Once you know why you want to trade then you can set weekly and monthly goals.
This will automatically set you annual goals. It is easy to get caught up in making
winning trades that you forget why you started to trade. This will also help you
chose your trading style.

Maybe your goals include having some free time. Then you might say I will only
trade between two set times and only trade 3-4 days a week. Maybe you want to have
an extra $100,000 when it comes time to retire. Then you need to figure out how many
years you have until retirement then how much you need each year then month then day.
This will keep you focused on what you are trying to accomplish by trading the currency
market.

If you want to make a lot of money, then you need to figure out what a lot of money is.
Your target needs to be specific and measurable. Otherwise you are just spending time
on an expensive hobby. It needs to be broken down into bite size chunks and reviewed
on a regular basis.

If you do not have enough starting capital to reach your goal then you need to change
your goal or earn some more investment capital.

This is just an idea on how to stay focused on the right thing, and that is to
make money.

Your site looks great and seems very informative. I was wondering what the difference is between
the Jump Start and Launch pad system that costs money? I’m sure there is value in spending the
money on the system, I am just looking for some more details. Also, can you map out an average
day for yourself using the system, times and such?

Answer:

Here are the differences

JUMP START

How to use two confirming indicators
How to trade with indicator signals not price movement
How to do Simulated trading
Learn how to trade with Indicators so you can trade all of the currency pairs.

LAUNCH PAD

How to do demo trading
How to trade in multiple time frames
How to take more profits per trade
Learn where to set a stop loss
Learn How to Identify a trend
Learn how to trade in the present not in the past trying to predict the future
How to spot break out moves and how to trade them
How to trade a side ways market
Get additional entry signals
Get additional Exit signals
How to deal with their emotions, greed, and pocket book
How to trade the NEWS in relation to the trend
Money Management
How many lots to trade with
When to start trading live
How to use multiple signals
Indicators
time Frames
How much information to analyze
Candlestick movement
Learn New trading Patterns
How to create a trade journal that works if you use it.
Get trade journal sheets with instruction of how to fill them out
How to print out the details of the trade
How to spot trading strengths and weaknesses
Do all of the above in small amount of time
Risk Management
How to group currency pairs to save time and find more trades
How to make a trading plan and why
Learn how to do visualization trading
Learn how to trade by spending less time in front of the computer

JS is a strategy to teach people to enter the market using indicators. LP is a complete
trading system for beginners. Some traders say they do not need anything else; others
would like to have our advanced product Nth Degree.

I trade mostly with the 4-hr 1-hr and 30-min time frames. I start looking at the market
at 6:00 am Mountain, 8:00 am Eastern. I will also Iook at the market again around 5 pm
to 6 pm Mountain, 7 pm to 8 pm Eastern.

I look for the trend or a change in anyone of the indicators on the 4-hour charts on 6
to 10 currency pairs. I use our alert program and let it monitor the charts on all the
time frames. When the alerts give me a signal I check the trend or change of an indicator
on the 4-hour and 1-hour charts, then I go to a smaller time frame or the time frame that
I received the alert and look for a 4 or 5 alarm trade

If there is not much happening by 9 – 10 am then I will go do other things away from the
computer. Some days I do not trade other days there are plenty of moves so I trade for
a longer time. While I am waiting for an alert to go off I do emails, write posts and
do correspondents.

By using our alerts I have all the trades I can handle. This makes it possible for me
to spend less time in front of the computer. I can trade when I have time, I don’t
have to waiting for the market to have a big announcement to trade.

Sometimes I trade the smaller time frames if there is nothing happening on the larger
time frames. I use the15-minute time frame to get the short-term trend and enter in
the direction of the trend when I see a 5 alarm trade on the 5-minute charts for a
quick 5 to 20 pips.

The same technique a trader uses on the larger time frames is used on the smaller
time frames. The size of the trade has to be adjusted. For the Larger time frames
expect larger numbers of pips per trade. For the smaller time frames expect smaller
numbers of pips per trade. Just look for the trend on the largest time frame you are
trading with and then enter on a 5-alarm entry signal on the smaller time frame you
are using during each trading session.

Before we developed the alert I would look at the computer every 30 min to see what
was happening.

I hope this helps.

