FOREX 101: Make Money with Currency Trading

FOREX 101: Make Money with Currency Trading

For those unfamiliar with the term, FOREX (FOReign EXchange market), refers to an international exchange market where currencies are bought and sold. The Foreign Exchange Market that we see today began in the 1970's, when free exchange rates and floating currencies were introduced. In such an environment only participants in the market determine the price of one currency against another, based upon supply and demand for that currency.
FOREX is a somewhat Post Free Classifieds market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.
Another somewhat Post Free Classifieds characteristic of the FOREX money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.
How FOREX Works
Transactions in foreign currencies are not centralized on an exchange, unlike say the NYSE, and thus take place all over the world via telecommunications. Trade is open 24 hours a day from Sunday afternoon until Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday). In almost every time zone around the world, there are dealers who will quote all major currencies. After deciding what currency the investor would like to purchase, he or she does so via one of these dealers (some of which can be found online). It is quite common practice for investors to speculate on currency prices by getting a credit line (which are available to those with capital as small as $500), and vastly increase their potential gains and losses. This is called marginal trading.
Marginal Trading
Marginal trading is simply the term used for trading with borrowed capital. It is appealing because of the fact that in FOREX investments can be made without a real money supply. This allows investors to invest much more money with fewer money transfer costs, and open bigger positions with a much smaller amount of actual capital. Thus, one can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital. Marginal trading in an exchange market is quantified in lots. The term "lot" refers to approximately $100,000, an amount which can be obtained by putting up as little as 0.5% or $500.
EXAMPLE: You believe that signals in the market are indicating that the British Pound will go up against the US Dollar. You open 1 lot for buying the Pound with a 1% margin at the price of 1.49889 and wait for the exchange rate to climb. At some point in the future, your predictions come true and you decide to sell. You close the position at 1.5050 and earn 61 pips or about $405. Thus, on an initial capital investment of $1,000, you have made over 40% in profits. (Just as an example of how exchange rates change in the course of a day, an average daily change of the Euro (in Dollars) is about 70 to 100 pips.)
When you decide to close a position, the deposit sum that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.
Investment Strategies: Technical Analysis and Fundamental Analysis
The two fundamental strategies in investing in FOREX are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. This technique stems from the assumption that all information about the market and a particular currency's future fluctuations is found in the price chain. That is to say, that all factors which have an effect on the price have already been considered by the market and are thus reflected in the price. Essentially then, what this type of investor does is base his/her investments upon three fundamental suppositions. These are: that the movement of the market considers all factors, that the movement of prices is purposeful and directly tied to these events, and that history repeats itself. Someone utilizing technical analysis looks at the highest and lowest prices of a currency, the prices of opening and closing, and the volume of transactions. This investor does not try to outsmart the market, or even predict major long term trends, but simply looks at what has happened to that currency in the recent past, and predicts that the small fluctuations will generally continue just as they have before.
A Fundamental Analysis is one which analyzes the current situations in the country of the currency, including such things as its economy, its political situation, and other related rumors. By the numbers, a country's economy depends on a number of quantifiable measurements such as its Central Bank's interest rate, the national unemployment level, tax policy and the rate of inflation. An investor can also anticipate that less quantifiable occurrences, such as political unrest or transition will also have an effect on the market. Before basing all predictions on the factors alone, however, it is important to remember that investors must also keep in mind the expectations and anticipations of market participants. For just as in any stock market, the value of a currency is also based in large part on perceptions of and anticipations about that currency, not solely on its reality.
Make Money with Currency Trading on FOREX
FOREX investing is one of the most potentially rewarding types of investments available. While certainly the risk is great, the ability to conduct marginal trading on FOREX means that potential profits are enormous relative to initial capital investments. Another benefit of FOREX is that its size prevents almost all attempts by others to influence the market for their own gain. So that when investing in foreign currency markets one can feel quite confident that the investment he or she is making has the same opportunity for profit as other investors throughout the world. While investing in FOREX short term requires a certain degree of diligence, investors who utilize a technical analysis can feel relatively confident that their own ability to read the daily fluctuations of the currency market are sufficiently adequate to give them the knowledge necessary to make informed investments.
Rich McIver is a contributing writer for The Forex Blog: Currency Trading News ( http://www.forexblog.org ).

Online Forex

Online Forex

Q1: When you consider that the foreign exchange market has become the world's largest financial market, with over $1.5 trillion USD traded daily, where does it go from here?
A1:The FX market is Post Free Classifieds, in the UK there is no central exchange, we trade via the inter bank market. With more and more private individuals taking up margin trading and new forex brokers setting up, I can only see the market grow in the near future.
Q2: Other than great liquidity, what are the principal benefits attached to the forex market?
A2: There is less to consider when trading the forex markets, there are only a number of variables that affect the pricing.
Main advantages include
Forex Market allows 24 hour trading
Greater leverage - with most brokers offering 100 ? 1,
Less starting capital required,
More Liquidity - day trading has to have enough volume to make it worth our while. The currency market is more liquid than all the world stock markets put together. Currencies are always in action,
Free trading systems
Better for shorting - There are artificial controls built into the market to prevent it from going down too fast. The reason is that we live in a biased world that likes to see things go up instead of down. One of these artificial contraptions is the "uptick rule," which comes into play when shorting stocks, making it more difficult to sell a stock short than to buy it. This is unheard of in the currency market. Selling currencies short while day trading is just as easy as buying them.
Ideal for Short Term Traders -
Q3: Limited market access, liquidity issues-after market hours, commission fees, capital requirements and short selling/stop restrictions are just some of the issues investors face when considering other markets. Given that the forex market removes many of these traditional barriers and therefore does not restrict the forex traders' ability to make a trade at the right time, are we likely to see an increase in trading volumes this year?
A3: With all these advantages, traders are finding it hard not to trade currencies, online trading volumes across all products is increasing at a substantial rate, however FX trading, predominantly amongst retail investors is becoming very popular.
Q4: There is stiff competition amongst online forex service providers for retail forex traders with some claiming to offer the same degree of technical analysis enjoyed by the world's largest banks and institutional traders. Is this possible?
A4: Technical Analysis has come a long way, more and more forex provides now have partnerships with firms who provide analysis. However the banks still have an advantage, the markets are still not under perfectly competitive economic model. The banks will always have access to information that is not readily available, ISX FX currently sources its information from a number of banks to fill this gap.
Q5: Do you subscribe to the theory that forex is less volatile than stocks because the market is much deeper?
A5: As a bet on the direction of a national economy, no currency has ever dropped 25 percent in a day, or imploded as rapidly and completely as an Enron or a Parmalat. In the wake of those scandals, many companies are meting out information more cautiously, making it harder to get the real "scoop" on stocks one problem of trading with too-high leverage is that one piece of surprise news can wipe out one's capital. If you treat forex trading like a business, including proper money management, you have a better chance of success."
Q6: U.S. interest rates-decade lows; global trade wars and terrorism fears have dominated the headlines recently. What impact has this had on retail volumes?
A6: The above factors have all led to a decline in the dollar. This coupled with tighter regulation of brokers has given investors more confidence in brokers. Also the stock market crash has driven individuals to look at the profit opportunities offered by forex.
Q7: Stateside the Commodity Futures Trading Commission (CFTC) has brought 58 actions against firms, since its new powers were awarded in 2000. Given that certain brokers continue to abuse the system, with investor money sometimes not being traded in the markets promised. What can investors do protect themselves?
A7: The retail forex market is in essence betting, as with any bookmaker there is always a risk that you will not get your winnings, or the odds will be highly stacked against you. With tighter regulation and increased competition, this risk of default has largely disappeared. The risk of price manipulation still exists and this will never really go away. Investors need to ensure that they have an independent price source and trade with a broker who offers true one click dealing.
Most brokers work on the basis of the law of large numbers, acting like the bucket shops of 50 years ago, they do not hedge any positions and are directly competing against there clients. This will always lead to price manipulation and further actions by authorities will inevitably be taken.
Q8: What is this best way for "currency rookies" to get involved in the market?
A8: Like with any new form of trading you need to know what you are doing, especially as there is margin involved. Take all the time you need to learn this new trading skill well -- practice everything you learn with a demo account before you consider going 'live' with your own money. Investors should read books, attend seminars and paper trade until they are comfortable with there strategy.
About The Author
Rafik Patel C.E.O. ISX FX LIMITED.
www.isxfx.com
rafik@isxfx.com

