The Psychology of Forex Trading

The Psychology of Forex Trading
Forex Trading Mind Set

Most of the people who engage in Forex trading lose.
Indeed, the industry estimates that more people lose than
profit. And they lose for a reason. They have not
properly prepared themselves with a Forex education and the
proper mindset to be a successful trader. In the cold
cruel world of Forex trading, you are on your own. It's you
against the market. All over the Internet, you can find so
called experts touting Forex trading systems with
extraordinary sure win claims. If it was so easy, everyone
would be a millionaire. The true winners are the ones who
have taken the time and effort to carefully devise currency
trading strategies that have been thoroughly tested
beforehand to produce positive successful results.

Listen to Yourself

You are the only one that can make yourself successful.
Everyone is trying to sell some kind of system to fools,
who think they're going to get rich instantaneously. It
just doesn't happen that way. You can use systems and
trading tools to have successful results, but there is no
such thing as a free lunch. Only through hard work on your
part will you be able to develop Forex trading strategies
that produce the results that you desire. You should begin
your education and training with Forex experts, while
building your own skill set to ultimately create your Forex
trading system. Trading forex is like any other business.
To be a successful forex trader, you need to educate
yourself. Great forex traders become better and better
because they continue learning. This gives them the edge
they need to stay on top of their game so they can go on
and become even better traders.

Make Your Forex Trading System Rules

Everyone lives in a society based on rules that must be
followed. In the Forex trading markets, except for some
simple market procedures and practices, there are basically
no rules or structures that govern your operation. You
have to take the responsibility for all your actions. If
you win, it's because of you. If you lose, it's not
because of the broker, a market, or the government. It's
because of you. You have to develop the rules and
structure to successfully exploit the possibilities that
are available in Forex trading.

If you are an individual who has a deep confidence in his
or her personal abilities, with the discipline to be able
to work hard to develop the currency trading strategies
necessary for a Forex trading system, then Forex trading is
for you. If you have the mindset to be an individual away
from the crowd, with no one telling you the rules or laws
that need to be obeyed, then you should be part of the
minority that enjoys spectacular Forex trading success.
Your profit as a successful forex trader can be
extraordinary and if you know what you're doing and have
the discipline to follow your rules of trading, there's no
limit to your profit potential.

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Andrew Daigle is the creator and author of many successful
websites including ForexBoost at http://www.ForexBoost.com
and http://forex-trading-system.typepad.com , Free Forex
Training Resource for the Novice and Advanced Forex trader.

Setting a gold standard

Setting a gold standard
When the gold standard was set in place, the price of gold
remained a constant $20.65 per ounce and only fluctuated by
$0.01 from the year 1833 to1890. So for fifty seven years
as the US Dollar was attached to this gold standard, it
remained un-fluctuating along with the gold standard. That
is how it was designed to be from the founding of the
country.

The constitution states that the currency of the country is
to remain that way to maintain the Dollar and protect
against what is exactly happening to the currency today.

From the years between 1891 and 1930, the price of gold per
ounce remained relatively stable. The lowest it went was
$20.58 and the highest it reached per ounce was $21.32 and
so, for a total of ninety seven years between 1833 and
1930, the price of gold only moved $.74 cents from high to
low.

The price of gold hit an all time low during the depression
year of 1931 since then the US slowly removed the Dollar
from the gold standard until August 15th 1971; President
Nixon announced that the US government would no longer
redeem US currency for gold. This was the last step in
departing from the gold standard. The demise of the Dollar
can be seen since it was removed for the gold standard.

Keep in mind that the Dollar has historical value and
therefore is extremely consistent, even though it looks as
though the gold price is rising; it is actually the Dollar
that is dropping. It has been as high as $1,030 per ounce,
down to $830 per ounce.

So interestingly, if you wanted to buy a new car that cost
$55,000 in 2008 and in gold, that would cost you roughly 60
ounces of gold at the spot price of $930 per ounce. So, if
the Dollar was never removed from the gold standard and all
the inflation that has occurred because of the removal from
the gold standard, that same car today would only cost you
$1,200. Remove the $1,200 from $55,000 and you get $53,800
which is how much inflation this $1,200 item has risen by
over the last one hundred years.

