Making a Fortune with FOREX

[Rodehard]

ÿØÿà JFIF – – ÿþ ¬LEAD Technologies Inc. V1.01 ÿÛ „

[Sincerelee]

I spoke with two men I respect greatly on their opinion of Forex. They have studied it and understand it quite well. One is of the opinion that it is too complicated for him to pursue. The other is unsure of the stability and that is why he is playing it safer by playing stocks and commodities.

Given the huge potential for loss, I will hold off investing in Forex until I understand it more. I am currently working on getting financially stable, and using the market to take advantage of some excess income, to build a better financial situation. As I progress in that and make it part of my financial lifestyle, I will pursue Forex with the newer additional income.

One thing that sets me apart from the average investor is that I do not have uncrontrolled greed. I like making a profit on my investments. But, where some are deluded by higher potentials, thinking they can out-guess the market, I set a goal for gain, when it is reached, i sell and invest in something else.

While this strategy means I won't be floating along the Riviera as soon as some high risk brokers. It also means I am not starving in a hope of one more dollar. It also means once I get the ship on the Riviera, it won't be sinking from a market failure.

[Rodehard]

ÿØÿà JFIF – – ÿþ ¬LEAD Technologies Inc. V1.01 ÿÛ „

[Sincerelee]

Similarly, I have a goal of how much I want to make. It is 4 times what I would need to make to live off 5% interest per year at a level that is twice my current standard of living.

That is, say I make $100K right now. 2X = $200K X 20(5%) = $4mill X 4 =$16mill. This is all to not interrupt my way of life, and at the same time freeing up much of my time to pursue the desires of my heart.

The sooner I make that amount, the more I can enjoy life.

Do you have any book recommendations that can get me some basic knowledge so I could get started?

[Rodehard]

ÿØÿà JFIF – – ÿþ ¬LEAD Technologies Inc. V1.01 ÿÛ „

[Valinn]

Ok, so im new to the whole stock market/forex trading deal. I was shown this post by my wing man and he explained enthusiastically about how much money you, Rodehard, were able to make with little as $300 dollars investment (the post where your daughter was able to turn $300 into thousands). Right now Im currently a 21yr old, unemployed college junior with about $300 to my name. So im looking for anything to help out my finacial position

So i started to do a little research of my own. I bought two books already, Forex made Easy and Currency Trading for Dummies, and have read into both of them a little bit. I have also already opened a trial account on Forex.com. Which i spent a little bit of time on there with the EUR/USD and made a $29 profit of a $200,000 position(Im still a little overwhelmed by the amount of information on there). I think I've been able to come up with a pretty basic understanding of how this works with the few hours I spent on it this morning (about an hour and a half reading plus a little under two hours with the trial account). But i have a few questions that i would like to clarify before I invest any of my own money into this. (and i do realize it takes months, if not years to get a good understanding and feeling for how the market works)

1. Leverage - I see the leverage ratios on Forex.com are 50:1, 100:1, and 200:1. Keeping it simple, i will invest $25 at 100:1, that means i control a position size of $2500, say for example in EUR/USD, which is what i invested in this morning (around the time period of 9:50am to 11:45am). That being said, with leverage, if i invest $25 at 100:1, do I make the profit off of the $2500 position if the exchange rate increases or does the profit reflect back to the $25 initial investment? Ill use what happened this morning. I bought in when the exchange of the EUR/USD was 1.39775. I watch until it increased to 1.40430, so that would be a move of +65.5pips. I tried to close out, but i think i made a mistake by switching the position from buy to sell. If this is the case, can you explain how to get out of or "close out" of the deal? Also, on the flip side, If I made a wrong move and the exchange starts to drop, will i lose a possible $2500 off of a $25 investment if there is no stop loss in place since i control a $2500 position?

2 Stop Loss - I get the basic idea that this function is to stop you from losing money just by the name. But my question is, Do you place the stop loss at a percentage of your initial investment($25), or place the stop loss at a certain percentage of the position size($2500)? Also, if the exchange rate is dropping drastically, will the stop loss still pull me out at the given value, or will i not be pulled out until the rate stabilizes to pull me out no matter the amount lost?

