Trading in the foreign exchange market today means having a sound understanding of technical analysis and in particular an ability to keep track of currency pairs by learning the skill of reading live or real time Forex charts. For the novice trader this also means finding a source of good online Forex charts and, better still, free Forex charts. Even better, if you can find yourself some free chart pattern recognition software for Forex and learn how to use it you will be well on your way to trading with a fair degree of confidence.Online forex charting conveys information about currency prices at specific time intervals ranging from as little as one minute up to several years and prices can be plotted either as simple line charts or as bar or candlestick charts showing price variations at specific time intervals.
Line charts are easy to read and give a broad overview of price movements which often allows you to clearly define patterns in price movements. By contrast, bar charts are not quite as easy to read but do provide far more information.
In simple terms the length of each bar on a bar chart indicates the price spread for a given period and the longer the bar the larger the variation between high and low prices. Opening and closing prices are shown on each bar so that you can see at a glance whether the price has risen or fallen and just what the variation in price has been. Although bar charts can be difficult to read, most chart pattern recognition software packages simplify the process of reading bar charts considerablyInvented by the Japanese to analyze rice contracts, candlestick charts are similar to bar charts but are far easier to read as they are color-coded. For example, green candlesticks are used to show rising prices while red candlesticks show falling prices.
The beauty of candlestick charts is that the candlestick shapes when viewed in relation to one another form patterns many of which have been given names such as ‘Morning Star’ and ‘Dark Cloud Cover’ and once you learn to recognize these patterns it is an easy matter to identify trends in the market.
Although a real time Forex chart can give you a great deal of information about a particular currency pair this is often supplemented using a number of technical indicators including trend, strength, volatility and cycle indicators all of which are used to predict both movements in the market and market volume.
The most commonly used Forex technical indicators include:
Average Directional Movement (ADX). ADX can be used to ascertain whether a market is approaching an upward or downward trend and how strong that trend is likely to be.
Moving Average Convergence/Divergence (MACD). MACD indicates the momentum of a market and the relationship between two moving averages.
Stochastic Oscillator. The stochastic oscillator shows the strength or weakness of a market by comparing closing prices to a price range over a period of time. A high stochastic will indicate that a currency is being overbought while a low stochastic will indicate that a currency is being oversold.Relative Strength Indicator (RSI). RSI is a 100 point scale which shows the highest and lowest prices over a given time. When prices move above 70 a currency is considered to be overbought and when prices move below 30 a currency is considered to be oversold.
Moving Average. The moving average is simply the average price for a set time period when compared to other prices during similar time periods. For example, the moving average of closing prices over a 14 day time period would be equal to the sum of the 14 closing prices divided by 14.
Bollinger Bands. A Bollinger band consists of three lines - an upper and lower line indicating the range of price movement and a middle line showing the average price. When the market is volatile the gap between the upper and lower bands will widen and when a bar or candlestick crosses one of the bands it will indicate a currency which is either being overbought or being oversold.
Monday, September 7, 2009
The Importance Of Real Time Forex Charting
What Is Day Trading?
The principle is simply to spot an opportunity and then profit from it quickly getting in and out of the market with just enough time to make your profit and too little time to risk the market turning against you. For example, you might open a position at 11:00 am and close it out just a few minutes later at 11:07 am to take a small but quick profit and repeat this process as many as a hundred times in a single trading session.
Today this traditional definition has been widened somewhat and we now also refer to the practice of trading from home through an online broker as day trading. And, just to complicate matters, the term ’swing trading’ has also started to appear recently to refer to traders with a slightly longer investment horizon of anywhere from one to five days.
Although we talk about ‘investment horizons’ it also needs to be understood that day trading is not the same as investing and you will be working to very short time frames during which you will need to be glued to your computer screen jumping onto the wave of a trade as it gains momentum and the jumping off as it crests in order to ride the next wave. Spotting the waves as they roll in and knowing just when to jump on and jump off requires both skill and practice.
For those who enjoy the excitement of the roller coaster ride then day trading can be both exciting and profitable but it is not something for the novice forex trader and should only be contemplated once you have cut your teeth in the world of currency trading and gained a fair amount of experience.
Forex Trading Strategies Are The Key To Successful Trading
Before venturing into the world of Forex trading it is vitally important that you stop and think carefully about the trading strategy that you are going to adopt, because Forex trading strategies are the key to success in currency trading. There is no single strategy when it comes to trading in the foreign currency markets and every Forex trader has to develop his own strategy. It is important however to have a clearly defined plan from the very outset.
Some Forex traders choose to use a technical approach when it comes to trading while others are more at home with a fundamental approach. Both approaches are of course sound, but in reality most successful traders use a combination of the two to give them both an overview of the foreign exchange market and to permit them to plot specific entry and exit points for each currency trade.
The idea behind technical analysis is simply that prices rise and fall according to well established trends and that the currency market possesses clearly identifiable patterns which can be seen as long as you know what to look for. Knowledge and experience come into play here, but it is also a question of using the numerous analytical tools that are available and this means having a sound working knowledge not just the patterns of price movement but also of the tools at your disposal.
Many traders also rely on what are known as support and resistance levels. Here ’support’ refers to a low price which is repeatedly seen as being the bottom of the market and from which there is a tendency for prices to rise. A ‘resistance level is a high price beyond which a currency is rarely traded.
The principle here is that, should a currency break through either its support or resistance level, its price is likely to continue in that direction. So, if the price of a currency rises above its resistance level it is considered to be bullish and the price can frequently be expected continue to rise.
Another commonly used tool in foreign currency trading is that of moving averages. A simple moving average (SMA) shows the average price in a given time period (say 7 or 10 days) when the price is plotted out over a longer time period. Forex traders use moving averages to eliminate short term fluctuations in price and to provide a clearer picture of the movements in currency prices. A SMA can be plotted to indicate when prices are displaying a tendency to rise or fall. Prices which rise above the average will frequently continue to rise and, similarly, prices which fall below the average will often continue to fall.
These are just two of the many trading tools that can be used either in isolation or in combination and it is recommended that traders make use of several trading tools to analyze the market. If you are relying on just a single trading tool then trading can often be risky but, if the results from several different tools show that the market is moving in a particular direction then trading can be conducted with a fair degree of confidence.
Many traders will base their trading upon a fundamental analysis of the market and thus base their trading on such things as economic and political events, trade figures, inflation figures, unemployment rates and a host of other similar forms of data.
Fundamental analysis can be very powerful but it is perhaps at its most powerful when it is used alongside technical analysis, particularly as a tool to reinforce the indications derived from technical analysis.
In many ways it does not matter what trading strategy you adopt as long as you are happy that it can provide you with clear expectations about movements in the market and indicate to you just where you should be trading and when you should enter and exit individual trades.
A sound knowledge and understanding of fundamental and technical analysis should be every forgein currency trader’s starting point when it comes to building a Forex trading strategy.
Forex Book
Forex trading can be one of the most rewarding and most exciting financial trading experiences for the prepared investor. For those unprepared, forex trading can be a downward spiral progressively becoming more and more painful as you proceed to lose more and more money, without knowing exactly why. When you're trading forex book yourself a ticket on a rollercoaster - it is just as exciting. Very often, especially in the loose regulatory environment (or lack thereof) on foreign exchange, you the investor are often left to decide for yourself if forex is a suitable investment opportunity for you. It becomes your personal responsibility to try getting a forex trading education.
One of the better ways to learn about forex is getting a good forex book that may share ideas about how to trade and how to analyse the various currencies before you make a trade. You will learn many of the forex trading tools from a comprehensive forex book. There probably will be discussions on such things as Fibonacci retracement levels, or moving averages, or candlesticks, or about so many other techniques that only a forex book can think of putting together. You should be aware, though, that while reading a good forex book gives you a store of knowledge which is important to a forex investor, having read a forex book can never be considered sufficient to provide a sound forex trading education. The forex trading market is far more demanding of one's skills and knowledge than that. The disciplines and lessons of actually participating in the marketplace will probably give a more far-reaching forex trading education than any forex book can provide.
