FOREX - An Overview
Forex which is the short form of Foreign Exchange refers to the process of exchanging currency of two countries. This means that currency of one country is exchanged with the currency of another and in this process the floating exchange rate is maintained. Trading of currencies take place majorly when there are transactions between different countries and the trading takes place in pairs like Euro/Dollar, Dollar/Yen. People usually trade in Forex to reap profits arising out of such deals. If the currency of one nation has a higher appreciation in value than the other at some point of time, you can exchange the currency currently and hold it till the time comes when the appreciation in value takes place for the first currency. At that time you can exchange it back and get a higher amount of the second currency for the same deal and thus make a profit. Because of its global nature, the Forex market is active for 24 hours and functions even on major holidays. The turnovers on Forex markets are very huge and thus no investor has any problem. Major banks and financial institutions take care of the transactions. Instructions are given to the brokers from the clients sometimes for take-profit or stop-loss situations, where the brokers act accordingly in absence of the client. For investment purposes four major currency pairs are used and they are Euro/US Dollar, US dollar/Japanese yen, British pound /US dollar, and US dollar /Swiss franc. The forex market is very liquid in nature and because the flow of money is so smooth, it is a lucrative business for many. However, earlier, low budget investors were unable to invest their money in this as the minimum amount of investment was very high and it included a lot of paperwork and rules and regulations to be fulfilled. At that time only major banks and financial institutions took part in these transactions and made huge profits. But now with the help of these financial institutions only and with help of brokers, Forex market dealings is within reach of common man. The more the amount invested, the more the profit yield out of the transaction when currency rates go high. You can find many similarities between the stock exchange market and Forex market as far as way of dealing is concerned. Both function in the same manner and if you understand the dealing of shares, it is very easy to understand dealing in exchanges. However the difference is, you do not get dividends in currency exchange unlike dividends received in any of the share dealings. Forex market is a good medium to make quick profit in times of fluctuating exchange rates. Since it is opened 24 hours, it is easier to track rates and decisions regarding sale or purchase of currency can be taken immediately. It is also liquid market and so money is not blocked in it. This gives the investors the freedom to move in and out of the market according to their will. However, there is one disadvantage of these kinds of dealings, the leverage is very high and is much more than leverage in equity market. When there is profit then it can be an euphoric high but when the rates are lower than the rates purchased, the loss can really hurt. Another disadvantage with the Forex market is that it is a very unregulated market. The regulations under law for financial institutions are there but there are none for brokers and dealers. You have to be careful if you intend investing in the Forex market.
วันศุกร์ที่ 26 มิถุนายน พ.ศ. 2552
Common Mistakes One Makes While Forex Trading!
Common Mistakes One Makes While Forex Trading!
Forex is not an easy game to win. It's for the big boys. Most of them who come in dreaming of success bite the dust and only a select few come up trumps in this kind of business. Let us see why such a scenario prevails: The primary reason for this is greed. People who barge in for a treasure hunt without thinking twice. When expectations are sky high, the rejection is destructive. It is not for people who are impulsive and are sure that Rome can be built in a day. Instead, this is for people who are patient enough and well educated about Forex. There are certain nuances that you got to pick up and to do that you got to know what you are getting into. Researching helps. Again, as stressed earlier, this is not for the people who just barge in for a quick buck. This attitude is a strict no-no. Next, it is the speculative and unsuccessful search for a cash cow. Everyone wants a sure-shot winner trading system. Well, there isn't any. If there is, nobody has found it yet. This is a business and not a suspense thriller or who done it? There is no "one definite answer." The best trading system is a particular pattern that can be ascertained only after trading for a long time and understand the subtle nuances of the business of Forex. There are no guide books for this. It is a hands on approach and eye for detail that will get your results. It is a market and naturally it behaves like one. The only thing that is constant in a Forex market is change. If this is understood a business day on Forex trading would be easier for you. Well, the next would be half-baked knowledge. If half learning is dangerous, then most of the Forex traders are dangerous people. Most of them do not even have an idea of what exactly Forex means and how it works. One has to have a mentor who can guide and educate. Read books on the subject and learn from every other source that is available out there. It is not just for Forex trading, it is just common sense to be knowledgeable about something that you are going to be a part of. Next, it is the discipline. When dealing with big money that comes when unexpected one gets too excited and messes it up. If you have the discipline then you would know how to go by the rules and keep it growing. All the opportunities that look inviting are not exactly what they are. Most of them could be just a mirage. People who run after every single opportunity tend to lose the plot. Consistency and patience are the key words here. Of course, there are people who dream of the reward they are going to reap that they tend to forget how much they have wagered. It is not a one day dream. This is a business, which rewards people who wager appropriately and accumulate them and bet them again in a judicious way. There is one more clan who lose the plot and they are the people who are sore losers. They dread Armageddon when they lose bad. There are enough chances Forex provides and one should learn from each and every loss. There is always light at the end of the tunnel. There are a few who come with dreams in their eyes and build castles in the air. There are others who come alone without any good mentor or other support. And finally, there are few come into this like they visit a casino – just looking for some fun and excitement. Well, it is anything but that.