The original Dollar value is roughly $.02 cents in today's
money. It's astounding to realise how much the Dollar has
dropped in value. I will try to explain further. In 1964,
$.25 would buy you roughly a gallon of gas because a
quarter in 1964 were made from 90% silver and 10% copper.
Silver costing $17.20 per ounce makes the quarters value
$3.11 so that same quarter from 1964 could still buy you a
gallon of gas today. This shows that the value of gold and
silver has hardly changed and that it's the currencies that
are not tied to gold and silver that are fluctuating
drastically.

This was the warning of the founding fathers and why they
tied the Dollar to the gold and silver standard at the
founding of the constitution. The excess printing of money
by the Federal Reserve is just another tax on the American
people, it takes the value of the Dollar that you have in
your pocket and makes them worth less and less in the long
run. While you are making roughly the same amount of money,
the price of goods and services are going up but really,
it's the value of the Dollar or any currency really, that's
value is going down. I hope that I have made it clear to
you that you need to make a move on this problem, be it
investing your money as soon as you can into precious
metals or by even taking a stand against the governments
position on a detached Dollar from the gold standard.

----------------------------------------------------
There is a lot of food for thought with this article and
knowing this information can change your whole way of think
towards the Dollar in your pocket. To know more about
investing in gold, go to my web site at:
http://www.wheretobuy-gold.com and check out my other
article at: http://howtobuy-gold.blogspot.com/
Thank you for th etime you took to read this article.

To Really Save Money On Contractors Liability Insurance,Take Control Of Your Loss Runs

To Really Save Money On Contractors Liability Insurance,Take Control Of Your Loss Runs
This article is one of a series of tips to help business
owners save large amounts of money on business insurance.
Today, we are going to talk about loss runs, which are
vitally important to any buyer of business insurance, who
wants to save money. They are also known as policy history
reports, but are more commonly called loss runs. This
information applies to all forms of business insurance,
including contractors general liability insurance.

What are loss runs? A loss run is simply a report from an
insurance company showing claims you had for a particular
policy. It should show the policy number, effective dates,
and list for each claim a claim number, amount paid, amount
reserved, amount incurred. It should show premium paid for
the policy also.

Why are they important? Failure to obtain them at the
right times is a primary cause for overpaying large sums of
money. No one will accurately quote your business
insurance without currently valued loss runs.

Why is getting loss runs often difficult? Brokers know
their clients cannot get competitive quotations without
them. To avoid unwelcome competition, they rarely give
them to clients voluntarily. Brokers often try do delay
handing over loss runs to clients, and use the time to
capture as much control of your renewal as possible. To
further complicate matters, brokers often cannot access
loss runs for policies you purchased from other brokers.
The critical job of capturing currently valued loss runs 90
days in advance of your renewal routinely gets mishandled.
This ends up costing you money and creating unnecessary
emergencies as your renewal approaches.

What is the solution? Collect and organize the information
necessary to secure your loss runs. You absolutely need a
spreadsheet listing all the policies you have now, and all
those you've had in the past 5 years. The table headers
(in a row across the top) are as follows, along with
explanations after the dash:

Inception Date - what date did the policy start?
Expiration Date - what date did the policy end?
Insurance Company - Exact name of insurance company.
Policy Number - Record it accurately.
Premium - use the final audited premium.
Total claims paid - amounts actually paid by the insurance
company.
Total claims reserved - amounts not paid, but set aside in
anticipation of being paid.
Total claims incurred - the sum of paid and incurred. Type
of Coverage - Liability, Auto, Property, Excess Liab,
Professional Liab, Workers Comp
Loss Run Contact - Name, phone, fax, email address of
person who publishes the loss run.
Loss Run Valuation Date.- The date the loss run report says
it is valued.

A good way to get this to happen is to ask your broker for
it. If your broker cannot give you this, declare an
emergency. This is absolutely vital information your
broker needs to effectively run your renewals. Insist that
your broker put this together and deliver it to you. It is
best to do this long before your next expiration date.

You want the policy history rows sorted first by line of
coverage, then by inception date. That way you will see 5
years for each line, in neat chronological order. For each
line, you can sum the premiums and the claims to see how
much money you are making the insurance companies. It is
usually a lot.