On the other hand, your forex trading education will be significantly handicapped if you do not shore it up with the theoretical underpinnings that you can find in a fine forex book. It would seem that the best approach to raise your level of preparedness for the gruelling forex trading market is to try test runs on how the market operates, through a forex trading website, where there are simulated retail platforms that you can practise on. Some of these online forex trading sites provide a very realistic simulation of the forex trading experience. You can then follow through on the lessons and forex trading experience you obtain from these online sites by looking up the subject matter in a good forex book. For instance, if you are trying to learn how to do an analysis of the market through the candlesticks, you can read your forex book chapter on this topic, and then make sure you go through the simulation on candlesticks at the website. After your simulation sessions, you should go back to the forex book to reinforce the lessons. Your absorption and comprehension should be much improved. Somehow, complex subjects generally are better discussed and more clearly explained in a forex book.
It is not always easy to understand the theoretical foundations of technical analysis and fundamental analysis - which are the basic analytical tools used in forex trading, but you can get solid discussions on these two topics in a forex book. You also need to obtain sound information about risk management, and management of your trades as well as your trading funds. A forex book on these subjects can give lucid explanations. If reading a forex book is too time-consuming, you can look up various websites that can offer a forex book in electronic format. The approach in these online forex books is usually simpler and easier to read. In some instances it will be possible to supplement the online forex book with video courses on forex trading. Having gone through a good forex book will round out your forex trading education, which is crucial to your gaining confidence for your foray into forex trading.
The Forex Demo Account
The Value Of Simulated Forex Trading To Currency Trading Success
As a novice you will probably begin trading by opening a Forex demo account and your first few trades will be paper trades, or simulated Forex trading, as you learn how the market works and how to use some of the trading tools. It is not long however before you are ready to move on and to put your paper trading days behind you.
Many successful Forex traders today are discovering that continuing to trade on paper from time to time can be both helpful and profitable.
Problems often arise for traders when they find themselves with a losing trade. Despite the fact that losing trades are an everyday part of trading life, you are always going to be affected by a trading loss and there is often a strong, albeit often subconscious, urge to recoup the money you have just lost as fast as possible. This frequently means that you go right back into the market but, because you are in a losing frame of mind, your next trade often also results in a loss or a less than spectacular gain.
In this case you trade seriously and in exactly the same way that you would trade normally but run the trade on paper. You study the market indicators, open a trading position, put a stop loss order in place and then track the trade. As the trade progresses you move your stop loss order as the market moves and, finally, you close out your position when your market indicators tell you to do so.
This paper trade might result in a profit or a loss but, as the trade is only being made on paper, it doesn’t matter one way or the other. The importance of this trade is that it allows you to clear your mind and to put your previous losing trade behind you. Even if this paper trade results in a loss the affect is positive because you are happy knowing that you have not actually lost any money.
Having run this paper trade you are now ready to leave the world of simulated Forex trading and return to live trading and can open a new trading position in a winning frame of mind.
The Advantages Of Automated Forex Trading
An increasing number of people are being drawn to Forex trading in preference to the many other forms of investment available today and it is not hard to see why.
The Forex market is the largest trading market in the world with a steadily growing trading volume which has risen from some $500 billion dollars to $2 trillion in the last twenty years. It is also an incredibly liquid market which is not tied to any particular trading floor and operates around the clock across the world making it effectively a permanently open market. As one market closes another is opening and you can effectively follow the markets around the world as you trade and even all but eliminate the fact that the market in your home country will close for the weekend.
It is no wonder therefore that Forex trading attracts a wide and growing variety of both big and small traders each of whom enjoys a wide choice of trading strategies based upon the myriad of factors which affect foreign exchange rates. For many traders coming into the market it is the fact that there are so many different things that affect currency exchange rates which they find most attractive as it allows them to use a huge range of different tools when working in this extraordinarily exciting market.
Perhaps the greatest influence today however on the future growth of the market and its popularity lies in automation which has never been easier to accomplish and which brings with it many more advantages than disadvantages.
Automated Forex trading allows trades to be conducted in real time anywhere in the world and virtually eliminates the losses so often seen in manual systems which are trying to operate in such a fast moving and volatile environment. Anyone who has traded using a manual system will know only too well the frustration of a row of losses caused by nothing more than a simple time delay in buying and selling and will appreciate the value of automated currency trading.
Automatic Forex trading also brings with it the ability to operate in a wide range of different currency markets at the same time without any regard for the time zones of the markets concerned. If you are sitting in the United States at 2 o’clock in the morning then automatic trading allows you to conduct business with traders on the other side of the globe in several different countries all at the same time with ease.
One problem for many traders is that of risk management and this too is reduced as we move to automatic Forex trading. Manual systems often leave traders nervous about whether or not payment will be made after the completion of a trade but as payments can now be synchronized in real time this is far less likely. Indeed, as the automated trading system continues to develop it is clear that the settlement system will also be updated and such risks are likely to be all but eliminated in the near future.
Computer technology has advanced by leaps and bounds over the past few years and will continue to do so for many years to come. More importantly, access to that technology easily and cheaply from the comfort of our own homes and now the ability to access the best mini Forex fully automated trading means that we can all now manage our own investments with ease. For those in the currency trading world automated Forex day trading will certainly come as a welcome addition to an already great investment vehicle.
What is Forex Scalping?
The forex market is the most liquid of today's exchange, trading in excess of 1.6 trillion dollars daily. This is roughly greater than 5 times the daily trading volume of the U.S. Treasury Bond Market, and 160 times the average daily volume of the U.S. Stock Market. This extreme liquidity gives forex traders an edge in the art of lightning fast execution and the quick trade method referred to as "scalping". Forex scalping is the art of using high leverage and a large number of short term trades to steadily increase an account. Usually, only 1 to 5 pips are targeted for each trade. This type of trading appeals greatly to day traders and those looking to minimize the risk involved in trading currencies.
Next to money management, "risk control" is the single most important trait to a surviving (and thriving) currency trader. The small amount of time that is spent in the market limits much of the risk in exposure in comparison to a longer term system. Also, the freedom involved in a speedy forex scalping system in such a liquid market is a "magnet" that drives many traders from other markets to try their hand in currency. A disciplined and steady scalper could seamlessly double or triple an account, and spend only a fraction of the time in the market as a common day trader. Though forex scalping may seem like a preverbal "holy grail" at first glance, there are still many unseen hurdles that surround the controversial method of trading. If you do wish to add scalping to your trading toolbox, it is extremely important to pick a broker who can support a scalpers' system. You will quickly find that many brokers do not allow scalp trading, as the method of quickly entering and exiting trades may actually cause the broker to lose money at the dealing desk. Forex scalping also does not give the broker a means to trade against their clients. Out of the hundreds of online forex brokers, only a handful support (and sometimes encourage) scalping. Effective forex scalping strategies take advantage of extremely slight price fluctuations (sometimes only 1-3 pips) many times in order to steadily build an account. Because of the smaller number of pips gained per trade, larger than normal leverages play a key role in a successful forex scalping strategy. By leveraging much more than a standard day trader in a liquid environment, a very skilled scalp trader is able to make just as much money as the day trader in a shorter period of time. However, this is an obvious double-edged sword. The market can just as easily move against you on a high leverage, which could produce substantial blows to your account. Also, it is important to take into consideration the physical and mental speed of a trader who will only stay in the market for seconds to minutes. Executing a scalping strategy by hand can be extremely difficult considering the quick amount of time you must be in and out of the market for your strategy to be affective Many successful forex scalping strategies are built to be automated; the rules to the system are coded into a trading platform to automatically perform scalp trades around the clock. Though it is completely possible to trade a forex scalping strategy manually, the majority of today's traders would agree that automating the process based on a set of rules would be the best way to ensure speed and reliability.