Forex is not an easy game to win. It's for the big boys. Most of them who come in dreaming of success bite the dust and only a select few come up trumps in this kind of business. Let us see why such a scenario prevails: The primary reason for this is greed. People who barge in for a treasure hunt without thinking twice. When expectations are sky high, the rejection is destructive. It is not for people who are impulsive and are sure that Rome can be built in a day. Instead, this is for people who are patient enough and well educated about Forex. There are certain nuances that you got to pick up and to do that you got to know what you are getting into. Researching helps. Again, as stressed earlier, this is not for the people who just barge in for a quick buck. This attitude is a strict no-no. Next, it is the speculative and unsuccessful search for a cash cow. Everyone wants a sure-shot winner trading system. Well, there isn't any. If there is, nobody has found it yet. This is a business and not a suspense thriller or who done it? There is no "one definite answer." The best trading system is a particular pattern that can be ascertained only after trading for a long time and understand the subtle nuances of the business of Forex. There are no guide books for this. It is a hands on approach and eye for detail that will get your results. It is a market and naturally it behaves like one. The only thing that is constant in a Forex market is change. If this is understood a business day on Forex trading would be easier for you. Well, the next would be half-baked knowledge. If half learning is dangerous, then most of the Forex traders are dangerous people. Most of them do not even have an idea of what exactly Forex means and how it works. One has to have a mentor who can guide and educate. Read books on the subject and learn from every other source that is available out there. It is not just for Forex trading, it is just common sense to be knowledgeable about something that you are going to be a part of. Next, it is the discipline. When dealing with big money that comes when unexpected one gets too excited and messes it up. If you have the discipline then you would know how to go by the rules and keep it growing. All the opportunities that look inviting are not exactly what they are. Most of them could be just a mirage. People who run after every single opportunity tend to lose the plot. Consistency and patience are the key words here. Of course, there are people who dream of the reward they are going to reap that they tend to forget how much they have wagered. It is not a one day dream. This is a business, which rewards people who wager appropriately and accumulate them and bet them again in a judicious way. There is one more clan who lose the plot and they are the people who are sore losers. They dread Armageddon when they lose bad. There are enough chances Forex provides and one should learn from each and every loss. There is always light at the end of the tunnel. There are a few who come with dreams in their eyes and build castles in the air. There are others who come alone without any good mentor or other support. And finally, there are few come into this like they visit a casino – just looking for some fun and excitement. Well, it is anything but that.
Forex Trading - What Goes Into Currency Trading Values?
Forex Trading - What Goes Into Currency Trading Values?
The Forex trading segment represents many opportunities. The ever-changing values of currencies can provide ample scope for profits. For those interested in making money out of the Forex trading segment, understanding the way the market works can be critical. There are many things, which can affect the long-term rates of Forex trading. Aspects like BOP or Balance Of Payments, prevailing exchange rates as well as volatility in the market play a role in determining what the currency value is going to be. Even factors like the Gross Domestic Product play a critical role in estimating your chances at Forex trading. The prevailing exchange rate of any currency will determine what the purchasing power in that country is like. This can have a profound effect on the amount of profit you will rake through Forex trading. You Need Good Training While you can certainly learn about the various terms and jargons associated with Forex trading, you cannot understand the nuances of trading transactions through a do it yourself learning approach. Therefore, you need a good quality Forex training program, which will guide you through the basics of such terms, how they are connected with one another and what impact these have on your profits overall. The exchange rates between any two countries can be floating or fixed and it all depends on the agreements as well as market forces, which come into play. While fixed rates will not change, floating rates will be affected by demand and supply. For example, if you consider the European Monetary System, there is a lot of fluctuation between the currencies. If you are not knowledgeable about how the various currencies function and what trends they depict, you can quickly lose a lot of money! This is where Forex training courses can help you. What Affects Prices In Currencies One of the reasons why Forex trading is so irresistible is because anything can happen at any given time. The market promises plenty of volatility, which entails either huge profits or humungous losses. Anything could affect the currency price ranging from important political announcements, inflation in the economy, recession, trade barriers such as customs duties, restrictions on imported items and much more. It is the cumulative effect of all these factors, which affects the currency rate. Sometimes, the differences between currencies can remain a permanent fixture. This explains why certain currency pairings such as the British Pound and Japanese Yen or US Dollar and Canadian Dollar always manage to yield huge profits – consistently. These are the finer aspects of Forex trading which do not come only with experience. Regardless of the characteristics of the currency market, the best thing a new or experienced trader can do is keep up to date and stay focused. And the best way to do that is with effective training and coaching. Training and coaching can make a huge difference in not only the way you perceive the Forex trading system as a whole but also the consistency with which you rake in profits. By enrolling yourself in a reputed Forex training program, you can significantly up your knowledge of the way the market works!
