YodZiaN

One of your department heads looks at you and asks ?Ishiwhat?? ?You know,? you reply, ?a fishbone diagram.? Still blank stares. ?Cause and effect?? you say as you scribble out a trout carcass on your white board. Still nothing. You?re starting to think the elevator doesn?t go all the way to the top. You?ve got your work cut out for you. So you decide to punt. ?Ok, let?s just start with the Pareto charts,? you concede. ?Sir, what is a potato chart?? asks another supervisor. ?Let?s take a five minute stretch break and then meet back in here so that I can welcome you to the world of Pareto charts.

A Pareto chart looks similar to a bar chart. It has columns and it also has a line graph. Generally number of occurrences (frequency) is listed on the left side and percentage on the right. This type of chart is used to graphically summarize and display the relative importance of the differences between groups of data. For example, perhaps you have determined, or at least speculate that your widgets are being rejected due to ? improper fittings, defective sorting machine, too large or too small, or other. If you look at the reports or studies and gather data on each of these reasons for failure, you can then plug the numbers into a chart. You may have assumed the reason for rejection was because the widgets were too large to fit through the tunnel. However your numbers may actually show (the data will validate) that indeed there was nothing wrong with the size of the widget, but rather the sorter was bent, thereby causing the good pieces to bounce into the reject bin.

Typically you isolate five categories to measure. A Pareto chart can be constructed by separating the data into categories. Let?s look at another example. If your business was investigating the delay associated with processing mortgage applications, you could group the data into the following categories: No signature, address not valid, illegible handwriting, existing customer and other.

The left-side vertical axis of the Pareto chart is labeled Frequency (the number of counts for each category), the right-side vertical axis of the Pareto chart is the cumulative percentage, and the horizontal axis of the Read more…

OK, in our last installment I showed you how a sample of a Forex trading system with a high percentage of winning trades could still be a losing system overall.

The whole point of the exercise was to get you to take a closer look at the performance results of trading systems that you are interested in pursuing. Now that you know that it is possible to lose money trading a system with over 90% winners, you?ll be able to look at the next advertisement for a Forex trading system much more objectively.

Let?s take another look at our example:

Trading System A Performance

Number of trades = 1000
% of Winning trades = 92%
% of Losing trades = 8%
Average Winning trade = $180
Average Losing Trade = -$2100

A few quick calculations tells us that this trading system had Total Net Profit of -$2,400

The Total Net Profit is an important factor in any trading system although it doesn?t tell the full story.

Here?s how the Total Net Profit is calculated:

Total Net Profit = Gross Profit ? Gross Loss

In our example above these figures would be:

$165,600 ? $168,000 = -$2,400

As stated above the Total Net Profit for this trading system is negative. This is important to note. As you can see, if the only information you originally had Read more…

As you ponder how to balance your forex portfolio, it is important to map out sure-fire strategies beforehand.

With your plan, you optimize your reward with respect to the expected risk, and tweak probabilities to your favor. Forex strategies must be disciplined and limit risk; simultaneously, it positions you at the most favorable advantage in the market.

A beginner?s strategy is the fundamental Moving Away Average, which is draws predictions from technical study over 12 periods, with each period 15 minutes in length. Trading decisions based on the MAA technique considers historical data to arrive at relatively safe predictions.

We use a simple algorithm for MAA. When currency price crosses above the twelfth period, simply move away it is a signal to stop and reverse. In this way a long position will be liquidated and a short position will be established, both using market orders. This system keeps trades constantly active in the market, with either a short position or a long position after the first signal. Risk is minimized.

Intermediate level strategy calls for analysis of support and resistance levels. The market likes to trade above support levels and trade below resistance levels. If either a support or a resistance level is broken, then the market follows through in the direction given. These breakpoints can be determined by analysis of the chart and assessment of where the chart has encountered unbroken support or resistance in times past. Identify these critical points and you can ascertain periods when you plan to open or close a position.

An advanced tactic that many consider exotic is the balloon strategy. The Balloon is an option that balloons, or increases in size when triggers are breached. Take the case of an investor who predicts that the dollar will gain strength against the Euro in the near future and is currently trading at one hundred, the investor will see one hundred ten as having strong resistance, but he also believes it will be broken.