Kirk

1. Use a stop Loss
2. Only trading a small set % or your account 1%, 2%, 3%, 5% on any one trade
3. Only trading a total amount of your account at any one time. 5%, 10% … your choice
4. Keeping the Margin level % above 1000%
    (you chose the level of coverage you want)
5. If your Margin Level % drops down to 500% close all of your open trades.
6. Take the total amount you have for trading and put ½ in a savings account
 then put the other ½ in you trading account.  This way you will have some
 money to trade with if you lose you trading account.
7. Never add money to your account to cover a margin call.
8. If your account has a draw down of 10% you stop trading until you figure out
 what you are doing wrong, or what you have changed from when you were making money.
 

 How much starting capital do I need to trade with (can I start with a small amount and work my way up)?

Answer:

There are several schools of thought on this.  Some say you have to have at least $10,000 to start and it would be better if you have over $25,000.  You should trade with a certain number of lots or you will not make it. 

Not everyone has a large amount of investment capital to start with.  We take a different approach when someone first starts out.  The main objective when starting out is to learn how to trade and develope the skill set of a good trader.  So you can start out with only a dream and a desire, get a part time job earn the initial investment capital.  This will do at least two things. 1.  get you the money to start trading  2.  Help to develpe the discipline needed to be a good trader.  If you do have some investment capital, no matter the amount, you need to only trade a small percentage of that money.  We suggest not to trade with any more than 5% of your account on any one trade and not more than 10% at any one time.  Sometimes it is better to start out with 1% or 2% per trade and no more than 5% at any one time.  This way you can start trading, learning and developing the skills to become a good trader. 

Do not worry about making money in the beginning be concerned about not losing money.   Once you get the skills the money will come.  You can also find other ways to earn money and add to your account so you have enough in the account to make a living

Now how much starting capital do you need.  You can start out as small as you would like there are brokers that have no minimums on the amount you can start trading with.  Yes you can work your way up.  It does take time and discipline.

Market Structure:

Now that we have established why the market exists, let’s take a look at how the transactions are facilitated:

The top tier of the Forex market is transacted on what is collectively known as the Interbank. Contrary to popular belief the Interbank is not an exchange; it is a collection of communication agreements between the world’s largest money center banks.

To understand the structure of the Interbank market, it may be easier to grasp by way of analogy. Consider that in an office (or maybe even someone’s home) there are multiple computers connected via a network cable. Each computer operates independently of the others until it needs a resource that another computer possesses. At that point it will contact the other computer and request access to the necessary resource. If the computer is working properly and its owner has given the requestor authorization to do so, the resource can be accessed and the initiating computers request can be fulfilled. By substituting computers for banks and resources for currency, you can easily grasp the relationships that exist on the Interbank.

Anyone who has ever tried to find resources on a computer network without a server can appreciate how difficult it can be to keep track of who has what resources. The same issue exists on the Interbank market with regard to prices and currency inventory. A bank in Singapore may only rarely transact business with a company that needs to exchange some Brazilian Real and it can be very difficult to establish what a proper exchange rate should be. It is for this purpose that EBS and Reuters (hereafter EBS) established their services.

Layered on top (in a manner of speaking) of the Interbank communication links, the EBS service enables banks to see how much and at what prices all the Interbank members are willing to transact. Pains should be taken to express that EBS is not a market or a market maker; it is an application used to see bids and offers from the various banks.

The second tier of the market exists essential within each bank. By calling your local Bank of America branch you can exchange any foreign currency you would like. More then likely they will just move some excess currency from one branch to another. Since this is a micro-exchange with a single counterparty, you are basically at their mercy as to what exchange rate they will quote you. Your choice is to accept their offer or shop a different bank. Everyone who trades the forex market should visit their bank at least once to get a few quotes. It would be very enlightening to see how lucrative these transactions really are.

Branching off of this second tier is the third tier retail market. When brokers like Oanda, Forex.com, FXCM, etc. desire to establish a retail operation the first thing they need is a liquidity provider. Nine in ten of these brokers will sign an agreement with just one bank. This bank will agree to provide liquidity if and only if they can hedge it on EBS inclusive of their desired spread. Because the volume will be significantly higher a single bank patron will transact, the spreads will be much more competitive. By no means should it be expected these tier 3 providers will be quoted precisely what exists on the Interbank. Remember the bank is in the business of collecting spreads and no agreement is going to suspend that priority.

Retail forex is almost akin to running a casino. The majority of its participants have zero understanding how to trade effectively and as a result are consistent losers. The spread system combined with a standard probability distribution of returns gives the broker a built in house advantage of a few percentage points. As a result, they have all built internal order matching systems that play one loser off against a winner and collect the spread. On the occasions when disequilibrium exists within the internal order book, the broker hedges any exposure with their tier 2 liquidity provider.