The Forex trading segment represents many opportunities. The ever-changing values of currencies can provide ample scope for profits. For those interested in making money out of the Forex trading segment, understanding the way the market works can be critical. There are many things, which can affect the long-term rates of Forex trading. Aspects like BOP or Balance Of Payments, prevailing exchange rates as well as volatility in the market play a role in determining what the currency value is going to be. Even factors like the Gross Domestic Product play a critical role in estimating your chances at Forex trading. The prevailing exchange rate of any currency will determine what the purchasing power in that country is like. This can have a profound effect on the amount of profit you will rake through Forex trading. You Need Good Training While you can certainly learn about the various terms and jargons associated with Forex trading, you cannot understand the nuances of trading transactions through a do it yourself learning approach. Therefore, you need a good quality Forex training program, which will guide you through the basics of such terms, how they are connected with one another and what impact these have on your profits overall. The exchange rates between any two countries can be floating or fixed and it all depends on the agreements as well as market forces, which come into play. While fixed rates will not change, floating rates will be affected by demand and supply. For example, if you consider the European Monetary System, there is a lot of fluctuation between the currencies. If you are not knowledgeable about how the various currencies function and what trends they depict, you can quickly lose a lot of money! This is where Forex training courses can help you. What Affects Prices In Currencies One of the reasons why Forex trading is so irresistible is because anything can happen at any given time. The market promises plenty of volatility, which entails either huge profits or humungous losses. Anything could affect the currency price ranging from important political announcements, inflation in the economy, recession, trade barriers such as customs duties, restrictions on imported items and much more. It is the cumulative effect of all these factors, which affects the currency rate. Sometimes, the differences between currencies can remain a permanent fixture. This explains why certain currency pairings such as the British Pound and Japanese Yen or US Dollar and Canadian Dollar always manage to yield huge profits – consistently. These are the finer aspects of Forex trading which do not come only with experience. Regardless of the characteristics of the currency market, the best thing a new or experienced trader can do is keep up to date and stay focused. And the best way to do that is with effective training and coaching. Training and coaching can make a huge difference in not only the way you perceive the Forex trading system as a whole but also the consistency with which you rake in profits. By enrolling yourself in a reputed Forex training program, you can significantly up your knowledge of the way the market works!
Forex Trading - How to Select the Best Forex Broker?
Forex Trading - How to Select the Best Forex Broker?
Most novice Forex trading amateurs are often perplexed about which trading broker to leverage. There are few things to be considered before you invest your money and trust with a broker. Here are the top 10 aspects to evaluate before zeroing on a Forex trading broker. Reviews and general opinions about a broker site are crucial. If you are not sure about what other consumers feel about this site, you can check out the scores of consumer reviews online. If the general consensus about the Forex trading site is good then go for it. Customer service and protection policies are also important. Does the broker follow regulations stipulated as per Forex trading laws? What registrations does this company possess in terms of regulations and what level of consumer protection does it offer? Do they insure client funds incase of frauds or bankruptcies? The method of implementing Forex trading transactions is also important. Are they desk-oriented, no-dealing brokers, ECNs or market makers? How fast can they execute an order? Do they execute such orders manually or automatically? How much trade size do you need on a minimum before quote requests? Are all the trade transactions of clients offset? The overall spread of the potential broker is also crucial. The tighter the spread the more chances of volatility in capital. Do they have a variable or fixed type of spread? You can understand the interaction between slippage and spread through a reputed Forex training program. The amount of slippage to be expected will play a role in your profits at Forex trading. Hence, you need to know the amount of slippage expected in both fast and normal paced markets. Aspects Such As Margin Requirements Are Also Important. In addition, you should also know if this requirement changes according to certain days in the week as well as currency pairings. Points of time when margin calls are made by the broker and whether it applies for both mini and standard accounts will also be important. The rate of commission will determine the extent of profits you make. Most Forex trading brokers incorporate this inside the spread. Rollover policies of the broker is also essential to know. Do you have to have a minimum margin requirement to get rollover interest? What are swap rates prevalent for currency pairings in both long and short? Do any other conditions apply for getting rollover interest? The kind of Forex trading platform used will also play a role. Is it functional and intuitive? Does it have disconnections at the time of trading? During news announcements and fast paced market conditions, does the platform remain stable? How many pairs of currencies is it possible to trade with this platform? Is there an API for automation of the Forex trading process? Trading account specifics like minimum balance needed, trade size required and if interest is earned on unused balances etc. all are important factors for evaluation. No matter which broker you decide to go for, you ultimately need access to reputed Forex training courses to help you with the workings of the system.