Traffic Secrets - Secrets of the Guaranteed Traffic Companies Exposed

Traffic Secrets - Secrets of the Guaranteed Traffic Companies Exposed

Our Story
A few years ago, we were struggling to drive traffic to one of our websites. We were immediately overwhelmed with the amount of knowledge and skill it took to successfully drive traffic to our site. We had assumed that if we created a site that was worth seeing, it would be seen. We could not have been more wrong.
We ran into a number of companies who offered to take over this daunting task for us. We decided to try out a number of them to see how our competition stacks up.
They offered many packages of visitors. I remember my first purchase. I bought 5,000 targeted hits from them for $10. My product cost $15 at the time, so I figured at least 1 person out of 10,000 would purchase. The days went by, and my counter went crazy.
The Results
After our contract expired, all my hits had been delivered as expected. I did not have one sale!!
I Should Have Learned My Lesson!
Thinking this had to be a fluke.. I switched to another company, and bought the same package.
Again, I GOT NO SALES!!
I couldn't figure out what was going on. I was confident my ad's were written well. The site was well designed and planned, and my product was in demand...
I Started To Investigate
Frustrated, I started to investigate exactly where these visitors were coming from. I discovered, that I had fallen victim to one of the most common scams on the internet. I couldn't believe my eyes when I first discovered the secrets these company's use to drive traffic to the clients sites.
I checked the script I had installed that was used to check detailed stats on all of our traffic. All 10,000 of our hits came in 2 days, and all 10,000 of them were logged in for less than 3 seconds. Not a single one of them navigated past our main page. My stats script will also tell me where my traffic was referred from, and what keywords they used. All of these hits had the same referral, and didn't use keywords. This last fact isn't important, because any company, good or bad, will redirect their traffic sources through their domain. This is just to keep competitors from stealing their sources (good or bad).
I believe that these company's are going to pay for their greed and dishonesty sometime in the near future.
In the next few pages, we are going to reveal exactly how these greedy companies scam you. This will help you avoid such scams, and put your money to good use, instead of wasting it.
You Will Be Shocked at what these company's do to send you traffic!
This is the most immoral, unethical, and dishonest business practice I have ever come across online. These companies know exactly what they're doing. After all, if their traffic methods work, wouldn't they use it themselves? Why is a company offering millions of hits to their visitors, when they are only getting 10-15 hits a day? They don't use their own methods, because they know their hits are useless.
I fell victim to this scam, as have thousands of others. These companies give you a sales pitch something like this...
Suppose that you sell a product for $25 and that in a worst case scenario only 1% of your visitors purchase your product.
An average site gets less than 100 hits per day (3,000/month). Thus, approximately 30 people will purchase the product every month (1% of 3,000). That means you are taking in only $750 per month (30 x $25)
With our service: Suppose the site owner (you) purchases 100,000 visitors with our service. Using our assumption that only 1% of visitors will purchase the product, a total of 1,000 purchases will be made. That's a value of$25,000! And that is if only 1% of visitors purchase the product! Think about the return on your investment!
If you're like me, you got pretty excited when you read that. After all, there's no conceivable way you can't at least earn your investment back, right? WRONG!!
You give in, order their service, and at first, you get excited, because traffic is pouring in! Soon you realize that your money is earning you nothing. In fact it's costing you your bandwidth, and not delivering any results!
Of course no company, no matter how credible they are, can guarantee you sales. That depends highly on your ad copy, price, and the demand of the item. I can guarantee though, that some of these company's have thousands of clients, and not one of their clients has ever made a sale.
I bought my traffic... Now where are all my orders?
Now remember, worst case scenario is that 1% of your visitors will buy your product. Right? WRONG! If that's the case, then where are your orders? These company's place these ads right in your face when you visit their website. This way, your sold before you even see the price, and you'll buy into their high prices.
Naturally you are going to believe that you'll pay off your "investment" right away, and make a ton of extra money. After all, you spent hours writing that "perfect ad," so you're going to draw in a lot more than 1%.
I'll let you in on a secret. No matter how good your ad is, it doesn't do any good if it's never read.
You sit there and watch traffic come flying in at hyperspeed. Then they fly out. You don't make any sales. What do you do now? If you're like me, you're going to email them, complaining how you didn't make any sales from their services. They're going to tell you some variation of the following...
"I'm sorry you didn't make any sales. If you read our terms, you would see that we can only guarantee that we send the traffic to you. The sales are your responsibility. We cannot guarantee sales, because we are not involved in the writing of the advertisement."
This leaves them clean from delivering any refunds. Trust me, they won't refund your money!
Starting to get suspicious? The truth is your traffic was delivered in a misleading way.
You were sent FAKE VISITORS, or GHOST VISITORS, as they are widely called online.
Have you been tracking your traffic?
Many people don't realize that there are free scripts that you can install on your site to track detailed statistics about your traffic. I'm not talking about counters. Counters are inaccurate, plus they don't tell you anything about your visitors.
If you actually monitor your traffic, you can learn lots of things about your visitors. Including the countries they're from, their IP addresses, the time they came to your site, the time they left your site, the site's they were referred from (google, yahoo, etc..), and the keywords they used to search for your site.
My statistics were shocking!
The traffic I ordered had no IP address, no search engine, none of my visitors navigated past the front page! I paid for these "Guarantee'd Real Visitors," and I have the right to know where they come from. Guess what, I figured it out!
A few of the hits that they had sent, slipped up, and didn't disguise their origin as well as they should have...
I kept seeing the same IP address over and over and over again about 900 times in one day. I thought somebody out there really must love my web site or it's the scam hit company I hired. Well I clicked the link that night which was labeled with an IP address, not the actual web site .com name itself just the numbers of the IP address....I clicked that and wouldn't you know it? I received just a site telling me it doesn't exist.
With my campaign still running the next day along with all the "unknown" places I seen a peculiar url and had to click that to see where over 500 of the same people were coming from and I ended up in Pop Up hell! You know that hell don't you? Where you are swarmed with so many pop ups that you literally have to pull the plug on your computer to get out of it? The sad part about that link is that all the Pop Ups were from PORNO sites!
It's no wonder these companies don't tell where they deliver their traffic from! After all, what ethical business wants to advertise on those disgusting adult sites?
So you want to know exactly how this all works?
After following the slipped up referral link, I was directed to a website where anyone can post their own free adult site. (If your going to try and follow these links yourself, I would suggest switching your browser to text only mode, as I did. Otherwise you'll get flooded with pop-ups, and disgusting porno pictures.)
Now we have determined that my traffic was coming from this site, but I didn't see my site at all...
I switched back to my traffic log, and hit refresh. I WAS STUNNED! At the top of my log, I had 12 hits to my site, all with my IP address!!! By viewing this site just once, I recieved 12 hits!!
I switched over to www.Alexa.com. Alexa is a site ranking service, that can tell you how popular a site is. This adult site that I was listed on was recieving 786,376 hits per day, on average during that week. Multiply that by 12, and that's where all my traffic came from!
So now we know what site is generating the traffic, but how are they disguising the IP address. Why wasn't my site ever shown on screen to me? The answer lies in the HTML source code...
Here are the secret codes!!
One of the tricks that these companies use is a the way they hide where your traffic is coming from. The way they do this is through a redirect code. A redirect code is simply a cade that webmasters use on their websites to take one website and send it another way.
The biggest trick is how they can mysteriously load your site multiple times, without you seeing it. They do this by embedding your site into theirs, and making it tiny. So tiny in fact, that it looks like a period. So instead of using periods at the end of their sentances, they just embed their clients sites sites to look like a period.
Try it for yourself
Open up your HTML editor, or notepad, and create a sample page using this code.