Now, rather than buying straight US dollars at one hundred for the next six months the investor will purchase at ?at the money? balloon call with a One Hundred Ten trigger and multiple of two. The investor then acquires a One Hundred Ten call in USD110mm. However if the dollar and Euro ever trade at or above one hundred ten, the 110 call will double to USD 20mm.

A day trader at heart? The Double Bottom is definitely for you. Significant to the short term trader, the double bottoms indicate a possible major change in currency sentiment and indicates a shifting trend. The pattern is used on all times frames, and many compelling intraday and long term bull markets are identified Read more…

In the first part of our series ? Choosing A Forex Trading System ? Part1 we covered a few quick tips to get you a few steps closer to choosing the Forex trading system that?s right for you.

In Part2 we will take a look at a few other do?s and don?ts for choosing a Forex trading system. With that in mind here is ?don?t? number 1.

1) Don?t be overly impressed by a high percentage of winning trades

Often times you will see Forex trading systems advertising a high winning trade percentage. The ad might contain information a line like the following:
?Over 90% Winning Trades?

You might look at that and say, ?Wow, with numbers like that I?ll be rich in no time!?
Before you stop reading the ad to call your local real estate broker about buying that private island just realize that this one figure does not tell the whole story.

The fact is that most successful traders the world over have made their money with far smaller percentages of winners than many of the trading systems you will see advertised.

I would suspect that the reason the high winning percentages are advertised is to attract as many customers as possible. Many buyers believe that the closer the winning percentage is to 100% the closer the trading system is to being a ?sure thing?. In Read more…

In our last installment we discussed the super-important performance measure called maximum drawdown. Today I have another measure who?s importance may not be immediately obvious to you. That measure is the actual length of time over which the trading systems results were achieved. Some of you may identify this as the length of the trading system?s track record.

Why is this so important? The main reason that this is so important is that the shorter the track record of the trading system is the less significant the track record may be. A trading system with a short track record may be only cherry picking and displaying the best possible period of trading. Don?t be impressed by some wording like ?made 10% return this month??so what. In my personal best month of trading I made hundreds of times more than the above example of 10%…again, so what. In trading, as in life, there are many things that are a flash in the pan?trading systems, get-rich-quick traders, etc.

Fortunately, you and I realize that success in trading is a marathon and not a sprint as so many would love for it to be. Your trading system needs to be one that at least displays the ability to weather the long-term storm. As Read more…

The foreign exchange market, or forex, being the largest financial market in the World has been the domain of government central banks as well as for commercial and investment banks in a scandalous manner and it exists wherever one currency is traded for another. But recently more numbers of individuals are handling the forex market as it offers trading 24-hours a day, five days a week, and the daily dollar volume of currencies traded in the currency market that exceeds $1.9 trillion daily, making it the largest liquid market in the world.

“Foreign Exchange” is the place where the money of one nation is traded with the other nation. The most popular pair of exchange in the forex market is “Euro Dollar”. You can view these pairs in all forex display screens as “EUR/USD”. Forex trading strategies are the key to triumphant forex trading or online currency trading. The management team of One World Capital Group bid proficiency in both Forex trading and internet technologies and proven track records that deals with large, global trading and brokerage operations as well. Forex made easy is as simple as you would want it to be.

Forex trading is different from trading in stocks entirely and it uses Forex trading strategies that will give you lot of advantages as well as help you to comprehend greater profits in the short term. There are wide ranges of forex trading strategies that are available to investors. It is one of the most useful of these forex trading strategies called as leverage. Knowledge of these Forex trading strategies can imply the difference between profits along with a loss and so it is essential that you fully grasp the Read more…

With all the advances in technology over the past number of years online trading has become one of the most popular ways to trade. Now you can trade from home, from work, and even while on the road.

Access To Information

One of the nicest things about online trading is that you have instant access to market information that you can get from just about anywhere in the world…as long as there?s an internet connection available.

You can grab quotes, pull up charts of your favorite markets, and much more. One of my favorite features is to be able to see my account balance in real-time. If you have positions on at the time you can also see your position profit or loss in real-time. This allows you to know where you stand at a glance. Use this feature sparingly as it?s easy to get addicted to watching these changes on your computer screen.

Parked Orders

This is another feature that you?ll fall in love with. With many online trading platforms you are able to ?park? orders. This simply means that you can store orders within your online trading platform for future use.