When choosing a platform to automate your scalp strategy, it is extremely important to stick with those platforms that allow the execution of your system on every tick (such as MetaTrader 4). This ensures that your entrances and exits will be on a per-tick basis, and will give you a much higher probable rate of success than those platforms who will execute your code more periodically.
Friday, September 4, 2009
Master the Number 1 Forex Dealing Platform: Mt4 platform
Most attention should be paid to the Metatrader 4 summary line, It provides a trader an idea of what is going on on the account as: Balance means account balance including recent proceeds, but hovering profit/loss not integrated, Equity means same balance but after floating profit/loss integrated, Margin means the amount of your deposit laid out for your open orders, FREE MARGIN is the amount of protection against the market and the amount of your Equity that is not consumed yet, and also not been consumed by your losing positions, When you run out of FREE Margin, one or more of your better positions will be liquidated resulting on brutal loss ! To avoid margin calls do not use more 10% of your buying or selling strength and you should be able to endure normal market conditions, If market is very unpredictable use only 5% of your Free margin. Before you run out of Free Margin you have the choice to slam positions with least losses to Free Margin, After you run out of FREE margin most losing positions will be closed in order to free margin in the account.
A lot of novice traders start with this software by opening a Forex deal without any thought on how to secure the trade. I have seen this happening, There is a switch to open a trade but there is no button to close the trade, because once the trade is shown in the terminal window it can be double clicked to show the close trade switch.
If you choose Metatrader 4 as your trading platform of choice you should do some inquiries on Currencyy trading brokers, download to your computer their Metatrader platforms and try it on virtual accounts. After practicing for few months you should have an outline of the superior brokers so it would be time to evaluate one of these brokers on a small live account, followed by a comparison between the virtual and real accounts of this broker, pay attention to requote requests and times you get tiring trade context errors and no tie errors. Begin your ordinary Forex account with the broker who's practice account mimics the live account paramount. pass up brokers who have big differences between demo and live accounts. No matter how a good trader you turn into, practicing in virtual accounts should be perpetual to master International currency.
The Mt4 now happen to be at release 4 with newer updates coming irregularly from your broker, Version 5 should become offered shortly this annual and is likely to be more than just a revise, it is going to be an immense improvement.
Forex Trading - 3 Power Strategies
If you want to catch the serious profit in forex dealing you need to trend watch forex trends which are worse term. here we are going to give you a 3 step simple method which if you use it correctly, will help you catch every superior forex trend and lead you to long-term term currency dealing success.
Most beginner traders don't bother trying to trend following forex lengthier term - instead they try forex scalping or day trading. These methods focus the trader on small moves and they hope to catch small profit however as most short term moves are random, this leads to equity eliminate.
The other alternatives are swing trading and long term forex trend following and this article is all about the latter method. If you look at any forex chart, you will see long-term term trends that last for months or years. These moves can and do yield serious profit - present we will outline a simple method to get them.
Breakouts
By far the best way of catching the serious moves is to use a forex dealing strategy based around breakouts. A breakout is simply a move on a forex chart where a new high or low is made and resistance or support is broken.
It's a fact that most leading moves start from new highs or lows.
While it might appear that you are not buying or selling at the greatest level, you are in terms of the odds of the trend continuing. Most forex traders make the mistake of waiting for the breakout to come back and get in at a better price but these traders never get on board. The grounds for this is if a breakout occurs, then you have a new strong trend and a pullback is not very likely to occur.
Most traders don't buy or sell breakouts and that's exactly why it's such a powerful method.
The only point to keep in mind is a support or resistance which is ruined, should be valid and that means at least 3 points in at least 2 different times frames. The more tests and the greater the spacing between the tests the more valid the level is.
Confirmation
Of course not every breakout keeps and some reverse, these are false and can cause losses. You therefore need to confirm each move. All you need to do to achieve this is to put a few momentum indicators in your forex trading system to confirm your dealing signal.
These indicators give you an estimation of the strength and velocity of price and there are many to choose from. We don't have time to discuss them here (simply look up our other articles) but two of the greatest are - the stochastic and Relative Strength Index RSI
Stops and Targets
Stop points are easy with breakouts - Simply behind the breakout point.
If you have a serious trend then you need to be careful you can milk it, so don't move your stop to soon and keep it outside of normal volatility. If it is a huge move, trailing stops should be held a long-term way back and the 40 day moving average is a good level to use.
You have to keep in mind that when the trend does eventually turn you are going to give some profit back. You don't know when the trend is going to end, so don't predict.
It's ok to give a serious back, as that's the nature of trading forex. Keep in mind if you got 50% of all leading trend you would be very rich. When you are long-term term trend following you have accept giving a bit back and taking dips in open equity as the trend develops - this is noise and does not affect the long term trend.
The above is a simple way to trend watch forex and catch the high odds moves that yield the serious profit. If you are learning forex dealing and want a simple method that is robust and will help you get every major move, then you should base your dealing on the above method.
Now that you have all the winning strategies, you now need to have a winning broker, recently the
Trade Forex Online: Factors to consider
The value of a country's currency is influenced by a number of factors: The economics of the country, its trade deficit, political and social environment.
If the current government's deficit increases, its currency's value will fall. As the government decreases its deficit, the currency can begin to recover value and the exchange rate will become more favorable. The same relationship holds true with a country's trade deficit. If the country imports more goods and services than it exports it will have a negative influence on the currency.
Inflation lessens the ability of a unit of currency to buy less and less, so the currency loses value. If the inflation becomes rampant the currency is valued less because it's also viewed as unstable. As the rate of inflation begins to decline the currency begins to increase in value.
Politics and social changes can play havoc with the currency exchange rates. Changes in the regime that are viewed negatively can lower the value of the country's currency in the short term and continue into the long term. If the present government makes decisions that are looked at negatively it can decrease the currency value as well. The opposite can happen. Current government officials can make policy changes that are viewed positively by the rest of the world and that can increase the value of the currency.
For the United States, interest rates and the price of oil can have a major impact on the value of the US dollar.
Interest rates effect how much it's going to cost to borrow money and how much can be earned on investments. Historically if the US raises its interest rates it attracts foreign investors. Those investors have to sell their own currency in order to buy U.S. dollars to purchase treasury bonds. If the interest begins to drop, or the perception is that the rates won't rise any more, investors may purchase Euros as an alternative investment which lowers the value of the US dollar.
The United States is dependent on foreign oil production. Many US industries are dependent on oil and an increase in the price of oil means an increase in their expenses and a drop in profits. In a similar way, a country's dependency on oil influences how the country's currency is valued and will be impacted by changes in oil prices. The US's dependency on oil makes the dollar more sensitive to oil prices than countries who aren't so dependent. As the price of oil increases the value of the dollar drops.
Forex Trading System - A Key To Successful Forex Trading And Trading For A Living
Learning to trade stocks requires some skill but it also requires you to shed some of your ingrained, inbred emotions. It's these very emotions that caused me to sell stocks too early in by beginning days of trading. I have overcome these emotions now and I have a set of rules that I follow religiously. That doesn't mean that I can't change the rules of my system but I have to give myself a good reason to do so. If I don't change my system than I stick to them. That is how I keep emotions out of the equation.
The most important way to help yourself when learning to trade stocks is to come up with your own system and practice. But practicing with real money can be costly. Some people refer to this as your tuition but what if you could avoid putting real money on the line and still get the practice you need?