Testing the Embed Script





Now open it in your web browser. What you get is a small box in the left hand corner of your website. For this example, I made the code 5x larger than these companies do. So you can see how easily they disguise these sites. Inside that little square, is actually an entire website!!
So your thinking, they just embed my site into that little square, 10-15 times on the page, and that's where my hits come from. Yes, and No. Essentially that's how it works, but if they put your website into that square, you could easily trace the traffic back to the adult site. So what they do is put their redirect page into that square, and redirect it to your site, so now it looks like all the traffic is coming from them.
So let's put it all together.
You order traffic from a traffic company.
The traffic company creates a free adult site and lists it into a directory of free adult sites. According to our alexa review these sites get 786,376 hits per day. If their redirect page gets 12 hits every time someone loads the adult site, that means they have an average of 9,436,512 hits per day, which they divide among their clients.
For some of the Monster Traffic Companies, 9.5 million visitors a day just isn't enough. They can easily turn that 9.5 million visitors, into as many as they need. Instead of embedding the redirect page. They embed a page full of these periods. That way, when their "period farm" page loads, they can have as many sites load as they want.
They simply change the redirect page to whatever client they want the traffic sent to.
Your counter goes crazy, and all your hits are delivered.
You never make a sale. Now you can understand how you could have thousands of visitors sent your way, and never make a sale. Your site is never really displayed.
The traffic company has delivered exactly what they said they would, and are clear from any refunds.
Our Company, www.CadenzaWeb.com Provides You with REAL traffic, that you can track, and get detailed statistics on. Our Sales have quadrupled since we started using this ourselves. Check Out www.CadenzaWeb.com for more information.
Interested in becoming an ethical traffic reseller? We have a dedicated website just for resellers at wholesale rates as low as $1 CPM (per 1000). www.Sell-Traffic.com
Want to use this article on your site? Please do, just leave our name and link attached.

Manage Auto Finance

If you are looking for information on how you can do with responsibility for managing the finance program your car you do not need to look no further. To tips, warranty, credit outline his or her account, can quest for managing car loans in particular, in the remainder of this work, they in a way that is most responsible to help borrowers on their own like this are included.


Three Tips for consumer credit

* Please pay the monthly installments of your credit and full time. It is very important to pay your credit debt thoroughly you will be responsible. Tomorrow is not only help you avoid shelling out money for the cost of substantial penalties and interest arrears added. You can use the key toward help build good credit you tomorrow profile, the better financial opportunities. So, I hold the tip in mind always.

* Once in a while, I will check the fine print of your automobile finance programs. It is also important to spend some time to consider an important prerequisite for the credit of your program. At the end of the day, on terms and clauses of the loan on your car, help me to refresh your memory this tomorrow. In this method, the measurement of the level usually fine to be imposed on the borrower fails to live up to the terms of financial transactions you sing, please avoid input, an additional fee.

For example, doing a reading of this level, you, especially if you are terminated pre prohibits clause credit agreement that your you also may cause you to penalties huge input, interest costs Set the debt before the due date can be agreed in advance to pay for your financial obligations can never save a lot of money. So, instead of paying in advance for the obligations of your finances in place, in order to avoid penalties and tomorrow, to pay an additional fee, he decided through the payment terms set by the loan of your car.

By reviewing the fine print the program your credit It simply remembers it is possible to perform the restriction on the provision of funds which can be kept to a minimum to pay your credit to address in order I’m going to show that.

* I am looking at a copy of your credit report and your order. You order your credit report six months to one year from the time the copy with a car finance program. But why would you do we need this?

Can be employed to provide an opportunity to determine whether it helps to build credit status you have a good, order the credit file from your credit check of all three habit credit your responsibility. After all, it is necessary to display all of the activities and transactions of your credit your credit report.

If you find that it is fraudulent transactions and payment record wrong to file your credit, you will need to write a letter of dispute credits to companies that supply you with documents that were accidentally immediately implemented. In this way, the employees of the company, you can examine your claim. Made a mistake when you update your credit report, then, they will tomorrow we need to find to make the necessary adjustments to your files they send a document accurate you certainly.

Auto Financing

Now, we usually find a lot of individuals and families who do not have any source of work and income, that the economy is down. May result in specific conditions, because it may spoil the reputation of the building immediately credit for several years, it is concerned this should be. Payment becomes delinquent, there is nothing you can do about it. You significantly reduced, which can take the work to pay may not be able to help you get the car you need may be most desperately. Fortunately, the trend of lending to this vehicle, it is you will be able to offer in news, current probably such a good following.

You can you get a car loan still required

It is no longer necessary that there is a need to have a perfect credit rating and huge income in order to obtain a car loan you need. Currently, this may become a good opportunity for them to gain more clients, lenders are desperate to provide what you need. This means that you can get a lot of lenders are willing to provide information of a bad credit card financing just perhaps. I am a little research is all you need. Learn exactly what you need to do in order to find a lender, to improve your chances of acceptance.

Trust the experts

Currently, most lenders will consider as an expert in any type of financing. Lenders are very friendly but they may be able to help you find the right kind of loan you need. Even if you have been rejected by the dealer, you can arrange to know the tricks of the trade, so that your loan is approved lenders frequently.

