How It Works

Developed by John Grace and Albert Perrie from out of 38 years’ combined experience in the forex markets and launched in the spring of 2009, Forex Megadroid uses what is called ‘market adapting intelligence’ to make it flexible enough to achieve a high level of accuracy in a fluctuating market.

The criticism thrown at most automated forex software by many traders is that the robots can only make money if the markets are consistent. The old style of robot that was based on inflexible rules was not able to cope with major changes in the patterns of market fluctuations.

However, the new market adapting intelligence, as you might guess from the name, allows a new generation of forex robots to learn from these changing patterns so that they can adapt to a certain amount of inconsistency in the markets and refine their trading rules to fit. This gives your funds a much better chance of surviving when things become more than usually volatile.

Of course we are not talking about long term predictions. Forex Megadroid’s ‘reverse correlated time and price analysis’ (RCTPA) aims to predict market movements in the next 2 to 4 hours.

Results

At the time of writing, the Forex Megadroid has only been out for about 6 weeks so it is early days, but reports from users on the foreign exchange trading forums are very good. Many people are seeing 90% or more successful trades.

The robot needs to win 5 trades for every loss so a ratio of 90% will make good profits. Keep in mind though that this does not mean always 9 wins followed by 1 loss. You could have a couple of losses in short succession which will eat into gains and could frighten off beginners. Experienced traders know that losses are part of the game and you must be prepared for them.

In terms of percentage gains, users report 10% to 20% increase on live accounts over one month. That is a healthy profit.

Disadvantages

Users report that the Megadroid did not at first make as many trades as they expected. People were only seeing 3-4 trades a week. This meant that unless you wanted to risk large sums, you would not have a chance to make a lot of money in a short time, which many people starting out in forex want to do. So this was frustrating for many users.

However, a slow and steady approach is much more likely to lead to long term growth. If this software teaches beginners to look to the long term instead of trying to make a fortune overnight, it will be doing us all a service. So have patience while your bot is sitting there waiting to trade.

Anyway with the recent release of version 1.1, long gaps between trades do not seem to be so much of an issue and users are reporting up around 10-12 trades a week now.

Price

Given all that it does and the research and development that has gone into this, I was expecting it to cost more than the average forex robot. But it doesn’t. At the time of writing it is available for just $97 and even if you miss that price it is worth plenty more.

Guarantee – 100%

There is a 60 day 100% refund guarantee and you can claim this from the vendor Clickbank. You do not need to contact the product developers.

Forex Megadroid Review Summary – 5 stars

Automated forex software is constantly evolving but this one does genuinely seem to be the leader of a new generation. While there are others that use the same approach, Forex Megadroid seems to be getting the best results. With 60 days to play with it before you have to decide to return it or keep it, you can try it out without risk. Go for it.

The word is an acronym standing for percentage in point (or sometimes, price interest point). It is the smallest increment of changes in values. It allows us to measure a rise or fall in currency values in percentage terms instead of in dollars and cents.

Why do we need to talk in pips? The reason for this is simple. In the foreign exchange market there is no world currency in which to express values. The US dollar may be the most commonly traded currency but it is not involved in all trades. If you are trading cross rates, i.e. two other currencies such as EUR/GBP or any other combination that does not involve USD, it would not make any sense at all to express your gains and losses in terms of US dollars. Instead, we need something that is a small percentage of the value of whatever currencies we are dealing with.

This means that the monetary value of a pip varies according to the currency.

Most currencies are quoted to four decimal points. For example you might see the bid price for EUR/USD quoted at 1.3642 and ask price 1.3644. The difference (the spread) is 0.0002 or 2 pips. Here a pip is 0.01% of a lot.

So if the lot size was $100,000, one pip would be worth $10. For a lot size of $10,000, one pip would be $1.

That is the value of pips when the US dollar is the quote currency, i.e. XXX/USD. But when the quote currency is different, one pip is usually 10 units of that currency (e.g. 10 euros or 10 pounds). Or if your lot size is 10,000 units, one pip is 1 unit (1 euro or 1 pound).

The exception is the Japanese yen which has a much lower unit value than most currencies (you get a lot of yen to the dollar). Because of this, the yen is only quoted to the second decimal point. You might see a price USD/JPY 110.15. In this case one pip is 0.01 or 1% but in yen, not dollars. So the pip value is JPY 1000 which at that price would be worth US $11.015.

These differences can be confusing when you are just starting out. So it is better for beginners to trade consistently with just one currency pair.

If you are trading one pair regularly every day you will soon get used to how much a forex pip means in terms of your actual gains and losses in your account. You will know how much one pip is worth in dollars or in your own currency.

