

It is your responsibility to make sure that everything is above board. If you neglect any details your one way car rental discount deal can turn into a nasty shock and become a very expensive deal. The benefit of a one way car rental discount deal is that many companies see this as a benefit to their company. It is better to have a rental car bring in a one-way deal fee than sit idly.

Having a Plan To Gain Financial Freedom

Financial Freedom can mean slightly different things to different people. Some interpret this to mean the ability to be free from financial worries, while others believe that to be financially free means not having to work nine to five years working to pay the bills. Another popular concept of financial freedom is the ability to buy extravagant items as luxury cars or exotic vacations.

The exact definition of financial freedom can vary, but in the broadest sense, is simply an improvement in their financial situation.

For financial freedom, there are some specific action steps to be taken.

1. Specific set time-bound targets
2. Developing a budget
3. Rid of debt
4. Savings and investments
5. Indemnification

Specific set time-bound targets

Goal setting is important to achieve financial freedom because it outlines the things you want to save. Having a little ‘a written list of things I want to make them easier to reach. Why are the front line and could therefore be set aside money to give them life. Setting targets is a motivating force and a way to track performance, so you get two big advantages of performance.

Developing a budget

a budget is a simple plan of how to spend the income and recorded. There must be a column for the money and the categories of expenses and their debt to take account of the money. The budgets must be realistic to work. Many budgets not because they are too ambitious or that are made and never consulted. You must make sure that you are committed to their budgets to see the results.

Rid of debt

it ‘hard to reach complete financial freedom, if they are related to the payment of debt. To pay a debt of priority and is developing a plan to make the lump sum to reduce the amount outstanding.

Savings and investments

Construction of a personal budget to help whip your finances into shape, so you may find that you currently have excess money to save and invest. Start building an emergency fund and to allocate all funds above this amount to invest to improve performance. Does not increase the balance of your savings account, if you want to combat the continuing threat of inflation. You should learn as much as possible about the different investment products such as stock index trackers.

Indemnification

to provide insurance for the unexpected. Nobody thinks of his house burn, fall ill or if they have a history of illness in his family, but these things can happen. If you are in a position I never thought it would take over security for you and your family for all the hard work had not been in vain.

You can achieve financial freedom, but we must make a conscious effort. Just not the case, you must have a plan and then take steps to realize their dreams.

3 Common Mistakes To Avoid On Your Website Homepage

Writing a homepage is one of the first and most important steps in building a website. When writing content for your webpage, you need to keep in mind that you are writing the very first page that your visitors will see. In many ways, your homepage is the “make or break” part of your site. It is the page that can either entice your visitor to explore the rest of your website or it can simply encourage him to click out. Whether you are trying to write a homepage for the first time you are trying to revise your existing content, make sure you avoid these common homepage writing mistakes.

Not doing research about your target audience. When it comes to web writing in general, it’s important to have a clear idea about the type of audience you are writing for. This can be compared to making a speech in public. For your speech to become a success, it needs to be in line with your listeners’ interest and needs. For instance, profound anecdotes about family and parenting might appeal to a group of mothers but not to a group of teenagers. The same concept applies to writing your homepage. An effective homepage immediately grabs the interest of the reader. So before you write, make sure you do some research about your potential visitors.

Putting everything on your homepage. Now that you know how much your homepage can impact the success of your website, it’s natural to feel some pressure when writing for this page. You might even try to squeeze all your selling points into your homepage. This is a common mistake that you should avoid. Your homepage is not the place for you to discuss the history of your business or rave about how neat your product or service is. Save these details for the “About” and “Customer Testimonials” pages. Your goal in writing your homepage is to make a concise but powerful sell. Let your visitors know right away that your website has what they are looking for and they will automatically explore your other pages.

Not updating your homepage. A static homepage is not exactly a major mistake but if you want to stand out from the rest of the competition then you might want to keep your homepage updated. This doesn’t mean that you should rewrite your homepage content every week. Instead, regularly add details to keep your homepage interesting. For instance, you can incorporate a “Tip of the Week”. Or if you have a new press release, you can put a teaser in the homepage that leads to the appropriate link of the press release page. Not only will you keep your regular visitors interested but you can also boost your ranking since search engines love fresh and updated content.

Which Blog Platform to use WordPress or Community Server

A question I get asked on a regular basis from friends, co-workers and readers of my various blogs and websites is what blogging platform should they use, in general I point them in the direction of either WordPress or Community Server and the answer I give them depends very much on what they want to do and their slant in the operating system world.

Below is a brief overview of both WordPress and Community Server with a list of each platforms best features and why you would want to chose one of the other.

WordPress

Many people laugh when I mention a blogging platform other than WordPress, and it is this popularity and hard-core following that makes it arguably the best blogging engine. WordPress has been around for years and as you could imagine is very well developed, with literally hundreds if not thousands of free plug-ins, modules, and themes.

The out of the box theme does look a little dated but what hides within is a highly configurable and flexible.

The Top Features or reasons for choosing WordPress:

· Most popular blogging engine in the world (Excluding provided services such as yahoo, MySpace, Blogger )

· Because of the popularity of WordPress thousands of plug-ins, modules and themes exist that are updated when a new version of WordPress is released

· Lots of users means lots of documentation and support, there are thousands of people that are happy to help you to get your blog up and running or provide advice when something goes wrong and needs to be fixed.