Most novice Forex trading amateurs are often perplexed about which trading broker to leverage. There are few things to be considered before you invest your money and trust with a broker. Here are the top 10 aspects to evaluate before zeroing on a Forex trading broker. Reviews and general opinions about a broker site are crucial. If you are not sure about what other consumers feel about this site, you can check out the scores of consumer reviews online. If the general consensus about the Forex trading site is good then go for it. Customer service and protection policies are also important. Does the broker follow regulations stipulated as per Forex trading laws? What registrations does this company possess in terms of regulations and what level of consumer protection does it offer? Do they insure client funds incase of frauds or bankruptcies? The method of implementing Forex trading transactions is also important. Are they desk-oriented, no-dealing brokers, ECNs or market makers? How fast can they execute an order? Do they execute such orders manually or automatically? How much trade size do you need on a minimum before quote requests? Are all the trade transactions of clients offset? The overall spread of the potential broker is also crucial. The tighter the spread the more chances of volatility in capital. Do they have a variable or fixed type of spread? You can understand the interaction between slippage and spread through a reputed Forex training program. The amount of slippage to be expected will play a role in your profits at Forex trading. Hence, you need to know the amount of slippage expected in both fast and normal paced markets. Aspects Such As Margin Requirements Are Also Important. In addition, you should also know if this requirement changes according to certain days in the week as well as currency pairings. Points of time when margin calls are made by the broker and whether it applies for both mini and standard accounts will also be important. The rate of commission will determine the extent of profits you make. Most Forex trading brokers incorporate this inside the spread. Rollover policies of the broker is also essential to know. Do you have to have a minimum margin requirement to get rollover interest? What are swap rates prevalent for currency pairings in both long and short? Do any other conditions apply for getting rollover interest? The kind of Forex trading platform used will also play a role. Is it functional and intuitive? Does it have disconnections at the time of trading? During news announcements and fast paced market conditions, does the platform remain stable? How many pairs of currencies is it possible to trade with this platform? Is there an API for automation of the Forex trading process? Trading account specifics like minimum balance needed, trade size required and if interest is earned on unused balances etc. all are important factors for evaluation. No matter which broker you decide to go for, you ultimately need access to reputed Forex training courses to help you with the workings of the system.
Profit More Using the Forex Signals Judiciously!
Profit More Using the Forex Signals Judiciously!
Forex trading is one hell of a roller coaster ride for sure. The money does not come searching to your coffers. You got to sit in front a computer and browse through and study the market. The more you keep an eye on the market, the more you would learn. Look for openings and exit strategies in the market environment. This would go a long way in your partaking in Forex trading. If you are not the one who stares at the monitor for hours, you can try automation. Well, of course, it is no substitute to a human brain and it may not give you real pleasant results, but again it would not mess everything up either. You can take a chance here sporadically and give your eyes a breather. If you are a person who does not want to stare at the computer for hours and at the same time, does not trust automation signals then there is one more option left for you. You can use the Forex signal. Yes, this is a live person who does it for you. This person does what you ought to do, but you got to pay him though. It could be a 12-month once charge or could be every month. There are brokerages that aid with pop up message to signal. Not every pairing is allowed for Forex signals, there are only a select few. They are Euro/ United States Dollar, United States Dollar/Japan Yen, Great Britain Pound/United States Dollar, or United States/Swiss Franc. Other pairings are not a strict no-no though. There are other options from a few other providers. Forex signals are aimed at saving your time. Of course, they know the trade better therefore they may give you a better input than you yourself sometimes. Signals would indicate the trend and opening and exit routes and you can take a call. This is one way of doing it. There are others who give you the option of total relaxation. If you give your word, then themselves will do the analyzing, researching and ultimately deciding. In this case, you can give yourself a holiday. You do not need to even switch on your computer. Of course, the last word is yours on giving the permission to the Forex signals to do your work. Signals can also be chosen for a particular need. Instead of totally washing your hands of the trade and allowing the signal to take over you can just ask for a specific signal to be given to you to aid with your trading. This one makes more sense. This is for people who would like an extra tip in conducting business better and not for people who are looking for relaxation. You can also set the signal in such a way where it allows the signal to buy or sell according to the terms you have set. It would work within that parameter and do your work for you. Even the human eye can miss the changes sometimes, but a program detects the change as per its command and does the deed you desired. This is one judicious option that you can exercise. You can guess the market trend by taking a look at the volume indicators. If the trend is upward then there is a new trend in the offing and if it is spiraling downward then the market is shaky and the investors are not sure of where it is headed. Subscription services give out these kind of indicators to you and charge from you a nominal amount for their service. These indicators are quite helpful, but not always correct. In a Forex market one can never be right all the time.