But when you are trading several different currency pairs, you have to deal with pips of different value. If you get confused, you could be taking greater risks than you planned or closing trades with less profit than you thought. It is much easier to deal with only one pair at first until you have a sound understanding of trading practices and forex pip values.

One dictionary definition of discipline is: behavior according to established rules. Applying this to the forex markets, it means trading according to an established system, and not deviating from that system.

In fact, if we want to get around the negative associations of the word, we could describe it instead as being consistent … acting consistently in accordance with the system that you have selected.

The opposite of self discipline is self indulgence: giving in to every desire without thought for the future. Translated into trading terms, this means acting on your whims … trading on impulse and on ‘feelings’. When you do this, you are leaving your profits in the hands of pure chance.

In order to be successful at most things in life, you need to act consistently and it is not always easy. Self discipline requires saying no to an immediate temptation for the sake of longer term success or happiness. If we are to reach our goals, future consequences must be more important to us than current satisfaction.

In everyday life terms, this means turning down dessert because you do not want to gain weight, or passing on the illegal parking spot because you do not want your car to be towed.

In forex currency online trading, self discipline means

• accepting a loss without losing faith in your system.
• looking for a reasonable profit in the long term instead of taking huge risks because you want to get rich overnight.
• not giving into the fears that hold you back from making a larger trade when you know it is the right thing to do.
• doing your research instead of believing that the latest great technique is going to work for you just because you want it to.

In short, it means seeing that the emotions which can feel overwhelming at times are not really so important. Strong emotion, whether it is fear, anger, greed or desire for pleasure, almost always relates to a short term wish, not a long term plan. We need to get beyond this to be successful in the forex markets.

But if you have trouble with this, do not worry. Help is at hand. Try an automated forex system. They are as emotionless as Spock and will do all of your forex currency online trading for you with the discipline of a robot.

Learning forex currency trading is one way of earning money online that a person can do from the comfort of his or her own home. Some of us start in our spare time while holding down a full time job, others may be retired, unemployed or disabled. We soon get hooked and want to make this our full time career.

We all start out with big dreams and while these may come true for a few people, we must face the facts. The truth is that the majority of traders starting out will lose money with online currency trading. Why is this, and how can we avoid falling into this unlucky crowd?

One problem with forex trading is that many people approach it as if it were a game. They have a gambling mindset. They may open and close trades almost as if they were playing roulette, hoping to be lucky this time.

This type of trader has become more and more prevalent in the last few years since online casinos were outlawed in the USA. People who got a kick from risking (and probably losing) their money had to find a new way to do it, and many of them came into the forex market.

But forex trading is not a game of chance. There may be some similarities in the way that you view gains and losses but exchanging currency is still a form of investing, even if you are trading on the probability of a rise or fall in the interest rates. There are skills to be learned, techniques and tactics, systems that are profitable and some that are not.

In fact the most important thing to remember when you are starting out as a forex trader is that you must completely get rid of the idea of relying on luck and intuition. Stop using words like ‘playing’ when you are talking or thinking about making a trade.

Instead, concentrate on finding a reliable system and understanding the market thoroughly before you jump in. I know you probably do not want to hear this but you do have to spend some time on your forex exchange training if you want to make money online from home with forex trading.

But there are several things to be taken into account when you consider how to use the trailing stop. It is a little like a ratchet in that it can move up but not down. When you move into profit, it follows behind, moving up by the same number of pips that the market moved. But if the market falls, it stays where it is. So the market can rise and rise and you go on making more profit, but when it falls just a little way, the stop loss comes into effect and exits your trade with whatever profit or loss you made up until that point.

To give an example, you open a trade to go long. Of course at the moment of opening you are at point zero: 0 pips profit or loss. Let’s say you set your trailing stop at minus 30 pips. If you are unlucky and the forex market just falls and falls, the stop loss will kick in and close the trade for you at 30 pips down. But if the market rises, the stop loss will rise with it.

So when the market is 20 pips in your favor, your stop will have moved to 30 pips below that. If the market then falls and the price hits the stop, the EA would get you out with a loss of just 10 pips.

If the market rises to 40, the stop moves up to 10 above zero. You then have a guaranteed profit of 10 pips. In fact as soon as the market rises by the same number of pips as your forex trailing stop (in this case 30) you cannot lose.

Sure you could monitor the markets and operate this strategy yourself, but there is a risk of you failing to make your exit at the right moment and taking a greater loss than you planned, or having to exit a trade while the market is still rising because you have to sleep or whatever. So as long as you can leave MT4 running, an EA on autopilot relieves a lot of the pressure that would otherwise be on you in this situation.