A way to do that is by a concept known as paper trading. Now, there are critics of paper trading that state that because you are not putting real money on the line you will not have the same kinds of emotions that you would had you put your hard earned cash in. They also state that you will not get the same kind of fills that you would when you trade for real. There is some truth to these statements but it shouldn't stop you from pursuing paper trading because there are ways to reduce the aspects of paper trading that are criticized.
To counter the first item, paper trading is still experience. Yes, the emotions are not the same but what you are really doing is trying to get a feel for whether your system is working or going to work. The second item's counterpoint is if you take the midpoint of the bid and ask at any given time of the day or at the close, you would likely get filled at those levels had you traded real money. That's because it falls within the range of the bid/ask spread. I have used this technique when trading for real and with the exception of super fast moving stocks, I almost always got filled.
I think if you want to go about learning to trade stocks you need a system and you need to be able to practice trading. You want to be able to do both of these without putting up a whole lot of capital (none if you can get away with it). One system that I have found that is indispensible and reliable is the CANSLIM method. This method has been helping people learning how to trade stocks to profit.
Forex Trading System - A Key To Successful Forex Trading And Trading For A Living
Every one has his days when no matter how well he has planned out his trades, he may find some of his trades not performing to what is planned. It is only natural for one to feel upset, but for the follower of a forex trading system, making money or losing money from that trade is not the paramount objective.
Why is this so?
For the trader who employs a forex trading system, he can still face the losing trade with a smile, because he has had followed through the trading signals in a disciplined way, and it is only when a trader follows a system, he can be sure of keeping his losses small and to live to trade again another day.
By using a forex trading system, the trader can have a cool head, and can face his trades rather unemotionally. He can execute his trades following pre-determined price levels of initial stop loss, trailing loss and computed and projected price profit.
He knows his tolerable level of loss, his threshold of pain - and of course, his risk to reward ratio even before he trades.
Now when a trader has a trading system and follows through the trading plan, making profits is a natural result when he makes a correct trade. But when his trade is wrong, his forex trading system will very quickly show him that the direction of his trade is wrong, so that he is out of the game fairly quickly.
I am often flabbergasted at some very broad claims of some traders who condemn day trading systems and relegate them to the garbage bin. When you look at forex trading systems, review them quickly by peer recommendation whenever possible. By peer recommendation, I mean you can ask existing traders their experience on the trading system, and how they are doing with it. Posting to the numerous reliable trading forums will allow you to receive some independent reviews fairly quickly. At the same time, my personal experience, and that of many other professional traders is that day trading can be profitable, though it is never easy to day trade. Otherwise, how is it that so many day traders are able to earn their income day trading the short swings of the market daily for a living? So it is important for you to have a broad view of forex trading systems if you are contemplating of learning or purchasing any trading system that relates to day trading.
If you ever wish to trade successfully, whether you day trade or swing trade, it is important that you have a trading system that will allow you to approach trading in a disciplined manner. It is only when you are a disciplined trader that you can see consistent large gains and small losses.
forex signal provider? which one?
Face the fact that in currency market all is possible and there is no golden rule to follow. There are so many aspects to consider that you will need at least another head to set this puzzle together.
But do not worry there is a hope that can make it work.
Signal solutions for forex trading. People who traded forex for a long time and developed their own systems to enter and exit with profit strategies. They will share this knowledge with you for varieties of prices from usd49 to usd499 a month for those precious information. Problem is which one will suit you best. Are they scams? How do I know?
For medium advanced forex trader is almost impossible to choose proper forex signal system, which is not a scam, or at least not profitable. There is bulk of forex signals providers out there. They all offer their signal solution to trade currency with success.
Advice is that you will have to establish what type of trader are you? Do you want to trade quickly or maybe over the days or weeks? What losses can you manage and how much money you want to invest.
As long as you know al that it is a time to pick up signal trade provider.
Few things worth researching are: performance, service offered and rewievs of the signal. Search on forum for another users of the product you are interested in and ask for comment. Every profitable system should be up on collective2 with real track performance. Look for service offered. You will quickly find out that only few offer free trail-option to try signals before you pay. Demand performance evidence.
But while doing all that hard work choosing your automat forex signal system remember that you will have to totally follow it without exceptions to make most out of it. Any even small innovation may have dramatic results in your own gains.
Remember that your future profits will depend on your signal provider so calculate carefully and make smart decisions.for more go to http://www.rorexmoneysignal.com
Forex Trading Signal - A Free Simple to Understand Equation Which Makes Big Profits
The signal doesn't even need trading software to generate it, you can actually do it in your head. The signal is credited to famous trader Richard Donchain who is considered the grandfather of modern trend following and he called it the four week Rule and this is the rule
1. When prices move to a new 4 month high buy a currency and hold it.
2. Wait for a new 4 week low to occur, liquidate the long and take a short position.
3. Always maintain a position long or short in the market and simply reverse on each new 4 week high or low.
The above rule could not be simpler but it works and if you test it, you will see how much money it makes and the reason it works is because it works on two pieces of logic which will never go out of date and there the following:
1. Markets trend up or down for sustained periods of time.
2. All major trends start and continue from major breakouts
This system over the long term, will catch a good chunk of profit from every major trend but despite the fact it works most traders won't use it for the following reasons:
1. They prefer the get rich quick route and buy a cheap automated software package with no independent verification of gains instead, the above Forex trading signal is proven and has a real track record over a quarter of a century.
2. It takes discipline to follow as its long term and traders have a problem with holding long term trends, they think trading frequently means more profits and its clear this is not true.
3. Most traders simply pass it buy because they think a signal so simple cant work but of course all the best systems are simple because they are so robust.
The 4 Week Rule, as stood the test of time and any trader can use it to seek Forex trading success. In the next article in this series we will look at how to add filters to the above trading signal to make it even more effective and also look at some of Richard Donchian's other Forex trading tools.
Wednesday, September 2, 2009
How To Get Started In Forex Trading
You may have been hearing about the foreign exchange market (Forex) and the investment advantages it offers. You would like to try it out, but don't know where to start. This short guide will give you the basics in Forex and tell you what you need to participate in this fast growing field.
Foreign exchange used to be limited to large players such as national banks and multi-national corporations. In the 1980's the rules were revised to allow smaller investors to participate using margin accounts. Margin accounts are the reason why Forex trading has become so popular. With a 100:1 margin account, you can control $100,000 with a $1,000 investment.
Forex is not simple, however, and education is needed to make wise investment decisions. Although it is relatively easy to start trading on the Forex, there are risks involved, so finding out as much as possible about the market is a good move for any beginner.
Forex traders usually require a broker to handle transactions. Most brokers are reputable and are associated with large financial institutions such as banks. A reputable broker will be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) as protection against fraud and abusive trade practices.
Opening a Forex account is as simple as filling out a form and providing the necessary ID. The form will include a margin agreement that states that the broker can interfere with any trade it deems to be too risky. This is to protect the interests of the broker — most trades, after all, are done using the broker's money. Once your account has been established, you can fund it and begin trading.
Many brokers have different types of accounts to suit the needs of individual investors. Mini accounts allow you to get involved in Forex trading for as little as $250, while standard accounts may have a minimum deposit of $1000 to $2500 depending on the broker. The amount of leverage — using borrowed money — varies with accounts. High leverage gives you more money to trade for a given investment.
HOWEVER — beginner traders are advised get accustomed to Forex by doing paper trades for a period of time. Paper trades are practice transactions that don't involve real capital. They allow you to see how the system works while learning how to use the various software tools that are at provided by most Forex brokers.
Most online brokers have demo accounts that allow you to make free paper trades for up to 30 days. Every new Forex investor is strongly advised to use these demo accounts at least until they are showing consistently steady profits.
Each broker has their own set of software tools to aid in making transactions, but there are a few tools that are common to all Forex brokers. Real time quotes, news feeds, technical analyses and charts, and profit and loss analyses are some of the features you should expect to see on most online brokers' web sites.
