best forex trading robots reviews

As we turn into the New Year it’s a good time to make changes and take action – if you are trader who is not doing well or a potential trader then these 2 tips will help you make money fast not just in 2008 but at anytime and they should be a cornerstone of your forex education.

The first point I want to make needs serious thought 95% of traders lose money not because they can’t learn forex trading (anyone can) but because they believe certain myths and commonly accepted wisdoms that are wrong.

The tips below are not conventional but don’t let that worry you the bulk of traders don’t make money so being in the minority is good so here are your 3 tips

1. Be Patient Trade Less

Many traders think the more they trade the more they will win but this is simply not true in forex trading in fact the opposite is true – the more you trade the greater the chances are you will lose.

You don’t get paid for the effort or amount of trades you make – you get paid for being RIGHT that’s it. I know traders who trade every day and make nothing and others who trade a few times a year and make over 100% annualized gains!

The majority of novice traders believe the day trade and make money myth and that’s all it is a myth. Day traders don’t make money period.

If you don’t believe me, try and find a real track record on a day trading system and you will be looking for ever. You have to catch the big high odds moves and they can ONLY be spotted by looking at longer term data and data within a day is meaningless.

If you like the buzz of trading you will lose – if you are patient and wait for high odds trades you will win.

2. Diversification

You will have heard it countless times diversify; don’t put all your eggs in one basket etc. On a small account of $1,000 or less you don’t have enough to diversify and make big gains at the same time.

All diversification does is dilute gains – wait for the big moves and load them up with as much as you can afford.

3. Take Bigger Risks

You will hear many give you the advice of only risking a maximum of 2% on a trade – well on 1,000.00 that’s $20 you won’t make much doing that!

Wait for the good trades and load them and risk up to 20% on a small account.

You can only diversify and risk less per trade if you have enough cash and that’s $10,000 + if you don’t you need to risk more – period!

4. Have Courage

Learn to accept big gains!

Hang on you may say all traders can do that because that’s why their trading currencies.

They are – but they don’t understand accepting a big gain is harder than taking a loss.

Why?

Because as soon as a trader sees a profit he wants to take it and the bigger it becomes the harder the temptation is to resist. As open equity swings keep eating his open profit it becomes too much and he snatches a mediocre or minor gain.

What happens next? The trade goes on to make 10,000 20,000 or more and he’s not in.

If you want to make money you need to have courage and accept that open equity will eat into your profits and have confidence to hold for a bigger longer term gain.

If you want to make more money from your forex trading and you are starting off with a small account make the above part of your forex education and you will see your profits increase dramatically.

The US dollar was the big story in 2007 ? if you were selling it. Compared to 2001, the value of the dollar has gone down by 40 percent against the euro. And values at the beginning compared to the ending of 2007 were significantly down: the dollar was down about 13 percent versus the euro, 10 percent versus the yen, and 8.5 percent versus the pound sterling. Its value was at such a record low that supermodels and popular rappers made public their preference for getting paid in Euro, no dollars, please. The US dollar did stop skidding towards the end of 2007, but the question now becomes: has the dollar bottomed out or will the slide continue in 2008?

Why the Dollar Weakened in 2007

The dollar seemed so weak in 2007 because the rest of the global economy continued to grow even as US growth stalled, due in part to steady demand from the Middle East, China and India markets. Countries acted more independently, as illustrated by the Australian central bank?s decision to increase rates to stave off inflation at precisely the time the US Federal Reserve was cutting interest rates. Before December in fact, interest rate cuts happened only in the US. In short, some sort of decoupling occurred in the global economy, and this was a key factor to the strengthening of the other currencies and the weakening of the US dollar.

There are signs, as we begin 2008, that the phenomenon will no longer obtain this year and the global economy will again move more closely in step. In the latter half of 2007, economic growth in the UK and Canada slowed down indicating that the two countries were being weighed down by the weak US economy. In addition, the shock waves of the US subprime mortgage crisis have also shaken the financial markets of many countries, particularly the UK, where growth in the past years has depended on housing, mortgages, and the public sector. There are also signs of strain in the Eurozone, notwithstanding the ECB?s hawkish position on monetary policy. The pressure to reduce rates will increase if growth continues to weaken further in the US or in other countries. The pressure already forced the UK Bank of England to cut rates in December and more cuts are forecast for 2008.

Interest rate cuts will be the thing to watch in the currency market. The US Fed has already lowered interest rates 100bp in 2006 and another reduction will be more in line with expectations; but if the Eurozone begins to lower rates, this would be a significant departure from current policy, which could signal a major change in the outlook for the euro.

Where US Economy Is Going

The big question is whether or not the US economy is going into a recession, which would seriously impact global growth. Majority of the American public thinks the economy is already in recession, according to polls released in December. Public perceptions notwithstanding, economists think otherwise. A Business Week survey on 54 economists in December showed that the group believes the country will reflect a 2.1 percent growth by the end of 2008 (it registered 2.6 percent growth in 2007). They believe that although the first half of 2008 will be difficult, consumer spending will not stop, albeit more restrained. Fundamentally, the forecast of no recession rests on the assumption that the Federal Reserve will continue its round of rate cuts. Although financial losses in the subprime sector will continue, consumer confidence will depend largely on the Federal Reserves actions to support economic recovery.

What Rate Cuts Can Be Expected

The US Fed has not exactly been forthcoming in its rate cuts; rather, it lowered rates very reluctantly in 2007. It has given only what the currency markets have already priced in. The basic reason for their hesitation is the desire to contain inflation ? the very same concern that weighs heavily on all other central banks in the world. The Fed wants to make certain inflation remains under control. Doing that has been more difficult because of the high energy prices coupled with the weaker dollar. Thankfully, indications of energy prices reaching $100 per barrel are no longer in circulation.

The market expects the Fed to further ease interest rates another 25 to 50bp lower; however, this is not the only option. They may want to further explore their other options, including the Term Auction Facility they introduced in December. But these options, including a cut in the discount rate, are limited especially since LIBOR rates have remained at high levels. Even as late as December, Treasuries posted one-day increases that were the highest seen in the last three years.

Who Else Might Make A Play

In the final two months of 2007, the crumbling markets were shored up by massive investments from sovereign funds. Temasek Holdings, owned by Singapore, invested $4.4 billion in Merrill Lynch; state-owned Abu Dhabi Investment Authority plowed $7.5 billion into Citigroup; and, China Investment Corporation invested $5 billion in Morgan Stanley. Sovereign wealth funds have been in existence since the mid-twentieth century. From an estimated $500 billion total size in 1990, these funds are now thought to be worth $3 trillion. The states of Norway, Singapore, the U.A.E., Saudi Arabia, Kuwait and China have between them an estimated $2 trillion available for immediate spending. Given eight more years, these funds may have total capital of $12 trillion, continuously built up from their natural resources and foreign exchange reserves. Investments from sovereign wealth funds have ? and probably will continue ? to be significant factors in helping the US financial markets recover.

How the 2008 US Presidential Elections May Affect Financial Markets

The historical trend shows more bullishness for the US dollar when Republicans gain leadership than Democrats. Whether this trend will hold depends on how close the 2008 elections will turn out. The Stock Traders Almanac makes the general observation that election years show modestly positive growth in the US stock market. In the last five decades, election years have shown a 9.2% average gain in the Dow Jones index.