Risk aversion rules forex market, though

The Reserve Bank of Australia hiked its interest rate again, continuing its aggressive attempts to stem the tide of inflation. Australia’s economy gets regular boosts from China, though, and with China trying to slow things down, the RBA may put further hikes on hold.

Normally, such a move would be accompanied by some risk appetite on the forex market. This is not the case today. Equities in Europe and the U.S. are plunging on European debt concerns. In the U.S., the Dow is down more than 150 points.

A trading plan is a must. I would be will to bet that virtually all successful traders have one. However, most new traders have no plan. In fact, I bet most new traders barely even have actual reasons for entering a trade. Creating a Trading Plan

Creating a trading plan is actually relatively easy. There are several core requirements that make up the plan. In my opinion, the main components of a trading plan are:

Trading objective (goals). What and when to trade. Money management. The edge (trading strategy that puts the probabilities in your favor or a long sequence of trades). Documentation and analysis of the results.

First, we have to define our trading objectives. Why are you trading? What is your end goal? Most new traders have completely unrealistic goals. For instance, a new trader might wan their $10,000 investment turn into $100,000 in their first year. While this is possible, it is highly improbable. These unrealistic expectations kill off a lot of traders before they ever had a chance. I think breaking even in the first year is an admirable goal; many traders do not do that. If a trader makes 20-30% on their initial investment in their first year, that is outstanding.

Full Story – Fx360

social networking to connect contestants in a unique way

A worldwide online trading contest that started Sunday, Feb. 7, set new benchmarks for the extent of cash and other prizes offered, and linking traders globally through social networking, as well as

Is the euro ready to turnaround in forex trading?

Today, the euro is showing some fight, struggling its way toward 1.4000 in forex trading. That level still remains a ceiling, but the euro is doggedly headed toward getting through it.

However, there are a number of issues standing in the way, since there are reasons that the euro is the worst performing G10 currency right now. But that could be changing. GFT’s Kathy Lien looks at the promise — and the perils — of the euro in FX360:

Since the beginning of December, the euro has fallen over 7 percent or more than 1,000 pips against the U.S. dollar. Such a sharp decline in the currency will certainly attract bargain hunters. However, in the forex market, trends can last far longer than most of us can anticipate. Forex trading is an expectations game and until traders or investors expect things to change, it probably won’t.

Clearly, in order for the euro to make solid gains, it will be necessary for forex traders to change their view of the 16-nation currency. However, issues with Greece will need to be resolved, and the euro zone will have to show that it will not be lagging behind the U.S. in an economic recovery.

See AlsoEuro Trends in Forex TradingThe forex market and trends for traders

Welcome Ryan, the author of this Forex Project guest post. Ryan trades from a quiet country lake house and helps traders through his blog at http://www.ryanokeefe.com.
Does your trading plan encourage you to over trade?
Recently I started a survey on my website asking traders to answer this question:
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