Thank you for your time, Valinn

[Rodehard]

Leverage: Since you opened with $300 the only position you can use is the mini positions, 200:1 where each pip is worth $1.00. It takes around $70.00 margin to control one mini EURO/USD. Since I use a max of 30 to 40 %of my account balance to trade the mini I divide the margin by .3 and then divide my account balance by that number. So the margin is $70.00 and I want to use 30% of my account $70/.3 = $233.00 I want to have for each position. With $300. I would never take more than 1 position. This limits the amount I can loose. Since I would be trading the mini EURO/USD each pip is $1.00.
If the market rallies 65 pips, I will make $65.00. Since I had $300.00 in the account, my return on investment is 22%. For what it is worth the trailing stop (see below) produced a $220.00 profit on the last 1.3977 move before the stop loss triggered. There were 5 such moves last week. I caught 3 between Sunday night and Tuesday night. Once you get the hang of this you can set it up to text you when a trade you have planned is ready to take off.

Do you place the stop loss at a percentage of your initial investment…..
I use a 2 bar low trailing stop. That means if I am short EURO/USD s, i.e. betting the dollar will rally, (the quote you see on FOREX. Com goes down) I will place a stop loss at the highest high of the last 2 bars. So if the last two bars are 1.4100, and 1.4011 and I short at 1.4090, I will get stopped out it the quote goes over 1.4011. If I am long the EURO/USD I will place the stop at the lowest low of the last 2 bars. I use candle stick bars as they are easier to read. I also limit the loss I am willing to take to 40% of my position and never use more than 30 to 40% of my account. In effect this means I the most I can ever loose is 12% of what I have invested. Since when I am right I pick up 100 to 200 pips, it takes 8 times being wrong to loose the profit from 1 right trade. Since I step off for a few bars after 3 wrong in a row, I never have a loosing month, or week.

Also there is a tab on the left side of the screen called Forex Insider, keep an eye on the news. There have been many times when I was long (or short) and raking in the money when an article would pop up in Forex insider saying that there was going to be a reversal around 1.xxxx. In these cases ‘liquidate the trade as soon as it hits 1.xxxx. At the top of the screen there is a tab for research which will open an web page with the strength and resistance quotes, momentum indicators, and notes. That is also very helpful. NEVER bet against the trend.


If this is the case, can you explain how to get out of or "close out" of the deal? In the upper left hand corner of the quote screen there is a tab for open positions. Click that and you will see all your open positions. Double click the position you want to close out. A pop will open. In that window there is a link that says “liquidate position” click it and then click yes in the next window. Also as soon as you place the trade, you can place a “trailing stop” in the same way. Lear to think of them as one inseparable thing you NEVER place a trade without placing a stop loss at the moment you get filled.

[Satisfaction]

Would you recommend using a decision support system such as forex automoney to give the "right" buy/sell signals and invest $99/month into their membership or rather recommend studying forex trading and then trading based on own calculations and understanding? I'd like to get into forex trading, have a master's degree in finance & investments giving me a baseline understanding of trading, but I also work 60 hours a week as management consultant. I wonder if I have enough time to make forex trading profitable for myself.

Thanks for your advice!

Satisfaction

[Sincerelee]

Once you learn limits and stop losses, it reduces the amount of time you need to dedicate to it.

[Rodehard]

Originally Posted by Satisfaction

Would you recommend using a decision support system such as forex automoney I wonder if I have enough time to make forex trading profitable for myself. Satisfaction

Would you recommend using a decision support system such as forex automoney

I never use anyone Else's cues for getting into or out of a trade. There are many reasons for this, but the most important is I am giving someone else control over my money. Your money would be better spent reading about FOREX trading, and learning to me a master it then building your own system.

I wonder if I have enough time to make forex trading profitable for myself.

I started trading when I was a full time student and single day i.e., 170 hours a week. The cool thing is in a short time I had enough money that I could graduate and not have to work.

One thing you want to focus on is the outcome... would you rather work really hard for a couple years then retire or work really hard and retire in 50 years. My brother asked me what the most important thing I ever got for my money was. I told him 25 years. I got to retire 25 years earlier than anyone I know or have met.