Dealers can be difficult

Do not let the dealer pull your credit report, this could be a very expensive mistake. Instead, you trust, he will find a reputable lender that you can trust to handle your problems on a regular basis. Browsing for cars to look at your credit report automatically, do not have the rights to each dealer. Even worse, contact for more information about your credit score seems to potential lenders. Because you know your score, have its own copy of the report, a better plan is as follows.

You might think you want to cry about your credit score, I am okay to discuss credit issues with people that can be it you can trust, who will give appropriate advice to you . If real lenders loan loan your car to exist, it is not a business you do not see your credit report.

Mike McTigue is a journalist and former car dealer and auto loan special, and unique insight into automobile finance industry.

Le magnétisme terrestre

Le magnétisme terrestre

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La compréhension du magnétisme terrestre a constitué un pas très important dans la formulation de la théorie de la tectonique des plaques. Deux aspects du magnétisme retiennent l'attention: le paléomagnétisme et les inversions du magnétisme terrestre. La découverte de bandes d'anomalies magnétiques sur les planchers océaniques parallèles aux dorsales est venue cautionner la théorie de l'étalement des fonds océaniques de Hesse.

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1 - Le Paléomagnétisme
Bien que les Chinois aient découvert les premiers le magnétisme terrestre dès l'an 1040, il revient à William Gilbert, physicien et médecin de la reine Elisabeth I d'Angleterre au 16^e siècle, d'avoir réalisé que si l'aiguille aimantée d'une boussole pointe invariablement vers le Nord, c'est qu'il y a quelque chose, une sorte d'aimant placé au centre de la terre, et qu'il devient possible de calculer la direction et l'intensité du champ magnétique en tout point de la surface du globe.
La terre agit comme un dipôle magnétique, ou encore comme un aimant. Les lignes de forces magnétiques établissent tout autour de la planète un champ magnétique terrestre. C'est la raison pour laquelle l'aiguille d'une boussole s'aligne automatiquement selon les lignes de force, dans une direction nord-sud.
Il aura fallu attendre près de deux siècles, soit vers la fin du 19^e siècle, pour qu'on développe le magnétomètre, un appareil capable de mesurer l'intensité du champ magnétique, ouvrant la porte à l'exploration quantitative du champ magnétique terrestre. On se rend compte alors qu'il y a des anomalies, i.e. des différences entre les intensités mesurées en un lieu donné et les intensités théoriques calculées selon l'hypothèse de Gilbert: anomalie positive (champ réel > champ théorique) et anomalie négative (champ réel < champ théorique).
Le physicien napolitain Macedonio Melloni (1853) découvre que chaque roche volcanique possède sa propre aimantation. Il formule l'hypothèse que cette aimantation a été acquise lors du refroidissement de la lave qui enregistre le champ magnétique terrestre de l'époque. Les laves possèdent donc une "mémoire magnétique". Deux chercheurs français, Brunhes (1906) et Mercanton (1910 à 1930), confortent la découverte de Melloni en y apportant les fondements théoriques. Il a cependant fallu attendre l'après-guerre pour voir une utilisation intensive de cette "mémoire magnétique".
C'est une percée technologique qui a lancé toute l'histoire. En 1952, le physicien anglais Patrick Blackett, prix Nobel en 1948, invente, au cours de recherches sur les relations entre le magnétisme terrestre et la rotation de la terre, le magnétomètre astatique, capable de mesurer des champs magnétiques extrêmement faibles. En 1959, avec ses collaborateurs Keith Runcorn et Ted Irving, il utilise l'appareil pour mesurer la mémoire magnétique des roches; c'est la naissance d'une discipline qu'on appelle aujourd'hui le paléomagnétisme. On se rend compte que grâce à cette mémoire, on peut déterminer la position des pôles magnétiques pour diverses périodes géologiques à partir de roches dont l'âge est connu. Runcorn propose de définir, époque par époque, la position d'un paléo-pôle magnétique pour diverses régions, un travail minutieux qui consiste d'abord à définir pour l'Europe, une trajectoire de la "promenade des pôles" (polar wandering) à travers les temps géologiques, puis ensuite de faire le même exercice pour l'Amérique.
La carte ci-dessous présente une vue de l'hémisphère Nord centrée sur le pôle Nord magnétique, selon la géographie actuelle. Le trait rouge indique la trajectoire apparente du pôle nord magnétique terrestre établie à partir de plusieurs mesures du paléomagnétisme sur des échantillons datant de l'Éocène au Cambrien, prélevés sur le continent européen. En trait bleu, c'est la trajectoire établie à partir d'échantillons datant de l'Éocène au Silurien, prélevés sur le continent nord-américain. En trait vert, c'est la trajectoire établie à partir d'échantillons datant de l'Éocène au Jurassique, prélevés en Inde. E=Éocène (50 Ma); J=Jurassique (175 Ma); T=Trias (225 Ma); P=Permien (260 Ma); Ca=Carbonifère (320 Ma); S=Silurien (420 Ma); Cb=Cambrien (530 Ma). Les âges absolus (entre parenthèses) correspondent au milieu de la période mentionnée.
Deux choses apparaissent anormales ici: 1) les trois trajectoires ne coïncident pas; il devrait pourtant n'y avoir qu'une seule trajectoire puisqu'il n'y a qu'un seul pôle nord magnétique terrestre; 2) plus on recule dans le temps, plus le pôle magnétique s'éloigne du pôle géographique; on sait aujourd'hui que même si le pôle magnétique terrestre se déplace par rapport au pôle géographique, ce déplacement est minime; les trajectoires représentées ici sont donc beaucoup trop longues pour être réalistes. Durant l'intervalle entre la découverte du paléomagnétisme et la formulation de la théorie de la tectonique des plaques, on a cru à cette hypothèse du "polar wandering". Aujourd'hui, on comprend bien que la seule façon de résoudre ce problème de l'apparente promenade des pôles à travers les temps géologiques et de leur manque de concordance selon que les données viennent d'un continent ou l'autre est de déplacer les masses continentales les unes par rapport aux autres. C'est d'ailleurs ainsi qu'on parvient à reconstituer la position relative des continents pour chaque époque géologique. La théorie de Wegener refait surface!
Wegener avait supposé que la Pangée avait existé depuis l'origine de la terre et qu'elle n'avait commencé à se disloquer qu'autour des 200 Ma. La dérive des continents étaient pour lui un phénomène irréversible: morcellement d'un mégacontinent originel en parties de plus en plus petites. Mais les paléomagnéticiens (certains disent les paléomagiciens!) ne se sont pas arrêtés aux derniers 200 Ma. Ils ont reculé jusqu'au début du Paléozoïque pour se rendre compte qu'il y a eu des dérives continentales plus anciennes, antérieures à 300 Ma. Mais, toutes ces reconstitutions laissèrent sceptique la communauté scientifique des années 50-début 60; de nombreuses objections seront soulevées. Le tout-puissant physicien Harold Jeffreys, adversaire irréductible de tout mobilisme, ira jusqu'à écrire que le marteau utilisé pour le prélèvement des échantillons est responsable de l'aimantation!
On sait aujourd'hui, grâce à la théorie de la tectonique des plaques, que les continents ont bougé tout au long de l'histoire géologique, et le paléomagnétisme est utilisé comme outil de base pour reconstituer la position des continents aux diverses époques géologiques (voir section 4: Histoire de la Planète).