As bad as this may sound, there are some significant advantages for speculators that deal with them. Because it is an internal order book, many features can be provided which are otherwise unavailable through other means. Non-standard contract sizes, high leverage on tiny account balances, and the ability to transact in a commission free environment are just a few of them…

An ECN operates similar to a Tier 2 bank, but still exists on the third tier. An ECN will generally establish agreements with several tier 2 banks for liquidity. However instead of matching orders internally, it will just pass through the quotes from the banks, as is, to be traded on. It’s sort of an EBS for little guys. There are many advantages to the model, but it is still not the Interbank. The banks are going to make their spread or their not go to waste their time. Depending on the bank this will take the form of price shading or widened spreads depending on market conditions. The ECN, for its trouble, collects a commission on each transaction.

Aside from the commission factor, there are some other disadvantages a speculator should consider before making the leap to an ECN. Most offer much lower leverage and only allow full lot transactions. During certain market conditions, the banks may also pull their liquidity leaving traders without an opportunity to enter or exit positions at their desired price

If you have ever been around or seen manufacturing you know that the machines do the same thing all day long over and over again.  Each machine is good at what it does and if you ask a filling machine to put on the lid or make a cut it does not work. Traders are good at certain things.  Find out what you are good at and keep doing it over and over again.  Day after day trade after trade.  Have you ever watched a bricklayer? They shows up for work every day of their working life and executes with the same methodology. Brick by brick by brick.  The same consistency applies to traders, as well.

Make a little bit everyday.  Make a pile of money.  Don’t and make a money pit.

When you can do this illustration in a demo account then start trading live.

Lets take a $1000 account for example:

Make $5 a day for 250 days a year = $1250      .005% per day
Make $10 a day for 250 days a year = $2500    .01% per day
Make $15 a day for 250 days a year = $3750    .015% per day
Make $20 a day for 250 days a year = $5000    .02% per day

Now get a part time job on weekends where you can net $40 per week.  52×40= $2080
Save the $2000 and put it in your trading account in a lump sum at the end of the year so now you start with:

$3250 $16.25 a day for 250 days a year = $4062.50 + $3250 = $7312
$4500 $45.00 a day for 250 days a year = $11250.00 + $4500 = $15750
$5750 $86.25 a day for 250 days a year = $21562.50 + 5750 =  $27312.50
$7000 $140.00 a day for 250 days a year = $35000 + $7000 = $42000

It is amazing how quickly your trading account will build up over time just by making a little bit every day.

If you can do the trading part of this illustration after 2 years you will be making more money than the example.  More important than the money you will have developed the trading skills and discipline to be on your way to becoming a great trader.  The discipline comes from following your rules, applying consistent effort toward a predetermined goal.

We get a lot of questions and comments about what this means.  You should know by now that you will lose sometimes when trading.  That does not mean you will lose all of your account unless you use poor money management techniques or none at all.  It means don’t get all emotional about a loss they are going to happen and the sooner you can get over it and move on the faster you will become a good trader. Accept the fact that you are going to have losing trades throughout the day or week. Get out of your losers quickly. Love to get out of your losers quickly. It will save you a lot of trading capital and will make you a much better trader.

I have never met a successful speculator. It is impossible to speculate and consistently have large wins. Don’t be a speculator. Be a trader.

Trading in the direction of the trend on a 1 hr or 4 hr chart is always a good way to trade.  Use good money management techniques with proper stop loss settings and you will be way ahead of the speculators.  Most traders that do scalping are not profitable.  There are some that can do it but they learned at great expense.

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Don’t worry about the news by the time you read it, it is history. Early in my trading career I was told to not listen to and TV or radio financial news.  Stop reading Magazines, and newspapers about the financial markets.  Learn to trade with what the market is give.  Trade with what the market is doing right now.  I have never understood why so many electronic traders listen to or watch CNBC, MSNBC, Bloomberg News or FNN all day long.  The people reporting the financial news on these programs know very little about market dynamics and market price action.  Yet they claim to be experts on everything.  Treat the news and the reporting of the news for what it really is.. Entertainment. When you hear the news it is already old news.  The story has already been dissected and consumed by the professional market participants long before the news has been disseminated. Do not trade off of the reporting. It’s too late.