Almost every broker operates on the Internet. To access their online services you should have a reasonably modern computer, a fast Internet connection, and an up-to-date operating system such as Windows XP. Once your account is set up, you can access it from any computer — just enter your account name and password. If for some reason you are not able get access to a computer, most brokers will allow you to make trades over the phone.
Trades are commission free, meaning that you can make many trades in one day without worrying about incurring high brokerage fees. Brokers make their money on the 'spread' — the difference between bid and ask prices.
Online Forex Trading
Do you know what Forex trading is? Some people have heard of this type of trading, others have not. If you haven't, it might be something you are interested in trying. Forex trading stands for foreign exchange trading. What it consists of is the buying and selling of different currencies. This is done simultaneously, and there are people who make a lot of money with this kind of trading. This is apparent by the 1.9 million dollar turnover in this market that happens every day. Also a lot of it is done online. Online Forex trading is very popular.
The most common currencies to trade are the Euro and the U.S. dollar, and the U.S. dollar and the Japanese Yen. However, nearly all of the Forex trading done involves the major currencies of the world. These include the Euro, Japanese Yen, U.S. dollar, Canadian dollar, British Pound, Australian dollar, and the Swiss franc. The Forex exchange is different from other exchanges, such as the New York Stock Exchange, in that it does not have a physical location or central exchange. The exchange day begins in Sydney, then moves to Tokyo, on to London, and finally ends in New York. Each country takes the responsibility of regulating the Forex exchange activities in their own country. So there is no overall regulatory agency. However, this does not seem to be a problem and most countries do very well at overseeing Forex exchange activities.
There are a lot of things that influence the Forex rate. For instance, economic things, like interest rates and inflation, and also political things, such as political unrest in other countries and major changes in government cause up and down changes in the Forex rate. However, these things tend to be short-term, and don't affect it for long.
Online Forex trading sites are easy to find by surfing the Internet. Most of them provide a wealth of information for the first time trader. You can find out about the history of Forex trading, how to co it, tips on being successful, etc. You can also start trading with as little as $250 in your account on some sites. For anyone who is interested in currency or trading, it is something you should check out.
As with any type of trading, there are no guarantees that you will make money or that you won't make money. It is a smart choice to learn as much as you can about online Forex trading before investing any money and doing any trading. It is a fact that informed investors do better than those who don't know much about what they are trading. So get the fact before you dive in. You might just make a little money in a very interesting currency exchange.
Learn Currency Trade — Intro to The FOREX Market
The Foreign Exchange Market — better known as Forex — is a world wide market for buying and selling currencies.
It handles a huge volume of transactions 24 hours a day, 5 days a week. Daily exchanges are worth approximately $1.5 trillion (US dollars). In comparison, the United States Treasury Bond market averages $300 billion a day and American stock markets exchange about $100 billion a day.
The Foreign Exchange Market was established in 1971 with the abolishment of fixed currency exchanges. Currencies became valued at 'floating' rates determined by supply and demand. The Forex grew steadily throughout the 1970's, but with the technological advances of the 80's Forex grew from trading levels of $70 billion a day to the current level of $1.5 trillion.
The Forex is made up of about 5000 trading institutions such as international banks, central government banks (such as the US Federal Reserve), and commercial companies and brokers for all types of foreign currency exchange.
There is no centralized location of Forex — major trading centers are located in New York, Tokyo, London, Hong Kong, Singapore, Paris, and Frankfurt, and all trading is by telephone or over the Internet. Businesses use the market to buy and sell products in other countries, but most of the activity on the Forex is from currency traders who use it to generate profits from small movements in the market.
Even though there are many huge players in Forex, it is accessible to the small investor thanks to recent changes in the regulations. Previously, there was a minimum transaction size and traders were required to meet strict financial requirements. With the advent of Internet trading, regulations have been changed to allow large interbank units to be broken down into smaller lots.
Each lot is worth about $100,000 and is accessible to the individual investor through 'leverage' — loans extended for trading. Typically, lots can be controlled with a leverage of 100:1 meaning that US$1,000 will allow you to control a $100,000 currency exchange.
There are many advantages to trading in Forex, including:
— Liquidity: Because of the size of the Foreign Exchange Market, investments are extremely liquid. International banks are continuously providing bid and ask offers and the high number of transactions each day means there is always a buyer or a seller for any currency.
— Accessibility: The market is open 24 hours a day, 5 days a week. The market opens Monday morning Australian time and closes Friday afternoon New York time. Trades can be done on the Internet from your home or office.
— Open Market: Currency fluctuations are usually caused by changes in national economies. News about these changes is accessible to everyone at the same time — there can be no 'insider trading' in Forex.
— No commission Fees: Brokers earn money by setting a 'spread' — the difference between what a currency can be bought at and what it can be sold at.
How does the foreign currency exchange market work?
Currencies are always traded in pairs — the US dollar against the Japanese yen, or the English pound against the euro. Every transaction involves selling one currency and buying another, so if an investor believes the euro will gain against the dollar, he will sell dollars and buy euros.
The potential for profit exists because there is always movement between currencies. Even small changes can result in substantial profits because of the large amount of money involved in each transaction.
At the same time, it can be a relatively safe market for the individual investor. There are safeguards built in to protect both the broker and the investor and a number of software tools exist to minimize loss.
The Benefits of Trading The Forex Market
Historically, the FX market was available most to major banks, multinational corporations and other participants who traded in large transaction sizes and volumes. Small-scale traders including individuals like you and I, had little access to this market for such a long time. Now with the advent of the Internet and technology, FX trading is becoming an increasingly popular investment alternative for the general public.
The benefits of trading the currency market:
It is open 24-hours and it closes only on the weekends;
It is very liquid and efficient;
It is very volatile;
It has very low transaction costs;
You can use a high level of leverage (borrowed money) with ease; and
You can profit from a bull or a bear market.
Continuous, 24-Hour Trading
The currency exchange is a 24-hour market. You may decide to trade after you come home from work. Regardless of what time-frame you want to trade at whatever time of the day, there would be enough buyers and sellers to take the other side of your trade. This feature of the market gives you enough flexibility to manage your trading around your daily routine.
Liquidity And Efficiency
When there are a lot of buyers and a lot of sellers, you can expect to buy or sell at a price that is very close to the last market price. The currency market is the most liquid market in the world. Trading volume in the currency markets can be between 50 and 100 times larger than the New York Stock Exchange (Source: Oanda.)
When you are trading stocks, you may have experienced events where one piece of news accelerates or decelerates the price of the underlying stock you may have bought into. Perhaps a director has been kicked out by the shareholders of a company or the company has just released a new product and big investors are buying the shares of a particular company. Share prices can be drastically affected by the actions or inactions of one or a few individuals. So if you are relying on television reports and newspapers to get your news, most of the opportunities or warnings will have come too late for you to take advantage by the time you get them.
The value of currencies on the other hand is affected by so many factors and so many participants that the likelihood of any one individual or group of individuals drastically affecting the value of a currency is minute. Because of its sheer size, the currency market is hard to manipulate. The ability for people to engage in 'insider trading' is virtually eliminated. As an average trader, you are less disadvantaged. You are likely to be playing on relatively equal ground along with all the other traders and investors whom you are competing against.
Note about price gaps:
For those people who have already traded other markets, you probably know about price 'gaps'. 'Gaps' occur when prices 'jump' from one price level to another without having taken any incremental steps to get there. For example, you may be trading a share that closes at $10 at the end of today but due to some event that happens overnight; it opens tomorrow at $5 and continues to go downwards for the rest of the day.
Gaps bring about another degree of uncertainty that may meddle with a trader's strategy. Probably one of the most worrying aspects of this is when a trader uses stop-losses. In this case, if a trader puts a stop-loss at $7 because he no longer wants to be in a trade if the share price hits $7, his trade will remain open overnight and the trader wakes up tomorrow with a loss bigger than he may have been prepared for.