Forex trading is one hell of a roller coaster ride for sure. The money does not come searching to your coffers. You got to sit in front a computer and browse through and study the market. The more you keep an eye on the market, the more you would learn. Look for openings and exit strategies in the market environment. This would go a long way in your partaking in Forex trading. If you are not the one who stares at the monitor for hours, you can try automation. Well, of course, it is no substitute to a human brain and it may not give you real pleasant results, but again it would not mess everything up either. You can take a chance here sporadically and give your eyes a breather. If you are a person who does not want to stare at the computer for hours and at the same time, does not trust automation signals then there is one more option left for you. You can use the Forex signal. Yes, this is a live person who does it for you. This person does what you ought to do, but you got to pay him though. It could be a 12-month once charge or could be every month. There are brokerages that aid with pop up message to signal. Not every pairing is allowed for Forex signals, there are only a select few. They are Euro/ United States Dollar, United States Dollar/Japan Yen, Great Britain Pound/United States Dollar, or United States/Swiss Franc. Other pairings are not a strict no-no though. There are other options from a few other providers. Forex signals are aimed at saving your time. Of course, they know the trade better therefore they may give you a better input than you yourself sometimes. Signals would indicate the trend and opening and exit routes and you can take a call. This is one way of doing it. There are others who give you the option of total relaxation. If you give your word, then themselves will do the analyzing, researching and ultimately deciding. In this case, you can give yourself a holiday. You do not need to even switch on your computer. Of course, the last word is yours on giving the permission to the Forex signals to do your work. Signals can also be chosen for a particular need. Instead of totally washing your hands of the trade and allowing the signal to take over you can just ask for a specific signal to be given to you to aid with your trading. This one makes more sense. This is for people who would like an extra tip in conducting business better and not for people who are looking for relaxation. You can also set the signal in such a way where it allows the signal to buy or sell according to the terms you have set. It would work within that parameter and do your work for you. Even the human eye can miss the changes sometimes, but a program detects the change as per its command and does the deed you desired. This is one judicious option that you can exercise. You can guess the market trend by taking a look at the volume indicators. If the trend is upward then there is a new trend in the offing and if it is spiraling downward then the market is shaky and the investors are not sure of where it is headed. Subscription services give out these kind of indicators to you and charge from you a nominal amount for their service. These indicators are quite helpful, but not always correct. In a Forex market one can never be right all the time.
วันอาทิตย์ที่ 14 มิถุนายน พ.ศ. 2552
Your FOREX Trading Philosophy
Your FOREX Trading Philosophy
"Easy money" is the allure that captivates many beginning FOREX traders. FOREX websites offer "risk-free" trading, "high returns", "low investment." These claims have a grain of truth in them, but the reality of FOREX is a bit more complex.
Mistakes Of The Beginning Trader
There are 2 common mistakes that many beginner traders make: trading without a strategy and letting emotions rule their decisions. After opening a FOREX account it may be tempting to dive right in and start trading. Watching the movements of EUR/USD for example, you may feel that you are letting an opportunity pass you by if you don't enter the market immediately. You buy and watch the market move against you. You panic and sell, only to see the market recover.
This kind of undisciplined approach to FOREX is guaranteed to lose money. FOREX traders must have a rational trading strategy and not make trading decisions in the heat of the moment.
Understanding Market Movements
To make rational trading decisions, the FOREX trader must be well educated in market movements. He must be able to apply technical studies to charts and plot out entry and exit points. He must take advantage of the various types of orders to minimize his risk and maximize his profit.
The first step in becoming a successful FOREX trader is to understand the market and the forces behind it. Who trades FOREX and why? This will allow you to identify successful trading strategies and use them.
