2Bull Forex Blog

For the absolute beginner, Forex training can take some years. During this time many novice traders stay with a free demo account from an online broker determined to make consistent profits in the demo account before going ‘live’ with hard earned cash.

That approach is certainly cautious and wise. At some point however, it can be advantageous to switch to a mini account, to speed up the learning curve.

Why Switch From Demo To Mini

The reason is this:

No matter how disciplined you are and no matter how seriously you treat a demo account constantly trying to imagine you are trading with real money, a demo account is still a demo account! That has a huge psychological overhead whether you care to admit it or not.

Once you start trading with real money you will realize how different the real world is! But how can you minimize the cost of Forex training and be reasonable in how much you spend on your education?

Enter the mini account! With a pip valued at a dollar or less, and with a minimum opening balance of around 250 to 300 dollars, you can continue your Forex training with low risk.

Notice that expression “continue your Forex training.” Yes, a mini account is still a practice account. That is a good way to view it. What if you open one for 250 dollars and a couple of months later it’s exceeded the margin call (blown in other words)? Then your Forex education has just cost you a little less than 250 dollars (taking into account the small remaining balance).

Obviously you wouldn’t want to do this many times. It could be after blowing a mini account you decide to go back again for a couple of weeks to the demo and fine tune your strategy. Then when you feel confident again, fund your mini with another one or two hundred dollars.

Some may object and think this is a waste. Putting it in perspective, the cost is very small. After all, it’s the cost of your Forex training education. Some persons spend thousands of dollars for a couple of days in a seminar and think nothing of it. One new trader I heard talking to another was asked how much he put in his first account. His reply? “$15,000″. It was gone in a couple of months.

A cautious, one step at a time, $100 at a time approach will be far less stressful on both the nerves and the pocket unless you’ve got money to throw at the wall.

How To Maximize The Mini Account

Now once you have traded successfully in a mini account, bringing the balance up, perhaps doubling or tripling your initial starting balance, you can now really start to maximize the benefits of a mini account.

How?

While strict risk management is crucial, and somewhere between 1 to 2% of your equity should be the maximum risk on any one trade, some Forex training educators suggest making that more like 5 to 10 % when you only have a few hundred in your mini account. This will allow you to start trading in multiple lots.

For example, suppose you build your mini account to $600 and then start to trade with 2 lots. You then set a conservative profit target for the first lot, and a more ambitious profit target for the second lot. As you take your first profit you move your stop up to protect the second lot so you are at least in a ‘can’t lose’ trade from there on.

If the balance drops below $600 then go back to trading one lot until you pass the threshold again.

Once you start trading multiple lots in a mini account using this safety net strategy, your account will begin to grow slowly and steadily.

At some future time, perhaps once you have reached a couple of thousand dollars in your account, you may wish to then implement more stringent risk management principles and go to 1 to 2% of your equity on any one trade.

In Conclusion

This approach may not be appreciated by everyone. It depends on your nature and character. For me, it has helped greatly.

To really start moving forward in your Forex training it is necessary to move from a demo to a mini account at the right time. At the same time it is necessary to get over the fear of trading live.

View the mini account as a Forex training account, fund it very conservatively, switch back to a demo when you feel the need, and aim for raising your balance so you have enough equity to start trading multiple lots.

In this way you can maximize a mini account so it really drives your Forex training to completion.

If you want to make money from forex trading and achieve currency trading success you need to make sure your forex trading strategy is objective as possible and keeps subjectivity out.

Many traders make the mistake of including to much subjectivity in their trading plan and lose; lets look at why this can be fatal.

Why Subjectivity will ensure you lose!

Many traders need to make a lot of subjective judgments about their trading signals before executing them – The problem is, the subjectivity that they have in their judgments sees their emotions come into play and they lose.

Let’s look at an example.

Elliot wave and cycles are supposed to objective yet you have to spot the set ups and make subjective judgments.

This means that you can be tempted to over ride signals, take signals you shouldn’t and generally let your emotions dictate your forex trading strategy.

The same goes for those traders who want to trade by following online news wires.

They need to decide how much the news has been discounted and how valid it is – this is difficult or near impossible and again, emotions come into play and the trader losses.

Be Objective! And Create Rules.

A better way to trade is to create a set of objective rules for your currency trading system, which mean you do NOT have to make subjective judgments – you simply follow the rules.

This keeps you focused and disciplined and keeps your emotions out of trading.

Here us a simple system that is an objective set of rules and consist of three main components.

1. Look For Valid Support or Resistance

This is support and resistance tested several times, that line up on the weekly and daily charts at the same critical levels.

2. Look For Tests of the Above

When the price moves towards the support and resistance – You should then have a timing indicator to either indicate it will hold or fail.