After looking at a couple of forex charts, you will realize that there are little price 'gaps' or none at all, especially on the longer-term charts like the 3-hour, 4-hour or the daily charts.
Volatility
Trading opportunities exist when prices fluctuate. If you buy a share for $2 and it stays there, there is no opportunity to make a profit. The magnitude of level of this fluctuation and its frequency is referred to as volatility. As a trader, it is volatility that you profit from. Large volume transactions and high liquidity combined with fewer trading instruments generate greater intra-day volatility in the currency market that can be exploited by day-traders. The high volatility of the currency market indicates that a trader can potentially earn 5 times more money from currency trading than trading the most liquid shares.
Volatility is a measure of maximum return that a trader can generate with perfect foresight. Volatility for the most liquid stocks are between 60 to 100. Volatility for currency trading is 500. (Source: Oanda.)
In this respect, currencies make a better trading vehicle for day-traders than the equity markets.
Low Transaction Costs
A currency transaction typically incurs no commission or transaction fees. For a forex trader, the spread is the only cost he or she needs to cover in taking on a position. In addition, because of the currency market's efficiency, there is little or no 'slippage' costs.
'Slippage' is the cost involved when traders enter the market at a price worse than the level they wanted to get into. For example, a trader wants to buy a share at $2.00 but by the time, the order gets executed, his gets to buy the shares at $2.50. That fifty cents difference is his slippage cost. Slippage cost affects large-volume traders a lot. When they buy large quantities of a commodity, it oversupplies the market with buy orders. This applies a pressure for the price to go up. By the time they get to buy all the quantities they wanted, the average price they got their commodities would be higher than the price they intended to get them for. Conversely, when they sell large quantities of a commodity, they oversupply the market with sell orders. This applies a pressure for the price to go down. By the time they finish selling all their commodities, their average selling price is less than what they initially intended to sell them for.
Due to lower transaction costs, minimum slippage and strong intra-day volatility, individuals can trade frequently at small costs. As an approximate, you may only expect to have a spread of 0.03% of your position size. To give you an example, you can buy and sell 10,000 US Dollars and this will only incur a 3-point spread, equivalent to $3.
Leverage
There are not a lot of banks or people who would lend you money so that you can use it to trade shares. And if there are, it would be very hard for you to convince them to invest in you and in your idea that a certain share is going to go up or down. Therefore, most of the time, if you have a $10,000 account, you can only really afford to buy $10,000 worth of stocks.
In currency trading however, because you use 'borrowed money', you can trade $10,000 of a currency and you only need anywhere between fifty (For a margin lending ratio of 200:1) to two hundred dollars ( For a margin lending ratio of 50:1) in your trading account. This makes it possible for an average trader with a small trading account, under $10,000 to be able to profit sufficiently from the movements of the currency exchange rates. This concept is explained further in The Part-Time Currency Trader.
Profit From A Bull And Bear Market
When you are trading shares, you can only profit when the price of a stock goes up. When you suspect that it is about to go down or that it is just going to be moving sideways, then the only thing you can do is sell your shares and stand aside. One of the frustrations of trading shares is that an individual cannot profit when prices are going down. In the currency market, it is easy for you to trade a currency downward so that you can profit when you think it is going to lose value. This is easy to do because currency trading simply involves buying one currency and selling another, there is no structural bias that makes it difficult to trade 'downwards'. This is why the currency market has been occasionally referred to as the eternal bull market.
Trading Forex To Advance Your Financial Position
Everyday, currencies are traded in an international foreign exchange market, otherwise known as the forex market, with the main marketplaces (otherwise known as bourses) existing in the world's financial centes New York, London, Tokyo, Frankfurt and Zurich. Historically, the only way to participate was from the trading floor of one of these bourses, but today, people can trade forex from anywhere through a secure internet connection and a PC.
Today's traders operate in a global network, taking positions in the market and making investment decisions based on either relative value between two currencies, or a particular currency's actual price. Currency value fluctuations are constantly renegotiated through trading activity, and this activity, and the corresponding currency values are also indicators of the levels of currency supply.
An example of market behaviour greater demand for the Euro might indicate a weakening supply. Low supply and increased demand will drive the price of the Euro up against other currencies like the dollar, until the price better reflects what traders are prepared to pay when short supply exists. Another way to look at this situation is this higher demand means it will cost more dollars to buy the Euro, which equates to a weakening of the dollar in comparison. Analysis of situations such as in this example forms the basis for a trader's investment decisions, and they will purchase or sell currency accordingly.
This should be remembered, as while many see the foreign exchange market as the vehicle for converting their home currency while travelling abroad, many others choose to use the market to advance their financial position and secure their future.
Forex Trading
So what is is Forex trading you may ask? Forex is the exchange you can buy and sell currencies. For example, you might buy British pounds (by exchanging them to the dollars you had), then, after pounds / dollar ratio goes up, you sell pounds and buy dollars again. At the end of this operation you are going to have more dollars, then you had at the beginning.
The Forex market has much higher liquidity, then the stock market, as much more money is being exchanged. Forex is spread between banks all over the planet and as a result it means 24 hour trading.
Unlike stocks, Forex trades are performed with high leverage, usually it is 100. It means that by investing $1000 you can control $100,000, and increase potential profits accordingly. Some brokers provide also so called mini-Forex, where the size of minimum deposit equals $100. It makes possible for individuals to enter this market easily.
The name convention. In Forex, the name of a "symbol" is composed of two parts — one for first currency, and another for the second currency. For example, the symbol usdjpy stands for US dollars (usd) to Japanese yen (jpy).
As with stocks, you can apply tools of the technical analysis to Forex charts. Trader's indexes can be optimized for Forex "symbols", allowing you to find winning strategy.
Example Forex transaction
Assume you have a trading account of $25,000 and you are trading with a 1% margin requirement. The current quote for EUR/USD is 1.3225/28 and you place a market order to buy 1 lot of 100,000 Euros at 1.3228, expecting the euro to rise against the dollar. At the same time you place a stop-loss order at 1.3178 representing a maximum loss of 2% of your account equity if the trade goes against you, 50 pips below your order price, and a limit order at 1.3378, 150 pips above your order price. For this trade, you are risking 50 pips to gain 150 pips, giving you a risk/reward ratio of 1 part risk to 3 parts reward. This means that you only need to be right one third of the time to remain profitable.
The notional value of this trade is $132,280 (100,000 * 1.3228). Your required margin deposit is 1% of the total, which is equal to $1322.80 ($132,280 * 0.01).
As you expected, the Euro strengthens against the dollar and your limit order is reached at 1.3378. The position is closed. Your total profit for this trade is $1500, each pip being worth $10.
Forex Enterprise — A Full Review
A new marketing course to hit the internet by Nick Marks that advertises earnings of $1000 a day and $30,000 a month respectively. This turnkey system generating multiple streams of income is relatively new and so it is my pleasure to review it for you.
After purchasing you are given a login page where you are introduced to the system which is in website format. Everything is easy to access and well organized.
After Nick gives you a little pep talk about positive thinking and goal setting, you will be introduced to his first recommendation: join Coastal Vacations. While not a part of his main Forex system this is a recommendation I could've done without.
In the pay per click section you are given a large list of keywords that Nick found convert really well with his system. Some of the keywords in the list have bid prices already attached to them so you can get front page exposure.
The course also has $50 in free adwords credit that unfortunately only works with new accounts so I was out of luck. If you don't already have an account this is worth the price of the course alone.
The forex course shows you some inexpensive traffic methods and provides links to these sources. He also covers stuff like pop-over ads, e-mail lists and autoresponders. Not bad information by any means, and is an alternative to pay per click advertising if you have a smaller budget.