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2 - Les Inversions du Magnétisme terrestre
En 1906, Brunhes découvre que non seulement les laves ont une mémoire magnétique, mais aussi que certaines montrent des inversions du magnétisme; en d'autres termes, que le dipôle Nord-Sud aurait été à certaines époques Sud-Nord. A la même époque, le japonais Matuyama ajoute une notion temporelle à ces inversions. Il date diverses coulées de laves et conclut à l'existence d'inversions multiples à travers les temps géologiques. Les conclusions de Matuyama tombent dans l'indifférence et l'oubli pour une période de près de 50 ans, jusqu'à ce que les américains qui prenaient beaucoup leurs distances par rapport à l'application du paléomagnétisme aux dérives continentales se passionnent pour les inversions de polarité magnétique.
Le physicien américain J. Graham (1950) a été en quelque sorte l'étincelle dans le renouveau d'intérêt pour les inversions. Il avait émis l'idée que les inversions de polarité magnétique ne sont pas dues à une inversion du champ magnétique terrestre comme l'avait proposé Matuyama, mais à un phénomène bien connu en physique des solides, l'auto-inversion, qui interviendrait lors de la cristallisation de certains minéraux. Bien que fausse, cette proposition a eu le mérite d'avoir amorcé un débat qui remit à l'ordre du jour le paléomagnétisme.
En 1960, John Reynolds du département de physique de Berkeley (Californie) et John Verhoogen du département de géologie de la même université unissent leurs efforts pour étudier des basaltes: l'un met au point une méthode de datation isotopique permettant d'avoir des âges précis, l'autre s'applique à obtenir des mesures fiables d'orientation du paléomagnétisme sur les mêmes échantillons. Ils démontrent rapidement le bien-fondé des conclusions de Matuyama. Walter Elsasser de l'Université Princeton et Ted Bullard de Cambridge en Grande Bretagne développent l'idée d'une dynamo centrale située dans le noyau terrestre. Pour expliquer les retournements épisodiques du champ magnétique, ils conçoivent que cette dynamo pourrait présenter des comportements instables.
Finalement, la réalité des inversions du champ magnétique va être démontrée entre 1960 et 1966 par deux équipes issues de Berkeley: une équipe du USGS (United State Geological Survey) en Californie composée d'Alan Cox, Richard Doell et Brant Dalrymple, et une équipe de l'ANU (Australian National University) formée de Ian McDougall et François Chamalun. A partir de laves relativement récentes, ils construisent ensemble une échelle des inversions de la polarité magnétique pour les derniers 4 Ma, une échelle applicable aux U.S.A., à l'Europe, au Pacifique et à l'Australie, et qui a valeur mondiale.
Les schémas qui suivent expliquent comment on a utilisé les inversions du champ magnétique terrestre pour construire une échelle magnétostratigraphique.
La figure A montre comment on peut établir une échelle magnétostratigraphique locale à partir d'un empilement de coulées de laves, chacune bien datée. Les laves enregistrent, au moment de leur cristallisation, le champ magnétique terrestre telle qu'il est à ce moment. Par exemple, supposons que la première coulée date de -4,1 Ma; elle a enregistré la polarité de l'époque, soit une polarité normale. La seconde coulée, datant de -3,4 Ma, une polarité inverse, et ainsi de suite. Avec le temps, il se construit un édifice stratifié, constitué de coulées de polarité, ou normale, ou inverse, et de plus en plus jeunes vers le sommet de la pile. Supposons que l'on fasse un forage carotté dans cet édifice; on datera une suite d'échantillons prélevés sur la carotte et pour chacun, on mesurera la polarité du paléomagnétisme (figure B). On reportera les données sur une échelle de temps géologique, en indiquant la polarité (figure C). Ainsi, dans notre exemple, un échantillon ayant donné un âge de -4,1 Ma a indiqué une polarité normale (point rouge); un échantillon d'âge -3,4 Ma, une polarité inverse (point bleu), et ainsi de suite. Plus on aura de points, plus notre échelle sera précise en ce qui concerne les âges géologiques où il y a eu inversion magnétique (par exemple ici, la précision est plus grande entre -0,8 et -0,9 Ma qu'entre -3,2 et -4,1 Ma) et la répartition temporelle des périodes normales par rapport aux périodes inverses. C'est en regroupant les données de plusieurs successions au monde (plusieurs échelles locales, obtenant ainsi une multitude de points) qu'on est parvenu à construire l'échelle des derniers 4 Ma (figure D).
Durant cette période de temps, il y a eu plusieurs inversions (indiquées par les changements de couleurs), mais on fait des regroupements en époques et en événements. Il y a eu des époques où c'est la polarité normale (en rouge) qui a dominé (Bruhnes, Gauss) et des époques où c'est la polarité inverse (Matuyama, Gilbert). A noter que les époques ont été dédiées aux grands pionniers de notre compréhension du magnétisme terrestre, alors que les événements portent des noms de lieux.


Voici un exercice pour vous aider à mieux comprendre comment on a construit l'échelle magnétostratigraphique.

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3. Les Anomalies magnétiques des Planchers océaniques
Lors des premières phases de l'exploration des fonds océaniques, les relevés de l'intensité du champ magnétique à l'aide d'un magnétomètre tiré par un bateau avaient montré l'existence, sur ces fonds, d'une alternance de bandes parallèles de magnétisme faible et de magnétisme élevé. On s'expliquait mal cette situation.
Au début des années 1960, Vine, Matthews et Morlay ont apporté l'explication voulue et montré que l'existence de ces bandes d'anomalie magnétique venait supporter l'hypothèse de l'étalement des fonds océaniques de Hesse. La formation de lithosphère océanique à la dorsale enregistre la polarité du champ magnétique terrestre au moment où cristallise le basalte. Le plancher océanique qui s'étale se comporte comme la bande magnétique d'un magnétophone qui fixe le son (ici, la polarité du champ magnétique) au fur et à mesure de son déroulement. Ce sont ces différences de polarité magnétique qui sont responsables des anomalies de l'intensité du champ. La polarité actuelle étant normale, les bandes d'intensité élevée correspondent aux bandes de polarité normale, résultant d'un effet d'addition, alors que les bandes d'intensité faible correspondent aux bandes de polarité inverse, résultant d'un effet de soustraction. Les quatre schémas qui suivent montrent comment se construit dans le temps un plancher océanique constitué de bandes parallèles, de polarités magnétiques alternant entre normales et inverses, et symétriques de part et d'autre d'une dorsale.

Why Forex Traders Plan To Fail Before They Even Place Their First Trade & How You Can Know It & ...

Why Forex Traders Plan To Fail Before They Even Place Their First Trade & How You Can Know It & ...