Accountability
There are 5 major groups of investors who participate in FOREX: governments, banks, corporations, investment funds, and traders. Each group has its own objectives, but 1 thing all groups except traders have in common is external control. Every organization has rules and guidelines for trading currencies and can be held accountable for their trading decisions. Individual traders, on the other hand, are accountable only to themselves.
Large organizations and educated traders approach the FOREX with strategies, and if you hope to succeed as a FOREX trader you must follow suit.
Money Management
Money management is an integral part of any trading strategy. Besides knowing which currencies to trade and how to recognize entry and exit signals, the successful trader has to manage his resources and integrate money management into his trading plan.
There are various strategies for money management. Many rely on the calculation of core equity -- your starting balance minus the money used in open positions.
Core Equity And Limited Risk
When entering a position try to limit your risk to 1% to 3% of each trade. This means that if you are trading a standard FOREX lot of $100,000 you should limit your risk to $1,000 to $3,000. You do this with a stop loss order 100 pips (1 pip = $10) above or below your entry position.
As your core equity rises or falls, adjust the dollar amount of your risk. With a starting balance of $10,000 and 1 open position, your core equity is $9000. If you wish to add a second open position, your core equity would fall to $8000 and you should limit your risk to $900. Risk in a third position should be limited to $800.
Greater Profit, Greater Risk
You should also raise your risk level as your core equity rises. After $5,000 profit, your core equity is now $15,000. You could raise your risk to $1,500 per transaction. Alternatively, you could risk more from the profit than from the original starting balance. Some traders may risk up to 5% against their realized profits ($5,000 on a $100,000 lot) for greater profit potential.
These are the kinds of strategic tactics that allow a beginner to get a foothold on profitable trading in FOREX.
"Easy money" is the allure that captivates many beginning FOREX traders. FOREX websites offer "risk-free" trading, "high returns", "low investment." These claims have a grain of truth in them, but the reality of FOREX is a bit more complex.
Mistakes Of The Beginning Trader
There are 2 common mistakes that many beginner traders make: trading without a strategy and letting emotions rule their decisions. After opening a FOREX account it may be tempting to dive right in and start trading. Watching the movements of EUR/USD for example, you may feel that you are letting an opportunity pass you by if you don't enter the market immediately. You buy and watch the market move against you. You panic and sell, only to see the market recover.
This kind of undisciplined approach to FOREX is guaranteed to lose money. FOREX traders must have a rational trading strategy and not make trading decisions in the heat of the moment.
Understanding Market Movements
To make rational trading decisions, the FOREX trader must be well educated in market movements. He must be able to apply technical studies to charts and plot out entry and exit points. He must take advantage of the various types of orders to minimize his risk and maximize his profit.
The first step in becoming a successful FOREX trader is to understand the market and the forces behind it. Who trades FOREX and why? This will allow you to identify successful trading strategies and use them.
Accountability
There are 5 major groups of investors who participate in FOREX: governments, banks, corporations, investment funds, and traders. Each group has its own objectives, but 1 thing all groups except traders have in common is external control. Every organization has rules and guidelines for trading currencies and can be held accountable for their trading decisions. Individual traders, on the other hand, are accountable only to themselves.
Large organizations and educated traders approach the FOREX with strategies, and if you hope to succeed as a FOREX trader you must follow suit.
Money Management
Money management is an integral part of any trading strategy. Besides knowing which currencies to trade and how to recognize entry and exit signals, the successful trader has to manage his resources and integrate money management into his trading plan.
There are various strategies for money management. Many rely on the calculation of core equity -- your starting balance minus the money used in open positions.
Core Equity And Limited Risk
When entering a position try to limit your risk to 1% to 3% of each trade. This means that if you are trading a standard FOREX lot of $100,000 you should limit your risk to $1,000 to $3,000. You do this with a stop loss order 100 pips (1 pip = $10) above or below your entry position.
As your core equity rises or falls, adjust the dollar amount of your risk. With a starting balance of $10,000 and 1 open position, your core equity is $9000. If you wish to add a second open position, your core equity would fall to $8000 and you should limit your risk to $900. Risk in a third position should be limited to $800.
Greater Profit, Greater Risk
You should also raise your risk level as your core equity rises. After $5,000 profit, your core equity is now $15,000. You could raise your risk to $1,500 per transaction. Alternatively, you could risk more from the profit than from the original starting balance. Some traders may risk up to 5% against their realized profits ($5,000 on a $100,000 lot) for greater profit potential.