He has an ebook package that seemed like it was going to be really cool as there were dozens of bonus ebooks and software programs covering everything from creating ebooks and website templates, to getting top positions in the major search engines.
As I took a closer look at this package I realized there were some bargain bin informational products included. However, there were also alot of goodies in there as well that I found rather useful. You get so many ebooks and software in here that it really is worth far more than the price of the course.
There is a section on becoming an Ebay power seller in 90 days that goes into a fair amount of detail and wasn't bad. However, Ebay isn't something I have ever been particularly interested in doing. There is also a section on baccarat strategies that I had no interest in.
One of the last sections of his course introduces you to e-currency exchanging using the DXINONE system. It is a great way to acquaint yourself with this increasingly popular opportunity without having to buy standalone e-currency courses which can cost a couple hundred dollars.
The author has combined several effective ways to earn money online and rolled them all into one course. While I didn't jump up and down about all of his strategies, the free ebooks, software, and adwords credit make Forex Enterprise worth the money.
Forex Avenue: The Road to Riches
In my continuing quest to provide visitors of my site with a large amount of options to chose from when considering working from home I have done some research on Forex trading. I first learned of Forex trading while pursuing my MBA program. For those of you who have never heard of this, Forex trading is the exchange of foreign currency.
I know I would have never even know this was an option for making money had I not found out in class. Most of the really big corporations have departments of people that do this for a living because it can be very lucrative if done correctly. The best news I have learned about this process of exchanging currencies is that many of the websites that you can sign up with to do this offer free trial accounts to help you learn before you invest your money into trying it. You won't make any money in the trial accounts if you do well, it is just pretend money essentially but with the real market conditions. If you do well in the trial account you will know if this is something you want to try on your own.
Benefits to Forex trading are that is can be done 24/7 whereas the stock market is a business hours only exchange. It is 24/7 because it is done with countries around the world so clearly there are countries that are awake and working while we sleep. Another benefit is you are in control of the trading on your account. You do not need to hire a licensed broker to make your trades and charge you fees. Along those same lines, anyone who does any investing most likely knows that some funds require you to own then for a certain period of time or pay early withdrawal fees. You do not need to concern yourself with this either. One last benefit that I would like to point out is the fact that Forex is not really subject to the same kinds of swings in the market that stocks are subject to. Of course if you always buy and sell the same currencies then there will be market swings. But, because there are hundreds of currencies out there, there is always going to be something for you to make money on because while one currency is up in value another one is down and vice versa.
There are many resources available to someone interested in becoming involved in this type of training. The Federal Reserve Bank's website is just one example of the information available — http://www.ny.frb.org/markets/foreignex.html. Here is another article that you will find helpful in starting out in this field. http://www.forex.com/pdf/pro2.pdf . I have also included one of the sites that does offer a free lesson.
While there are many benefits to this type of training, as I mentioned above, there are certainly risks involved as well. There are risks with exchange rates, central banks in foreign countries, and risks involving interest rates and credit. Forex is quickly becoming a popular way to help diversify your investment portfolio. If you are good with understanding investing concepts and enjoy doing it this may be the home business opportunity for you. Just do your research and try to find one of the sites offering the free trial account to practice with and you are well on your way down the Road to Riches.
Why Trade the FOREX?
My purpose for writing this article is to demonstrate to you the advantages of trading on the Forex market. However, there is one myth that I want to dispel before I go further. The myth is that there is a difference between trading and investing. To dispel that myth I quote from Al Thomas, President of Williamsburg Investment Company, who wrote "If It Doesn't Go Up, Don't Buy It". He said "Everyone who invests is a trader, only the time period is different." It is a lesson that I took seriously after taking a beating in the stock market in 2000.
So now, let's compare features of currency trading to those of stock and commodity trading.
Liquidity — The Forex market is the most liquid financial market in the world around 1.9 trillion dollars traded everyday. The commodities market trades around 440 billion dollars a day, and the US stock market trades around 200 billion dollars a day. This ensures better trade execution and prevents market manipulation. It also ensures easily executable trading.
Trading Times — The Forex market is open 24 hours a day (except weekends) which means that in the US it opens at 3:00 pm Sunday (EST) and closes Friday at 5:00 (EST), allowing active traders to choose the times they want to trade. Commodities trading hours are all over the board depending on which commodity you are trading. Including extended trading times US stocks can be traded from 8:30 am to 6:30 pm (ET) on weekdays.
Leverage — Depending on your Forex account size, your leverage may be 100:1, although there are Forex brokers that offer leverage of up to 400:1 (not that I would ever recommend that kind of leverage). Leverage in the stock market can be as high as 4:1, and in the commodities market, leverage varies with the commodity traded but it can be quite high. Because the commodity markets are not as liquid as the Forex market, its leverage is inherently riskier. Although I was never shut out of a commodity trade by the day limit, the fear was always in the back of my mind.
Trading costs — Transaction costs in the Forex market is the difference between the buy and sell price of each currency pair. There are no brokerage fees. For both the stock and the commodity markets, there are transaction costs and brokerage fees. Even when you use discount brokers, those fees add up.
Minimum investment — You can open a Forex trading account for as little as $300.00. It took $5,000 for me to open my futures trading account.
Focus — 85% of all trading transactions are made on 7 major currencies. In the US stock market alone there are 40,000 stocks. There are just over 200 commodity markets, although quite a few are so illiquid that they are not traded except by hedgers. As you can see, the fewer number of instruments allows us to study each one more closely.
Trade execution — In the Forex market, trade execution is almost instantaneous. In both the equity and commodity markets, you count on a broker to execute your trades and their results are sometimes inconsistent.
While all of these features make trading the Forex market very attractive, it still requires a lot of education, discipline, commitment and patience. All trading can be risky.
Explosive Profits: 7 Reasons to Trade Forex
There are many money-making opportunities out there and we've been involved with quite a few, namely property marketing, web development, residential construction security, multi-level marketing businesses etc.
We've come to a few conclusions with the help of some well-known properity coaches.
Often people with the income they desire don't have the time to enjoy it. Those that have time don't often have money. You don't have to sacrifice your life-style to earn an above-average income. If you focus on the for a few months you can make that dream a reality and create time and money to do what you REALLY want.
To earn a living money is given in exchange for a product or service rendered. It needs to be sold continuously otherwise your income stops abruptly unless it's a repeat type of product or service.
Money is a medium of exchange. There's no magical formula to possess it, you need to exchange something of value for it.
What if, you could have access to thousands of customers who are ready, willing and able to buy from you whenever you wanted? Wouldn't it be great to avoid any hassles like money collection problems (just had a delayed payment from my web business), keeping difficult customers happy (we all know what that's like), competition stealing your business without providing the same value etc.
All that is possible with . You can also trade from anywhere. Take your laptop with you, find an internet connection and away you go.
Another advantage is that you don't need experience to get started. Get a traditionally job involves accumulating specialized experience, having a well-polished resume and having the right contacts. With the right training course, you can get started straight away.
Here's 7 more reasons to trade :
1. It never closes. It's open around the clock, worldwide. Trading positions open at Monday 7am, New Zealand time and close 5pm New York time on Friday. During this time, you can enter or exit the market whenever you like. It's a continuous electronic currency exchange. This is great because you can trade whenever you have spare time.
2. Leverage. Standard $100 000 currency lots can be traded with as little as $1000. This is mainly because of the ease with which you can buy and sell, some brokers will leverage up to 200 times, so with $100 you can control a 200 000 unit currency position. It's the best use of trading capital around, even banks lending on property investments don't come close.
3. Accurately predict the outcomes. Currency prices generally repeat themselves in predictable cycles so you can see what the trends are. 'Technical Analysis' helps to see these trends and profit from them.
