How to Trade page 3

Every beginning investor, having defined his investment objectives and risk profile, thinks about how to structure his portfolio so that it meets his needs. There are a large number of financial instruments on the market and the question of proper portfolio structuring is more relevant than ever.

There`s hardly a single person today who has heard about the passive income that investing can consistently bring in. There are many examples: from the great financiers to the most ordinary people. Experience increasingly shows that you do not need to have a college degree or work for large investment funds to be effective at investing. Successful people say that poverty is the result of doing the wrong things, but wealth and success are the results of doing the right things.

As the statistics show, 2/3 of people who ventured into forex trading or another form of trading in financial products eventually give up the undertaking altogether. For decades, scientists have studied failure rates in the financial industry and concluded that a novice trader has about a 10% chance of success. Longevity in the market is a prize that only goes to the most diligent and persistent.

The analysis of the situation in the financial markets is carried out via text and graphical materials from specialized sources. Forex analytics implies studying the news, and economic and political factors to predict the movement of asset prices. It is an integral part of any trader, as opening and closing trades should be based on certain factors.

Short-term forex trading approaches offer us a number of attractive benefits. These include the opportunity to make money by placing short and long positions within a single trend; to exit a position in the evening and not worry about the portfolio while the market is closed; to trade with a fairly low starting capital. Nevertheless, when starting short-term trading, one must know its basic styles, which include pipsing, scalping, intraday, and swing trading.

Almost all indicator strategies are based on the complex application of analytical tools. Today we will talk about the Thomas DeMark oscillator (DeMarker), which can be an effective addition to any trading strategy. What is the DeMarker Oscillator? The DeMarker indicator was developed by Thomas R. DeMark, a prominent trading theorist, and practitioner, and is described in his book The New Science of Technical Analysis.

Testing of created rules is the most important and responsible stage, as a trader's future depends on the results of testing. Testing of trading system rules can be done manually or use a special program. The manual test takes more time than the computer one. Testing in the program allows faster selection of optimal parameters for indicators, but only those rules can be tested and programmed, which requires special knowledge. The manual test allows a better feeling of the market and the principle of working according to the rules of trading strategy.

In forex trading the price can be in one of two states – either trending or flat (sideways trend, range). Trading during a stable trend, the trader sees that all trend indicators confirm the movement. Trading at such moments is easy and profitable. But when a pause occurs or the trend is over, what then? It is more difficult to trade in the flat. Namely, the forex oscillators are used for analyzing the flat. This is what we will talk about today.  

Understandably, novice traders ask numerous questions at the beginning of their careers, and this approach cannot be called wrong. First of all, newbies to the market are usually interested in what amount is needed to start trading stocks or what kind of deposit they need to start trading currencies. The thing is that no experienced trader will ever tell you exactly what capital is required to start trading – this question has many nuances. Further on, we will try to grasp the subject in detail.

Technical analysis of the forex market includes many different concepts and definitions, one of which is overbought and oversold. These terms have existed on the market since the very inception of technical analysis and are very important tools in the arsenal of any trader. They are used on all world exchanges and are still relevant.