These are the kinds of strategic tactics that allow a beginner to get a foothold on profitable trading in FOREX.
Forex Brokers - Helping to Maximize Your Success
Forex Brokers - Helping to Maximize Your Success
Forex Brokers—Your Ultimate Partners In Success
A Forex broker is a broker dealing in foreign exchange, just like real estate broker who deals in real estate and properties. Simply, a Forex broker is an advisor who advises you about the forex market. However, the Forex market is not the perfect place to play with as a novice and beginner as there are many criticalities involved along with much risk bearing capacities. Novices can very quickly get their fingers badly burnt. But inexperience is not the only reason to consider using a Forex broker to trade in the high-risk international currencies market.
So, the Forex broker is an advisor who advises you about the forex market and allows you to work for 24 hours a day with major currencies like EUR, JPY, GBP, CHF etc against the US dollar on the spot, i.e. according to the current prices on the forex international exchange market. But the level of profits depends only on your abilities as well as your timely decision.
Although the role of the Forex broker is relatively redundant as a result of technological advancement and increased awareness, we cannot completely underestimate his role. The new paradigm shift has had something of a democratizing effect on the financial markets, and in the years that have followed a plethora of banks and brokerages have extended the range of their services to a new market by packaging up their online trading systems for the retail market, enabling the more modest investor to trade from their own computer screen - even on the previously out-of-reach currency markets. This is where the real role of Forex broker starts.
PIP is nothing special but Price Interest Points. In the forex market, currencies are always priced in pairs. The quoted price is the level where we, acting as the market maker, are willing to buy/sell the currency pair. In the wholesale market, currencies are quoted out to four decimal places, with the last placeholder called a point or a pip. A pip in most currencies is one /10,000th of an exchange rate (in USD/JPY, it is one /100th, likewise you can find for others).
Let’s see some more information about Spread. As with all financial products, forex quotes include terms like 'bid' and 'ask”'. The 'bid', in its simplest terms is the price at which a dealer is willing to buy (and clients can sell) the base currency in exchange for the counter currency. The 'ask' is the price at which dealer will sell (and clients can buy) the base currency in exchange for the counter currency. The difference between the bid and the ask price is referred to as the spread. The spread defines the trader’s cost, which can be recovered with a favorable currency move in the market. The value of a pip is determined by the pair of currencies being traded, the rate at which the currency pair is trading and the size of the position being traded.
Forex Brokers—Your Ultimate Partners In Success
A Forex broker is a broker dealing in foreign exchange, just like real estate broker who deals in real estate and properties. Simply, a Forex broker is an advisor who advises you about the forex market. However, the Forex market is not the perfect place to play with as a novice and beginner as there are many criticalities involved along with much risk bearing capacities. Novices can very quickly get their fingers badly burnt. But inexperience is not the only reason to consider using a Forex broker to trade in the high-risk international currencies market.
So, the Forex broker is an advisor who advises you about the forex market and allows you to work for 24 hours a day with major currencies like EUR, JPY, GBP, CHF etc against the US dollar on the spot, i.e. according to the current prices on the forex international exchange market. But the level of profits depends only on your abilities as well as your timely decision.
Although the role of the Forex broker is relatively redundant as a result of technological advancement and increased awareness, we cannot completely underestimate his role. The new paradigm shift has had something of a democratizing effect on the financial markets, and in the years that have followed a plethora of banks and brokerages have extended the range of their services to a new market by packaging up their online trading systems for the retail market, enabling the more modest investor to trade from their own computer screen - even on the previously out-of-reach currency markets. This is where the real role of Forex broker starts.
PIP is nothing special but Price Interest Points. In the forex market, currencies are always priced in pairs. The quoted price is the level where we, acting as the market maker, are willing to buy/sell the currency pair. In the wholesale market, currencies are quoted out to four decimal places, with the last placeholder called a point or a pip. A pip in most currencies is one /10,000th of an exchange rate (in USD/JPY, it is one /100th, likewise you can find for others).
Let’s see some more information about Spread. As with all financial products, forex quotes include terms like 'bid' and 'ask”'. The 'bid', in its simplest terms is the price at which a dealer is willing to buy (and clients can sell) the base currency in exchange for the counter currency. The 'ask' is the price at which dealer will sell (and clients can buy) the base currency in exchange for the counter currency. The difference between the bid and the ask price is referred to as the spread. The spread defines the trader’s cost, which can be recovered with a favorable currency move in the market. The value of a pip is determined by the pair of currencies being traded, the rate at which the currency pair is trading and the size of the position being traded.