Simulated Trading

Many online trading platforms have the ability to allow you to ?simulate? real trading. This Read more…

You can develop into a better and more profitable trader by applying some of the more imperative forex currency trading rules consistently with an appropriate amount of discipline. There are few principles that can help to perk up your chances of success if they are understood, practiced, and implemented in your trading on a regular basis and these rules have been learned in the trenches, mostly through testing and scrutinizing the common mistakes nearly every trader makes when starting out in the forex currency trading business. The first step is to set up and apply specific goals and objectives.

The majority of forex traders who often find themselves on the losing end of a trade make the same common and recurring mistakes. Most forex traders don’t have a clear direction, never take the time to develop a sound business plan and lack a formal written strategy for putting a well thought out plan in place. In forex currency trading, the primary goal is clearly to make money, but it’s important to have goals that are not strictly money related as well. Your personal objectives and ambitions should be very specific and measurable to you, but they should include the characteristics that are needed for the trading.

Having a clear-cut idea of what you want to accomplish in your trading and the precise time frame you want to achieve it, make your efforts more focused. In order to establish a track record of winning trades, you need to develop discipline and a personal forex currency trading system that makes sense for you. The spread generally referred to as the bid/ask spread is what brokers charge instead commission fees. Forex brokers are typically Read more…

Forex trading has one goal: to make money. Unfortunately, like any speculative venture, there is a potential for loosing money. The same holds true with the stock market the commodities market, and the money market. Any investment that entices of great gain poses a certain level of risk. As a forex trader you want to minimize your chance of risk. Observe the following Best Practices:

? Stay informed. Peruse the current events magazines and political journals. Know how the global political and social landscapes have been shifting.

? Brush up on economics. A college refresher course can keep you out of the red. Journals by economists like John Maynard Keyes, Kenneth Galbraith and Walter Williams can help you guesstimate potential forex uptrends.

? Read periodicals like the Asian Wall Street Journal and Business Investors Daily.

? Fire up a practice demo account and get a feel of the game before jumping into the market.

? Befriend a broker you trust.

? Cultivate friendships with other traders into active trading.

? Understand historical trends and their impact on the charts.

? Take a short course on forex trading to get your skills up to speed.
These cost under $200 and can help you avoid $20000 losses

? Research forex on the Internet. Forums provide great sources of information

? And Read more…

Test-driving an online forex demo account is the preferred method of potential traders to minimize risk. A demo account readily allows a cautious person to go online and observe exactly how a paid account would work. Think of it like playing the popular wargame Command and Conquer: you send in the troops (gobs of fictitious money), make a few tactical maneuvers (invest in speculative exchanges) and conquer territories (reap profit).

It can be addictive. Without investing and risking any real money, the investor plays with ghost money in an account and initiates buys and sells the same way it would be done in reality. The software used for these demo accounts parallels what the real trading platform does. Real figures are pulled from exchanges, trend charts are generated, and profits are calculated from buy/sell maneuvers., A trader sees at the end of the day the net loss or gain should real money had been used in the transactions.

Even a novice can trade. Let?s assume an investor pretends to open a margin account with ten thousand dollars. He watches trends in the currency markets and believes that the dollar will go up in value against the British pound. The demo software empowers him to purchase at a ten to one margin; he then authorizes a buy of one hundred thousand dollars of dollars and sells one hundred thousand dollars of Pounds. There will be a spread, or difference, which accumulates to the gains, or ?profit?.

Why invest time with demo accounts? Simple. It?s safe to learn the currency trade without having real money to lose.

Think of it like crashing your car in driving simulators or doing crazy rolls in an F-14 – on a Playstation. You stretch your creativity, test your reflexes and build your skills all behind the safety of a highly immersive computer screen. Your mind gets a full reflex workout without incurring damage to property and incurring lawsuits!

The same holds true for forex trading. Spending time with a demo account allows the potential trader to gain skills and learn the ins and outs of the game and the market place. A person is then able to see if they truly have the instincts necessary for the market and have sufficient knowledge to ?play with the big boys.?

Almost all online companies involved in forex trading offer demo accounts, sometimes free and sometimes for a small fee. Even if a fee is paid, it is usually worth it because a forex trader can flex his skills and knowledge for vast profits after spending some time practicing with the forex demo software.

Setting up a demo account requires nothing more than a valid email address and your name. Upon activation, you will Read more…