Have you heard the wise saying that a trader who fails to plan, plans to fail? I have, and I was once that trader! However, did you know that even though traders who have constructed a plan, which incorporates their trading stategy (their "edge"), they have a plan that is likely to fail?
If we look at all traders who participate in the market: we have one group that fails to plan and therefore plans to fail; another group whose plan is failed; and a third group who properly plans and therefore does not fail.
Is it any wonder that the success rate for forex traders is so slim?
Well it doesn't have to be.
Here's a list of reasons why those whose plan is destined for failure fail:
1. They become emotionally attached to their ideas about how the market should be with minimal or inadequate testing;
2. They fall in love with their back-tested net profit results without fully understanding other key statistical data;
3. They don't admit they're plan is wrong.
Let's explore each point in a little more detail.
1. Becoming emotionally attached to your ideas without adequate results
Most new traders when they realize the importance of obtaining a trading plan and sticking to that plan immediately begin to use the knowledge they have been taught and haphazardly throw it all together into what they deem their "trading plan".
When they are questioned on whether they have a trading plan most of these traders answer with an unequivocal "Yes!".
Most of these traders are destined for failure because their strategy is untested. They rely on blind faith to guide them through the trading jungle to make their untold millions. Would you walk from one length of the Amazon jungle to the other blind-folded? Of course not! You'll have to watch out for all the snakes, tarantulas, and other creepy things that go bump in the night, so why would you approach trading in the same fashion? I mean all you're really doing is placing the blind-fold on your capital!
Why do traders do this?
Because it's easy. That's right... it's easy. They don't need to learn a computer language to type their system into some piece of software that will take them the better part of 6 months to a year to learn, and they don't have to spend any money on buying historical data. Therefore it's easy and it's cheap and it also conserves time!
So does success meet lazy people like this?
Not many! However I will admit that it does meet a fortunate few - only those lucky enough to start their trading during roaring markets where even a monkey can make money! To repeat again: don't wear the blind-fold. Your success may be great at the start, but given time and trades, you'll be the one out of the game - having depleted all your capital.
So what do you do if you KNOW that your method is untested?
If you have the time, the money and the learning capacity I would strongly encourage you to purchase some back-testing software (such as Wealth-Lab Developer), acquire some forex data, ask heaps of questions on the Wealth-Lab forum on how to code your ideas and within 3-6 months you'll be safely coding your own forex system and testing adequately.
If you do not have the time, the money nor the learning capacity I would strongly suggest that you manually write down your system into clearly defined steps that you MUST follow. Then, after opening a DEMO forex account you would trade your system according to the rules you have set out. Trading your rules until about 20 trades have been completed.
After traders obtain their results from their testing period they unfortunately look at only one figure and make a rash conclusion about the system based on that one performance figure, namely, the net profit. This then leads us into the next problem of why traders plans are failed prior to placing their first live trade...
2. They fall in love with the net profit result and no longer question it any further!
The net profit is only one statistic among thousands, however, to keep things simple we will look at the top 3 results that you need to make sure you fully understand.
Here are the other statistical pieces of data that you should look at when your system has completed its testing period:
I. How many trades did it have? If you have made a nice profit, but have only had 3 trades during the testing period you do not have a sufficient sample space to arrive at any safe conclusions. Can you imagine what would happen to Neil Armstrong if NASA had only done 3 computations on how they would arrive on the moon??!! If it's not good for NASA then it's probably not good for you either, however, as NASA do zillions of computations you would only need to conduct about 20 trades as the bare minimum before you can arrive at any safe conclusions;
II. What was your money management procedure during the testing phase? This is by far the most important point, however, you need to make sure your system is properly working prior to even embarking on this difficult area (hence the reason why it is a CLOSE second to the above point). Be sure you fully understand what I am about to explain (read it several times to absorb it if need be)... If you test a method whereby you rely on a percentage amount of capital on a trade you can be biasing your results!
How?
Let us look at the following comparison sheet where we plot 21 trades with their pip return (we'll assume that each pip = US$1), and compare the returns against using 10 contracts per trade, 10% capital per trade, or 2% risk per trade...
Example Trade Sheet
Now as you can see from the results they can easily be doctored according to the different type of money management technique you use and what variable you decide to use it on (i.e. who is to say that we not use 20 contracts per trade, or 20% capital, or 5% risk per trade - all of these would inflate the net return figures).
It is best when you trade to stay at a fixed quantity. If you use any results that require a percentage calculation of the equity balance prior to the trade quantity being calculated you will BIAS the last trades more than the trades at the start. Hence, using a fixed quantity throughout the entire sample is one of the true indications of whether your system is profitable or not.
III. What was the drawdown? This is the largest peak to trough distance on your equity curve. In other words, if you were to enter in on the day the equity curve made a peak, how much would you have lost if you bailed out at the lowest point? To test this manually you would obtain an equity curve peak trace how far the equity curve goes down until it moves higher that the peak you started from - the lowest point made between these two points will be your trough figure which you will then subtract from your starting peak figure. The figure with the largest % loss would be your drawdown.
You would then need to look at this drawdown figure and determine whether or not it fits your risk profile. Would you be okay mentally if your account was down the drawdown % figure? If not, then you're going to have to re-create another system. As a rule I don't like systems that generate more than 30% drawdown.
One other statistic that incorporates drawdown that I like to check to determine whether the system is profitable or not is the recovery factor. The recovery factor divides the net profit by the drawdown (without the negative sign). As an example, if the net profit were $5,659 and the drawdown were -$3,542 dividing the net profit by the drawdown would result in a recovery factor of 1.597 (get rid of the minus sign). I generally prefer systems to have this statistic above 3.
So even though we have created our system that fits our personality and risk tolerance level well trades can still fail by not heeding the third and final statement...
3. Don't fall in love with the system
Most traders once they have designed a system cannot believe that their system is making a loss, or worse yet, a loss greater than the system's historical drawdown.
So, to combat this they dig their head in the sand hoping that the problem will go away. Just as trades fall in love with their position, at their own peril, falling in love with their system is also to their detriment.
Treat this as a business with your system as one of your salesmen. If the salesman is costing more than he is bringing in then you need to fire him and find another one.
How do you know if your system is no good?
As a rule I look at the historical drawdown of my system and add 10%. As an example, if my system had historical drawdown of 20% once the system reached 20% x 1.1 = 22% I would stop trading this system and move onto another. And sometimes you can still trade the same system, just with different variables, or a minor tweak.
Be sure that you fully understand the implications presented to you in this article. Trading is a business, therefore conduct it like one, as it is one of the most difficult endeavors you could ever undertake.
Ryan Sheehy is the author of Currency Secrets.com and Forex Zoo