Summary: Failure to get complete loss runs on time is a
primary reason for overpaying for business insurance. No
one can accurately quote your insurance without currently
valued loss runs. This means you have to get them every
year, 60 to 90 days in advance of your expiration dates.
Keep organized as I am describing, and you will avoid the
following expensive mistakes:

1) Letting your broker think he or she has a monopoly on
your renewal. If you have your loss runs, that means you
can get quotes from anybody. If you don't have them, you
can't.
2) Having a last minute crisis, because of a missing loss
run. This can result in a quote not happening that could
have saved you a lot of money.
3) Getting ignored by underwriters, who view your
applications for quotations as incomplete without the loss
runs.

----------------------------------------------------
Don Bury is a nationally recognized expert on negotiating
with commercial insurance brokers. Author of "Buyers Guide
To Business Insurance" in 1993, over $20 million in cost
reductions have been delivered so far.
Contractors get free help at
http://www.contractorinsurancetoohigh.com
Don Bury, President
Insurance Cost Reduction Services
3663 Camino Bella Rosa
Sierra Vista, AZ 85650
Phone/Fax: 800-760-1867
email: donbury@icrs.biz

Incorporating Soft Elements Into Your Forex Trading Strategy

Incorporating Soft Elements Into Your Forex Trading Strategy
To veteran forex traders, the term 'strategy' is often
synonymous with 'trading tools,' meaning any combination of
charts, indicators, and oscillators that will help them to
make judgment calls on their trading decisions.

Though when you are caught up in trading, it is very easy
to become so focused on the technical aspect and trying to
gain an edge with the latest indicator that you forget to
focus on the mental aspect of trading. In a sense, a trader
will fall into the trap of putting to much of their focus
outside of themselves and will actually forget that *they*
are the ones making all of the choices and decisions.

This mental aspect of forex trading incorporates what we
call the 'soft elements' of a forex trading strategy, and
the two main parts to focus on are psychology and money
management. This is as opposed to the 'hard elements' of
your trading strategy, which would be the type of charts,
indicators, and oscillators you are using that make up the
technical portion of your trading strategy.

Money management and trading psychology are inextricably
related, and one cannot be successful without the other.
Trading psychology mainly encompasses focusing on your
emotions while you are trading and making sure that
emotions such as fear or greed do not make you deviate from
the rules of your trading strategy.

You will feel all kinds of different emotions during your
forex trading (it can be rather like an emotional roller
coaster), but the two emotions that can be the most
devastating are fear and greed. Trading psychology means
that you learn to tame these emotions as they pop up, and
coming to terms with the fact that dealing with large sums
of money can be a very emotional experience.

Money management is an offshoot of forex trading
psychology, but it is probably the most important soft or
mental element of your strategy. A simple definition of
money management would be 'acting in such a way to maximize
gains and minimize losses.' One of the most important rules
of proper money management is to always trade with the same
number of lots every time you receive a buy or sell signal.

Another rule is to never forget to enter a stop loss order,
and always go for the same profit/loss ratio. A common
proportion that many forex traders follow is 1.5/1 or 2/1,
meaning that they will always enter a trade hoping to get
1.5 or 2 times the amount of pips that they are willing to
risk (and this usually includes the spread).

As you should see, money management can be difficult or
even impossible to implement if you ignore trading
psychology, because you must already have emotional
stability if you are going to focus on maximizing gains and
minimizing losses. If you get fearful every time the market
turns against you and rush to exit the trade before it has
time to turn around in your favor, you will short circuit
the power of your trading strategy.

If you ignore the soft elements of your forex trading
strategy, it really doesn't matter how powerful your
combination or indicators and oscillators is because you
will always fall short when it comes to making an emotional
judgment call.

There is no quick fix to creating a profitable forex
trading strategy; including all of the essential technical
and mental aspects is the key to success.

----------------------------------------------------
Read more about profitable forex trading at
http://TheCurrencyMarkets.com
Get free information about the two most affordable and
comprehensive forex trading courses at
http://TheCurrencyMarkets.com/currency-trading-strategy-repo
rts.htm