· WordPress is free and runs on with PHP and MySQL which are also free.

· Great for users who are familiar with Linux and PHP

Negatives:

· Runs on PHP which regularly has security issues, which is not an issue if you regularly update your PHP install

· WordPress is only a blogging platform (no forums, photo gallery)

· Harder to be configured to act as a traditional website with articles.

Community Server

Community Server is more than just a blogging platform but in fact a Community Platform with Blogging, forums, and photo galleries. Being a community platform it is designed to host multiple blogs.

Compared to WordPress Community server is a lot younger and does not have anywhere near as many plug-ins, modules and themes, but from my experienced of both Community Server and WordPress community server is easier to theme with its Chameleon Teaming engine.

Top features or reasons for choosing Community Server:

· Runs on IIS, asp dot net and MS SQL so If you’re a Windows person this might be a good reason to choose Community Server

· Community Server is quickly being adopted by big enterprise for their companies internal and external blogging platform, some of the companies that have adopted Community Server include, Microsoft, Intel, Readers Digest, National Geographic, MSNBC Blogs, Mazda, Honda (Internal), Electronic Arts, Visa, MySpace (for their community forums)

· Community Server is more than a Blogging platform, but a community platform, with blogging, forum, and picture gallery options.

· Free edition available for personal use named “Personal Edition”

· Very easy to use and administer

· Community Server was developed with Search Engine Optimization in mind, which means its easier to get your articles higher in Google and other search engines.

· Easy to turn into a traditional website

Negatives:

· The biggest disadvantage with Community Server is the licensing aspect/cost of the technologies it runs on, Windows Server, IIS, MSSQL, but many hosting companies such as GoDaddy offer Community Server with no additional cost.

· Younger product with less plug-ins, modules, and support than WordPress.

I would recommend Community Server if you are a Windows, or Microsoft Technology person with skills in Asp, IIS, MSSQL. I you require more than just a blog, for instance Photo Gallery, and or forums, with its shared, account/membership database. If you are a Linux, PHP, MySQL person and want a very stable well established platform then go for WordPress.

As I have said the best platform depends on what you require and your personal experience with various technologies. Personally I am a Microsoft person so the majority of websites and blogs I develop are with Community Server, yet have developed some sites and blogs with WordPress when there is a feature that is missing in Community Server. I love the fact I have a forums and photo gallery integrated into Community Server, it gives my blogs and websites and additional dimension and find blogs, forums and photo galleries complement each other, allowing a richer website and Community.

I have mentioned about Windows, IIS, ASP, Linux, MySQL, MSSQL knowledge, if you are a person that does not have knowledge don’t be put off either WordPress or Community Server, as there are many website hosting companies that will automate your WordPress or Community Server install, and you will be able to develop a very professional looking blog without this knowledge. This knowledge comes handy for someone like myself who wants to tinker with and perform complex customizations.

Web Services Aimed at the Financial Community

After three years of development, Web services are becoming established as enterprise and extranet middleware, enabling inter-business transactions and information flow by means of open and agreed message standards. Community collaboration can now be achieved without the need for great technical co-operation between competing firms, delivering savings for those that participate.

But overall, Web services and the adoption of the interfaces needed to deliver quantifiable benefits are still at an early stage. Many companies are still looking for bite-size steps that can be taken in the near term that will deliver the measurable benefits required to build a credible business case.

Meeting customer expectations with legacy systems

For many, one of the key areas in which Web services are providing value is in meeting growing customer demand for access to expertise or information via the telephone or Web. Much of the information these customers need is sitting on disparate legacy systems that were never designed to be accessed by customers and have no user-friendly interface. Building ‘point solutions’ that solve each customer requirement individually is expensive and time consuming. By using a Web services-based approach and providing interfaces to legacy systems, designers can build a library of services that can be used in numerous customer-facing applications.

In the retail finance industry, this information can be delivered via a help desk whose agents have access via a portal to what can be literally hundreds of legacy systems. Furthermore, data can also be delivered directly to customers through self-service Web applications that hide the complexity of the legacy systems behind them. This approach to both legacy and new applications is called a service-oriented architecture, as it enables applications to be built into new services relatively quickly without any modifications being made to the original functionality of the application.

Identity checking

Another area of customer service where Web services can help is with identity checking. The revision and tightening of the rules to prevent money laundering have brought with them a major headache for the retail finance industry. The regulations have made opening new accounts something of an obstacle course for customers, who often blame the bank for making this process so difficult. While the reaction of the high-street banks to these regulations has so far been a fairly uniform set of rules for the customer to present certain key documents, there is an obvious opportunity for any bank that substantially improves the experience for their customers. There are clear benefits to be gained from a Web service that can check an individual’s identity by reference to a range of data sources, such as electoral role and electricity supply.

Aggregation and netting

Web services can also help in the area of aggregation and netting – giving the ability to pull together assets and liabilities across lines of business. Previously, solutions would be created that focus on specific product lines, so that customers would receive multiple statements or reports from different parts of the organization. The growing prevalence of Web services capability now allows interfaces to be built for both new and legacy projects. This is leading to the creation of applications and databases that provide a platform built for rapid cross business aggregation. This will enable retail banks to provide customers with a consolidated view of all their dealings with the organization, spanning multiple product lines. Similarly in the wholesale finance industry, there is the potential for new applications that can look across instruments and spot arbitrage or new derivative opportunities.