The Secrets of the Super-Traders

The Secrets of the Super-Traders

The first and perhaps most important "secret" is to realize that your methodology or approach (no matter how good) is only part of being a highly successful trader. This applies to any trading style including, day trading, swing trading or position trading.
The simple fact is that a bad trader can screw up a fantastic trading system. Conversely a talented trader can take a mediocre strategy and make money with it.
Why? Please read on and I will explain.
Many traders/investors that I have talked with think that to be a "Super-Trader" that they must possess some type of highly advanced trading techniques or software along with nerves of steel and a highly developed intuitive feel for the markets. In addition they think that these elite group, have some "inside information" that they don't.
You will be relieved to know that the above is not necessary. There are actually only a few things that separate traders who consistently make money and those who don't.
And here they are?
* Skilled traders find a strategy or market pattern that offers a high probability for success. They make money by exploiting this edge over and over again.
* Skilled traders never deviate from their methodology or "wing it".
* Skilled traders never enter a trade without a entry and exit strategy. They know exactly when and where to cut their losses as well as taking profits.
* Skilled traders never ever let a winning trade turn into a losing one. The easiest way to ensure that this doesn't happen is to place a protective stop at or a few ticks in the money once your position is up several points.
* Skilled traders never hope, pray or wish that their stock would go up. They understand that when they are wrong they are wrong and the best thing to do is cut their losses short.
* Skilled traders never trade with their emotions. They don't allow themselves to get caught up in the latest and greatest investment hype.
* Skilled traders always have one goal in mind: To preserve their capital at all costs. They do this by never taking on too large of a position. A good rule of thumb to adhere to is never use more than 5% of your funds on any one trade. This way in the worst-case scenario the stock could drop to zero and your account would not be severely affected.
* Skilled traders never get too greedy. There is an old saying that "Pigs gets fed and hogs get slaughtered". These traders don't try to make one big trade that will turn them into instant millionaires. They don't try to hit home runs, instead they understand that it is better to keep hitting singles and making smaller consistent profits.
* Skilled traders enter and exit trades swiftly and decisively.
* Skilled traders listen to no one else's opinion concerning the market or particular trade they are in.
* Skilled traders are often contrarians. They will be buying when others are too scared to and sell when the crowd starts buying.
That's it, the secrets to making big money in the markets. Perhaps that is a bit of a let down as you were hoping for something a bit more esoteric and complicated.
Let me assure you that if you follow the above principles that you will take your trading skills and profits to a level that you never thought possible!
This article is courtesy of Dr. Jeffrey Wilde, a trading veteran with 15 years of experience in all major markets. He is a trading coach to over 1400 traders in 38 countries.
For additional info: http://www.win-at-trading.com

internet and Computer Systems in the FOREX Business

internet and Computer Systems in the FOREX Business

With every passing year the interest in electronic trading is bigger, more especially trading shares and currency through Internet. A new profession came forward ? this of the currency dealer. The appearance of this profession was caused by the full force of development of Internet, which enabled the exchange business to be carried over at home or at the office. The electronic platforms offered by banks and investment brokers enables all of us to go in the sea of the financial markets and to start living a difference and unknown by this moment way of life.
The development of the computer technologies, the program security and the telecommunications, as the same as the grown experience, raises the qualification level of the brokers. It it's turn this raises the belief of the brokers in their own abilities to benefit and to lower the risk while operating. That's why the higher level of the trading qualification leads to a higher level of trade amount.
The introducing of automated dealing systems at the eighties, as the same as co-coordinating systems in the beginning of the internet trading at the end of the nineties, entirely changes the standard methods of currency trading. The dealing systems are online computer systems which integrate the banks in a united net while the co-coordinating systems become electronic brokers. The dealing systems are more reliable and much more effective which enables the dealers to realize a bigger number of concurrent transactions. Moreover, they are safer as far as the dealers can observe the executors of the transactions. Thanks to their reliability, speed and safety, the dealing systems are playing cardinal role in the expansion of the currency business.
The using of computers is taking a substantial role at many stages in the realizing of the currency business. In addition to the dealing systems the co-coordinating systems connect together the dealers all over the world in this way building up an electronic brokers market. The new office systems are ensuring a full account report, filling vouchers, keeping secretary work, procedures of lowering the risk and they account the expense for their acquisition. The present-day program products afford an opportunity to be generated all types of graphics, adding theoretically well-grounded technical indicators and favour the dealer for lon lasting using with comparatively low expense.
The using of Internet makes the financial information about the currency markets, currency indexes and prognoses about the rate of exchange, easy accessible all over the world. Now there are many websites with financial information. A big role in the currency trading has the rate exchange. The speed of the electronic post makes it possible getting these prognoses in a moment. If you take out a subscription to such a service, you can get prognoses of rate-exchange by electronic post every day. Such a service you can find at the following address:
http://www.iforex.org
Eric Cooper is moderator of Internet Forex Club which provide to it's members useful forex forecasting and trade recommendation service. You can join the site at the following URL: http://www.iforex.org

How To Handle A String Of Losses

How To Handle A String Of Losses

Everybody hates to lose and unfortunately no one is blessed with the ability of foresight, therefore losses are an unavoidable part of trading. When we enter a trade we will either be right, or wrong, and even if we broke-even we'd still be classed as being wrong - as nobody enters into a trade just to break-even! When unsuccessful traders encounter a string of losses they begin to engage in self-destructive patterns that help them escape the pain they are experiencing.
In this article we bring to light these self-destructive actions that can help you realize what you are doing before it takes hold of your physical health. If you find yourself already engaged in these patterns hopefully this article can help you to get you back on track as quickly as possible.
The Destructive Patterns
If you find yourself caught in a string of losses or a bad performing week/month be sure to monitor your behavior. It is during this time that you will be at your most vulnerable. You will begin to indulge in activities that at first seem harmless, but upon excessive use (or in time), begin to cause physical damage to your health.
Ask yourself the following question: during during drawdown periods do I find myself over-indulging in these activities:
> Food (especially junk food - eg. chocolate, ice-cream, chips)?
> Sex (includes viewing pornography)?
> Alcohol?
> Drugs (includes excessive smoking)?
> Laziness (find it difficult to wake up in the morning)?
> Entertainment?
All of the above taken in excessive doses can be detrimental to your own physical health (some even in small doses!).
These activities above during your losing period are only covering up the pain of confronting the true issue, and your body tries to rid the emotional pain by trying to "fix" it with physical pleasures. Unfortunately it is going about it in the wrong way, so what should you do?
Firstly... REALIZE WHAT YOU ARE DOING AND STOP IT!
You need to realize what you're doing and you need to STOP doing it immediately! You can either decide to stop, or you'll be forced to stop when your body eventually breaks down and prevents you from any form of movement. It will be much more beneficial to you in the long-term if you can decide to stop *NOW*.
Once you have stopped you now need to figure out a way to solve the pain - not by cutting out or neglecting it, but by staring it in the face. Bring your problems out into the light, be honest with yourself. There can be no growth without pain, you are experiencing the emotional pain, now it is time to find the error and therefore your growth.
Begin Your Review
The review process begins in two separate areas: You & Your System. Here are some checklists for you to go through to find out where the problem could lie:
"YOUR SYSTEM" CHECKLIST
> Was your system thoroughly tested prior to trading it (or paper traded if you do not have the capacity to programme your system into backtesting software)?
> Did you test with out-of-sample data?
> Do you even have a system???? If you do not, how do you even know if the method that you are trading is even profitable??
> Is your system's code correct?
> Did you over-optimize your system? (what have we discussed about over-indulging?)
> Did you paper trade your system prior to placing capital on it?
> Did you trade with a small amount of capital prior to placing the rest of your funds on it?
> Do you know the system's limitations?
> Did you properly drill your system? (see our blog article on why I am the system designer from hell)
"YOU" CHECKLIST
> Is the current drawdown you are exhibiting with your system normal?
> Are you comfortable with your system's historical drawdown performance?
> Are you fully aware of the risks involved with your system and the instrument(s) you are trading?
> Are you trading with funds that you are comfortable risking?
> Are you relying too heavily on your performance?
> Have you set realistic goals?
As you can see there are generally two areas that you need to explore: the mechanical aspect - your system - and the emotional aspect - you. Both can be responsible for making the way you feel the way you do. It will either be an error on the system's side with how the system was tested and/or programmed, or it can be your own psychological profile not being comfortable with the system's performance.
Your Answers = Change = Your Growth
What steps should we now take? Now that we have begun a corrective process where we have stopped the evil nature of our over-indulging ways to take control we should continue our "corrective nature" by invoking our findings and taking ACTION in correcting our errors.
If the problem was mechanical - fix it, if the problem was emotional either go about setting up new thought patterns, or change your current system. The answers lie in whether you need to expand your knowledge in system development, or whether you need to grow emotionally as a person.
Unfortunately there is no easy road, and even if there was everybody would be doing it. Hopefully this article has made you ponder over some of your behaviors during drawdown periods, be sure to keep an eye on yourself and as always take care of your body, because there's no use in making all the money in the world when you don't have the physical capacity to enjoy it.
Ryan Sheehy is the author of http://www.currencysecrets.com where you will find more free articles and resources on forex trading. You can also subscribe for free to their monthly newsletter.