The volatility of the market is the main factor in deciding where to set the trailing stop. You do not want to take a heavy loss but at the same time you do not want to have the stop triggered by random fluctuations in the market. A forex trailing stop that is too close to the starting price will be triggered so often that you could end up making constant small losses.

Studying price movement with forex technical analysis involves charts. The theory of it is that if you look at the historical records of how prices have moved in the past, you can identify tendencies and trends which will mean that you can predict how the prices will move in the future. Then as soon as you spot an emerging pattern that fits your system, you have a trading opportunity.

There are three types of forex charts:

1. Line charts

Line charts simply plot each closing price and join them with a line. The rise and fall of the line shows the general movement of a currency pair. However, it does not show movements within the trading period, only the close.

2. Bar charts

A bar chart will show a series of vertical lines or bars. The top of the line represents the highest price during that time period. The bottom of the line represents the low. A short horizontal bar on the left side indicates the opening price and a short horizontal bar on the right side indicates the closing price.

Since they show the open, high, low and close, bar charts are also sometimes called OHLC charts.

3. Candlestick charts

Forex candlestick charts show all of the same information as a bar chart, but presented in a different way which most people find easier to read at a glance.

You have the same vertical line with the high at the top and the low at the bottom, but there is also a wide block in the middle showing the gap between the opening and closing price. The blocks will be filled white (for a rising price) and black (for a falling price) or more often these days they are colored. Colors can vary but a common combination is green or blue for rising and red for falling.

For forex technical analysis most people prefer candlestick charts over bar charts because they are easier to interpret. It is much easier to see turning points in the market using candlestick charts. You can immediately see where the market reversed from an upward to a downward trend and vice versa.

When you see a trend forming, you can make money by trading in the same direction as the emerging trend. ‘The trend is your friend’, as currency traders say. For this reason, identifying the trend is the most important thing to learn in forex technical analysis and using candlestick charts is probably the easiest way to do this.

The simplest way of looking at these two methods of analyzing the market is to say that fundamental analysis considers the world economy while technical analysis looks at charts. In this article we will consider the different fundamental or economic factors and how they can affect your trades.

It will be clear to anybody who has even the most rudimentary understanding of the currency markets that a nation’s economic status will have an effect on the value of that nation’s currency. A healthy economy means a strong currency, just as a company’s stocks will rise in value when that company is doing well.

Any time that a major financial or economic report is due from one of the main players in the world economy, you can expect to see an effect on the foreign exchange markets. This includes reports of the country’s Gross Domestic Product, statements of the national debt, inflation, employment levels and trade deficits. Many of these reports are given out regularly at predetermined times and dates, and you will see a lot of volatility in the forex markets around those times.

It is very important to keep track of when these reports are due, not only in your own country but in all of the countries whose currencies you regularly trade. You cannot rely on national newspapers and television for this. They do not carry international economic news at a sufficiently detailed level. You need specialist publications. Many people use the internet for this purpose.

However, it is not only the economy that counts. Social and political forces also have a strong influence on a nation’s currency values. Events such as an election, civil unrest, or a natural disaster can cause fluctuations in values.

Some of these events are difficult or even impossible to predict, but you can still base trades around what is likely to happen after the event. You can use historical analysis to see what happened in the currency markets the last time there was a similar event.

If you want to base your trading around fundamental analysis of the forex markets you will need to be the type of person who enjoys following the financial, political and economic news.

The alternative is to use information about upcoming events to avoid trading at those times. People who prefer to rely mainly on technical analysis will do this. But you still need to know what is happening, in order to keep out of the market. So even for somebody who prefers basing their trades on charts, forex fundamental analysis is important.

Hopping from one thing to another will kill any chance you have of making profits, but we are all tempted from time to time. If you find it hard to keep to one trading system, here are some techniques that may help you to learn to be consistent.

1. Consider carefully before you decide to follow any system. One successful businessman has said that the secret of his success was thorough research before a decision, and then sticking to it like iron. You need to be sure that your system is profitable … not necessarily the very best. And you need to be comfortable with all the actions that it will require you to take, whether things are going well or badly.

2. If you have problems with self discipline in other areas of your life, use those to train yourself in the skill before you start live trading. Do not pick the thing that you have most trouble with, but something that you could fairly easily master. It might be getting up at the same time every day,

3. Allow yourself a small ‘fun’ budget or have a separate mini account for trades that look so tempting that you cannot pass them up even though they do not fit your criteria. You will almost certainly lose this money over a period of time, so be sure you can afford it. If not, avoid the temptation and track these trades on paper instead or use a demo account as part of your forex trading education. Be sure to track them all because we have a tendency to remember the few that would have profited us and forget the majority that would have lost.