4. Low Transaction Cost. In other words, you mistakes won't cost you a fortune. Good brokers won' charge commissions to trade or maintain an account even if you have a mini account and trade small volumes.
5. Unlimited Earning Potential. has a daily trading volume of over 1.5 trillion, the largest financial market in the world. It dwarfs the equities market (50 billion daily) and the futures market (30 billion).
6. You can make money in any market conditions. Each market is one currency against another, so when you buy in one, you're selling in another so there's no biase towards either currency moving up or down. This means it's up to you to choose which currency to buy or sell with. Yu can make money going up or down.
7. Market transparency. This is an advantage in any business or trading environment. It means you can manage risk and execute orders within seconds. It's highly efficient and allows you to avoid unexpected 'surprises'.
I hope you're now convinced that is the best investment and income opportunity around.
Forex The Future Investment
There are many many advantages over the various other ways of investing. First of all it is a 24 hr market, except for weekends of course. You have the US market then the european and then the Asian. One of the great times to trade is during the over lapping periods. The USA and european overlap between 5am & 9am eastern and the Euro & Asian between 11pm & 1am eastern. Usually the busiest time and best to trade.
The is also the risk factor for the accounts. With futures and options you can get margin calls that can wipe you out. If you get caught in a bad trade not only do you lose the money in the account but you may have to come up with alot more from your pocket. It can be very risking. But not in Forex. Worst case senerio you could lose whats in you account. But you would have to do something really stupid. Like making a big trade on a Fundamental day and leave it alone. If market takes a bad move and you weren't there. OOOPS. But That wouldn't happen with a smarth trader.
Then there are the demo accounts which is an account where you can trade using all the right things, platform,charts,and information. But you are using play money, or what we call paper trading too.
Plus with Forex you have a mini account. Instead of needing thousands of dollars to get into it. You can open an account with as little as $300.00. Now of course you will be trading at 1 tenth of a trade. IN other words you controling 10,000 instead of 100,000.00 These are call lots. Which also means you will only risk 1 tenth too!
So if you would love to learn to do investing and not have near the risk you really need to take a closer look at Forex trading.
Investing in Forex
Investing in foreign currencies is a relatively new avenue of investing. There are considerably fewer people are aware of this market than there are people aware of several other avenues of investing. Trading foreign currency, also known as forex, is the most lucrative investment market that exists. There are several factors that make this true among which, successful forex traders earn realistic profits of one hundred plus percent each month. Compared to some of the better known investment markets such as corporate stocks, this is an unheard of return on investment. It's very necessary to mention here that a person who invests in forex must, without exception, make it a point to learn the detailed, but simple strategies and information surrounding the market. This very fact is what makes the difference between successful forex traders and other traders.
A few additional points, which create such powerful leverage for investors within the forex market are: The amount of capital required to begin investing in the market is only three hundred dollars. For the most part, any other investment market is going to demand thousands of dollars of the investor in the beginning. Also, the market offers opportunities to profit regardless what the direction of the market may be; In most commonly known markets investors sit and wait for the market to begin an up trend before entering a trade. Even then, investors, as a rule must sit and wait some more to be able to exit the trade with a nice profit. Given that the forex market produces several up, down, and sideways trends in a single day, it can easily be seen that forex stands head and shoulders above other markets. Additionally there are trading strategies, which are taught that provide for compounded profits; these are profits on top of profits. In addition, free demo accounts are available within the industry of forex trading, which facilitate the sharpening of skills without the risk losing any capital. And the advantage regarding the time factor in trading foreign currency is a very attractive point for any investor. Compared to one of the most sought after avenues of investing, which often requires forty or more hours each week, namely in the real-estate market, the forex market requires a much smaller demand on the investor's time. Forex trading requires approximately ten to fifteen hours each week to earn a full time income. It's easy to see that the advantages and great leverage that exist in the forex market, make it among the most lucrative, time liberating, and easy to enter by far.
I hope this information gives you a clear understanding of how you can turn your investing into a true method of making your money work harder for you.
Advantages of the Forex Market
What are the advantages of the Forex Market over other types of investments?
When thinking about various investments, there is one investment vehicle that comes to mind. The Forex or Foreign Currency Market has many advantages over other types of investments. The Forex market is open 24 hrs a day, unlike the regular stock markets. Most investments require a substantial amount of capital before you can take advantage of an investment opportunity. To trade Forex, you only need a small amount of capital. Anyone can enter the market with as little as $300 USD to trade a "mini account", which allows you to trade lots of 10,000 units. One lot of 10,000 units of currency is equal to 1 contract. Each "pip" or move up or down in the currency pair is worth a $1 gain or loss, depending on which side of the market you are on. A standard account gives you control over 100,000 units of currency and a pip is worth $10.
The Forex market is also very liquid. When trading Forex you have full control of your capital.
Many other types of investments require holding your money up for long periods of time. This is a disadvantage because if you need to use the capital it can be difficult to access to it without taking a huge loss. Also, with a small amount of money, you can control
Forex traders can be profitable in bullish or bearish market conditions. Stock market traders need stock prices to rise in order to take a profit. Forex traders can make a profit during up trends and downtrends. Forex Trading can be risky, but with having the ability to have a good system to follow, good money management skills, and possessing self discipline, Forex trading can be a relatively low risk investment.
The Forex market can be traded anytime, anywhere. As long as you have access to a computer, you have the ability to trade the Forex market. An important thing to remember is before jumping into trading currencies, is it wise to practice with "paper money", or "fake money." Most brokers have demo accounts where you can download their trading station and practice real time with fake money. While this is no guarantee of your performance with real money, practicing can give you a huge advantage to become better prepared when you trade with your real, hard earned money. There are also many Forex courses on the internet, just be careful when choosing which ones to purchase.
Tuesday, September 1, 2009
Forex Trading For Beginners - 10 Essential Tips For Forex Trading Success
If you are new to Forex trading you understand need to understand that 95% of trades lose. If you want to win you can but you need to follow these essential trading tips.
Here are your ten tips and there in no particular order of importance, there all important!
1. Don't Use a cheap Forex Robot or Expert Advisor
If you think you are going to get rich by paying out two hundred dollars or less for a cheap software package think again you won't, all these systems lose money. If Forex trading were as simple as paying a few hundred dollars for a lifelong income, 95% of traders wouldn't lose money.
2. Accept Responsibility
Leading on from the above point, it should be pretty obvious that you need to accept responsibility for your actions, learn skills and get a decent Forex education.
3. Work Smart Not Hard
You don't need to work hard just get the right Forex information and that should only take you a couple of weeks at most and your all set.
4. Keep Your Strategy Simple
Simple trading strategies work best as they are more robust than complex ones, with fewer elements to break, so keep your system simple.
5. Use Technical analysis
This is simply the most time efficient way to trade and all you need to do is learn the right chart formations, to spot profitable chart set ups and that's a learned skill.
6. Be Patient
Don't trade to often, once or twice a month is enough to make big gains and is the best way to trade, as you will be focusing on the high odds trades which offer the biggest profits.
7. Use tight Money Management
You are going to get losses, so make sure you keep them small and always place a stop before you start to trade, so you are not tempted to run losses and hope they turn around - most times they don't!
8. Use Sensible Leverage
You can get 200: 1 leverage with any Forex broker online but this is far too much and you will eventually destroy your account. 10- 20:1 is plenty for most traders.
9. Learn Discipline
You will here this word a lot and it's the key to Forex trading success. You must follow your system with discipline and keep your losses small. If you can't follow your system with discipline you don't have one!
10. Be Realistic
Don't be afraid to make mistakes or take losses, all traders do and you will too. Forget perfection and focus on making money; if you can make 50 - 100% in your first year of trading you are up there with the best and can be very proud of yourself.
These are 10 very simple tips for novice Forex traders and if you follow them you could be on the road to Forex trading success and a great second or even life changing income.