Questions You Need To Have Answered Before You Back-Test Your Forex System

5 Questions You Need To Have Answered Before You Back-Test Your Forex System

As 90-95% of new forex traders lose money within the first 3-6 months this article helps to guide new forex traders by asking 5 questions that the forex trader needs to know prior to back-testing their forex system.
Let us jump right in...
1. What data type are you using (or going to use)?
I know this sounds strange, especially if you have experience from another market such as stocks as their generally is only one type of data source available. However, in the forex market you can have up to 4 different data types: bid, ask, mid and indicative. Each have their own little nuances.
If you would like to know more about the data types then visit the article written about the perils of indicative prices. As this will save me from having to repeat the information again and boring those who've already read it.
So, if you know you have indicative prices then you know you're in for some good results! However, if you have any of the other three you need to be careful on how stop and limit orders are placed.
As an example: If we had bid price history and we were looking to place a buy entry stop at 0830 EST according to the day's high, then we know that the bid price will not accurately reflect what the actual price of our order should be. You would have noticed that if you placed a buy entry stop at the exact same price as that of the day's high you would have entered prematurely - you would have entered 4 or 5 pips before the high or the low of the day was touched (the exact same amount as the spread your broker offers!).
This leads me into the next most important question...
2. What spread is your broker offering on the currencies you are bask-testing?
You need to know this as this can help you set your slippage settings on each currency.
As our example in question 1 pointed out. We found that our buy at the day's high method did not exactly work because we bought at the BID PRICE high, not the ASK PRICE high - the price that we need when we place our order TO BUY.
Therefore, we enter in a slippage setting representing the spread that would be exhibited by this trade on this currency.
But knowing at what price to buy is only half the problem... how do we know what quantity to buy?
3. What margin does your broker offer?
If we know at what price to buy our currency at we need to inform our broker on what quantity to buy to fulfill the order. We only know what quantity to buy by the margin that the brokerage firm offers.
Most brokerage firms offer 100:1 leverage, however, some firms offer mini accounts with 200:1 leverage, others only 50:1 leverage.
Find out the margin required.
4. What restrictions does your broker impose?
Now, I don't just mean margin and spread restrictions as I have mentioned above. These are important in their own right, what you need to find out are the details.
This is probably the most important question of all as the fine line between success and failure can be found in the details. Now you can have this questioned by one of two ways: 1. You can find out through experience (generally the most expensive way unless done through the demo account!); or 2. You ask your broker (the cheapest and best way).
Why is this so important? I hear you ask. Well let's say you have a system that trades any gaps that might form on Sunday at 1700 EST, but your broker does not open until 1730 EST. You either need to factor this restriction in to your system, or move onto another system completely. Or, you may have a system that has 10 pip stops, but you find out that your broker will only let you place 15 pip stops from your initial entry price. Once again you will need to change your system to see whether it still performs well, or throw out your system (or change your broker)!
In fact one of the most devastating restrictions imposed by FXCM is that they do not accept stop entry orders if price never happens to trade at your entry stop price! FXCM will honor and "take the loss" of your OPEN stop positions, but if the liquidity is not there and price has shot straight through your stop price then you will miss out. This can have disastrous effects on your system results as you are left wondering on trades where you made good returns - "Would FXCM have got me in?". You may want to read of some of the quirks I use when placing entry stop orders on FXCM that could be of huge benefit to you to help you possibly get around this problem.
The restrictions by your broker are only half your systems' success, you also need to find out about another more important restriction... yourself. This leads me to the final point...
5. What restrictions do you have?
This is a vitally important question. Most people test their systems and fall in love with the results but find when they trade their system they have lost their account and that most of the best signals occurred while they were sound asleep!
As the forex market is a 24 hour market, you need to put into place restrictions in your system that will be realisticly conducted by you during the course of a normal trading day. There is no use operating a trailing stop method that changes your stop points during times when you are asleep and cannot possibly do so.
I hope this article has made you aware of some of the important things that need to be known prior to testing your system.
Article written by Ryan Sheehy from Currency Secrets.com. Where you will find reviews on forex data vendors, signal providers, brokers, and popular forex resources, along with more quality articles... all for f*ree!

what is forex trading

Forex Trading is trading currencies from different countries against each other. Forex is acronym of Foreign Archange.
For example, in Europe the currency in circulation is called the Euro (EUR) and in the United States the currency in circulation is called the US Dollar (USD). An example of a forex trade is to buy the Euro while simultaneously selling US Dollar. This is called going long on the EUR/USD.

How Does Forex Trading Work?

Forex trading is typically done through a broker or market maker. As a forex trader you can choose a currency pair that you expect to change in value and place a trade accordingly. For example, if you had purchased 1,000 Euros in January of 2005, it would have cost you around $1,200 USD. Throughout 2005 the Euro’s value vs. the U.S. Dollar’s value increased. At the end of the year 1,000 Euros was worth $1,300 U.S. Dollars. If you had chosen to end your trade at that point, you would have a $100 gain.
Forex trades can be placed through a broker or market maker. Orders can be placed with just a few clicks and the broker then passes the order along to a partner in the Interbank Market to fill your position. When you close your trade, the broker closes the position on the Interbank Market and credits your account with the loss or gain. This can all happen literally within a few seconds.