3. Timing a Trade

If price momentum falls into the levels using the stochastic and Relative strength Index (RSI) a short trade is taken.

If the support or resistance is broken and confirmed by the previous two indicators then a long trade on the breakout is taken.

That’s it no guessing or subjective judgment used, this currency trading strategy is a simple set of rules that are followed

Trading signals are executed in line with the trading rules.

Sounds simple?

It is! Most traders can’t do this they want to subjectively decide if the trade looks good and impose their own judgments upon the trade - in forex trading this is fatal!

Discipline goes out the window and emotions dictate the trading strategy and trading equity is lost.

Destructive Emotions

The enemy of any trader is his or her emotions. This is why most novice traders lose, they can’t get an objective plan and set of rules they can follow with discipline.

If you want to achieve currency trading success, make sure your currency trading system is objective as possible and keeps subjective judgments and emotions out or you will lose to.

Online stock trading has created a boom in the industry of stock market. It has made everyone to enjoy the excitement and thrill of stock trading by using your computer system. It has made possible to continue trading even if you are out of town, therefore, you can have a proper check over the market scenario from any corner of the globe.

How To Buy Stock Online

In today’s fast and busy life, no one has time to visit the stock brokers or firms to gather information or to invest in their schemes. Therefore, the discovery of internet has proved to be the best tool in the stock trading which has given rise to trade stock online from the comfortable ambience of your home or office. No doubt, online stock trading is one the most acceptable method of trading but few points have to be considered while getting involved into it.

1. You should always search properly for a renowned and reputable company before investing in stock market as there are numerous sites over internet that deal in the business of selling and purchasing of stocks. You should go through the reviews and testimonials of the other investors those who are already in link with them and you can also visit bulleting boards to grab information about the different companies.

There is another option of investing in the big-name stock trading companies who have their own online stock trade. You should invest in those companies, which are up to their commitments so that your invested money should not go into drains.

2. There are many sites which are linked to the buying and selling of stock to foreign markets whereas some are linked to the foreign and domestic markets. You should decide beforehand with which company you want to start trade so that you should not mess up the things. For example, if you are interested in domestic market but got linked with the site that deals in foreign market then it will create a problem for you.

3. You should always opt for the sites of stock market that are fully secured as your financial as well as personal information has to be inserted over the site in order to start the stock trade online. If the security of the site is not upto your level of satisfaction then need not to get involved as there might be the chances that your loaded information can be misused in future.

4. First inquire about the fee which is charged by various sites. You should always opt for the site charging less fees per trade, therefore, you should take the benefit of online trading which cannot be enjoyed in trading stock traditionally.

5. There should be 24 x 7 hours assistance by the online investment sites so that if there is any help required, they should always be present to assist you.

Hence, the summary of this article is that one should survey the market before getting into online stock trading in each and every term like security, fees, company’s reputation, etc. so that you should not get into the wrong hands.

Online stock trading has taken a life of its own today. The local bourses worldwide are now booming with large amounts of trades being placed in markets like Shanghai and Shenzhen with local officials noting a large rise in the number of share trading accounts being opened.

This article will list three strategies that large trading desks use and explain how the small investor can benefit from these same strategies.

Trading Strategy

Small time investors tend to rack up large losses in the stock market mostly due to a lack of a good online stock trading strategy. The essence of a good trading strategy is two fold. Firstly, always acquire a stock when it is undervalued so that your downside is protected. Secondly, fix an upper and lower selling limit mentally when you acquire the stock so that you sell on reflex and take your emotion out of the trading equation. But always ensure that the instrument or stock that you are trading enjoys good trading liquidity or such trading strategy would not work.

Large capital reserves and margin

Large banks have trading desks that have large capital pools to trade with and one winning trade could potentially bring in large profits to the bank but the converse is also true as Nick Leeson of Barrings Bank in Singapore has shown us. For the small time investor, leveraged instruments if managed well can help solve this issue of small capital. However with large leverage, you can lose big as well. Spend time tracking your trading successes and failures in a trading journal and once you start stacking multiple gains, you can then progress to making more money using these leveraged instruments.

Money Management

Finally, no trade no matter how good is 100% successful all the time. Thus most online traders risk 1% of their capital on any trade that they undertake. This online stock trading strategy is a good one as it limits your potential loss and reduces your risk exposure to the market. Some when people state that they are always in the market, this only holds true in a rising market. Remember that sometimes the best policy is to keep your holdings in cash in a downward market.

In conclusion, of all three online stock trading strategies highlighted above, money management is a very important if not the most important strategy that any stock trader should develop so as to retain your profits and to reduce your exposure to bad trading. Effective stock trading therefore also means keeping your profits that you earn from trading. Take some action today to plan your trading strategy and start acquiring greater profits in your trading activities.