4. Do not discuss your trades or your system with anybody else. It is fine to ask around on forums before you have decided on your system, but do not be drawn into debate about the merits of a system after you start using it. You will quickly be swamped by negativity from people who want to believe that their own system is better. Equally, do not discuss it with non trading friends or family members. They will often be negative simply because they do not understand.

5. Do not drink alcohol while you are trading. In fact, it is better not to even look at the markets when you have had a few beers. If you see a tempting trade that breaks your normal rules it will be much harder to resist when you are under the influence of alcohol.

So even though we all love the idea of working from home in our pajamas with a beer at one elbow and the cookie jar at the other, reality is that relaxing to this extent does not combine with successful forex trading. A mind that is even slightly fuzzed by alcohol will not be able to keep to a consistent trading plan.

An automated forex robot can help you out here. You can set it up to trade automatically for you, if you are not yet able to act consistently while you pursue your forex trading education.

The truth is that when it comes to financial news, the major international banks pretty much always make sure that they are the first to hear. When an expected report is released they will have people right there. The trade-from-home little guy, on the other hand, has to wait a few crucial minutes for the report to appear on the TV news or the internet. Even seconds can make a difference.

At times like this the markets will change so swiftly that you cannot really hope to jump in and make money. The banks will dominate the markets and although you may sometimes be lucky, you could easily be wiped out if the news goes against you.

In practice if you do want to trade on the outcome of an upcoming event such as an election or a financial report, you are more likely to try it by opening a trade before the announcement. You might have a strong belief that it will go one way or the other. However, you cannot really know for sure. When you think about it, opening a trade at this time is really nothing more than betting on the outcome.

It is at times like this that we tend to be easily carried away by our own ideas, hopes and emotions. It is can be very difficult to make a rational assessment of a situation where so much can ride on the outcome. Forex real time news trading should be considered a speculative venture. Therefore, unless you are really in the thick of the financial news centers, it is probably best to avoid this kind of trading. A system that makes steady profits over a period of time is the best way for most small traders to operate.

Of course you must still keep one eye on the news while you are actively trading, but instead of aiming to make money from current and upcoming events, you are more likely to want to close out on your trades before certain reports are released. Critical times include the opening of the stock exchange in the countries whose currencies you are involved with, and announcements of interest rate changes in those countries. In addition, the USA is such a major player in the forex markets that events in the USA can affect all currency pairs, even if you are not trading the US dollar. You will probably want to avoid being caught with an open trade at all of these times.

For this reason, most traders who operate a sound forex trading system will avoid trading altogether in the extremely uncertain times preceding a major announcement or release of forex real time news.

Theoretically you could trade any two currencies of the world, but in practice most foreign exchange trading is limited to the currencies of the larger financial powers. This does not necessarily mean the biggest or most politically powerful countries. Switzerland for example is only a small country but is a major player in the financial markets because of the global importance of the Swiss banks.

There are 6 major forex pairs which between them account for 90% of the funds traded on the forex markets. These are:

- EUR/USD: the euro and US dollar.

- GBP/USD: the British pound and US dollar, nicknamed Cable because it used to be synchronized on both sides of the Atlantic by a cable running under the ocean.

- USD/JPY: the US dollar and Japanese yen.

- USD/CHF: the US dollar and Swiss franc.

- AUD/USD: the Australian dollar and US dollar.

- USD/CAD: the US dollar and Canadian dollar.

Some traders do get involved in other combinations of these major currencies or pairs that include other currencies such as the New Zealand dollar. But in the beginning it is best to stick with the majors.

The US dollar is the most significant single currency and is involved in 85% of trades according to a 2007 study. The euro is second at 37%. Next come the yen, pound, Swiss franc, AUD and CAD in that order. If you are wondering why these add up to more than 100%, it is because there are always two currencies in every trade.

What Is The Best Forex Pair For A Beginner?

If you are just starting out in forex, most experts advise beginning with the EUR/USD pair. This is because there is a lot of information about these currencies and the high liquidity results in a smaller spread, so your costs will be lower.

Some of the other currencies have particular characteristics which make most newbies avoid them unless they have special knowledge. For example the value of the Canadian dollar is strongly influenced by the price of oil because Canada is an oil exporter. The Japanese yen can also be affected by the price of oil in the opposite direction because Japan is a large consumer and importer of oil.

You will not want to get involved in a lot of different currencies when you are starting out. The best thing to do is probably to take the EUR/USD market and stay with that for the first few months at least. GBP/USD would be the second choice of the major forex pairs for most new traders.