Forex Profits
Forex Profits
The Forex Market—What, When and Why?
Forex, FX and the Forex market are some common abbreviations for the Foreign Exchange market. Actually it is the largest financial market in the world, where money is sold and bought freely. In its present condition the Forex market was launched in the seventies, when free exchange rates were introduced, and only the participants of the market determine the price of one currency against the other proceeding from demand and supply. As far as the freedom from any external control and free competition are concerned, the Forex market is a perfect market.
With a daily turnover of over trillions of dollars, the Foreign Exchange market conducts more than three times the aggregate amount volume of the United States Equity and Treasury markets combined. The Forex market is an over-the-counter market where buyers and sellers conduct foreign exchange business using different means of communication.
Unlike other financial markets, the Forex market has no physical location or central exchange. Since the Forex market lacks a physical exchange, the market trades continuously on a 24-hour basis, moving from one time zone to the next, across each of the world’s major financial centers every day. Trillions of dollars of foreign exchange activity takes place every day. From 1997 to the end of 2000, daily forex trading volume surged approximately from US$5 billion to US$1.5 trillion and more (according to various recent studies it has touched $1.7 trillion per day and dwarfs all other markets for trading in size and volume). It is really difficult, if not impossible; to determine an absolutely exact number because trading is not centralized on an exchange. But one thing is for sure that the Forex market continues to grow at a phenomenal rate.
Before the advent of Internet and ecommerce, only big corporations, multinational banks and wealthy individuals could trade currencies in the Forex market through the use of the proprietary trading systems of banks. These systems required as much as US$1 million to open an account. Thanks to advancements in online technology, today investors with only a few thousand dollars can have access to the Forex market 24 hours a day and around 5 ½ days of a week.
The Forex market is a nonstop cash market where currencies of nations are traded, typically via brokers called forex brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets while traders increase or decrease value of an investment upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events so it is also considered to be a highly volatile and fragile market too. Conditions of the Forex market never remain the same they changes every second.
The foreign exchange market dwarfs the combined operations of the New York, London, and Tokyo futures and stock exchanges. According to its size and scope it is many times larger than all other markets. Stats shows that spot transactions and forward outright Forex trading take place in the inter-bank market. 51% of the market is in spot Forex transactions, followed by 32% in currency swap transactions. Forward outright Forex transactions represent another 5% of this daily turnover, with options on ‘interbank’ Forex transactions making up another 8%. Therefore the inter-bank market accounts for 96% of the global foreign exchange market, with the remaining 4% being divided among all the global futures exchanges.
For traders, Forex trading provides an alternative to stock market trading. While there are thousands of stocks to choose from, there are only a few major currencies to trade (the Dollar, Yen, British Pound, Swiss Franc, and the Euro are the most popular). Forex trading also provides a lot more leverage than stock trading, and the minimum investment to get started is a lot lower. Add to that the ability to choose flexible trading hours (forex trading goes on 24 hours a day) and you have the reason why so many stock traders have flocked to day trade currencies.
The Forex Market—What, When and Why?
Forex, FX and the Forex market are some common abbreviations for the Foreign Exchange market. Actually it is the largest financial market in the world, where money is sold and bought freely. In its present condition the Forex market was launched in the seventies, when free exchange rates were introduced, and only the participants of the market determine the price of one currency against the other proceeding from demand and supply. As far as the freedom from any external control and free competition are concerned, the Forex market is a perfect market.
With a daily turnover of over trillions of dollars, the Foreign Exchange market conducts more than three times the aggregate amount volume of the United States Equity and Treasury markets combined. The Forex market is an over-the-counter market where buyers and sellers conduct foreign exchange business using different means of communication.
Unlike other financial markets, the Forex market has no physical location or central exchange. Since the Forex market lacks a physical exchange, the market trades continuously on a 24-hour basis, moving from one time zone to the next, across each of the world’s major financial centers every day. Trillions of dollars of foreign exchange activity takes place every day. From 1997 to the end of 2000, daily forex trading volume surged approximately from US$5 billion to US$1.5 trillion and more (according to various recent studies it has touched $1.7 trillion per day and dwarfs all other markets for trading in size and volume). It is really difficult, if not impossible; to determine an absolutely exact number because trading is not centralized on an exchange. But one thing is for sure that the Forex market continues to grow at a phenomenal rate.
Before the advent of Internet and ecommerce, only big corporations, multinational banks and wealthy individuals could trade currencies in the Forex market through the use of the proprietary trading systems of banks. These systems required as much as US$1 million to open an account. Thanks to advancements in online technology, today investors with only a few thousand dollars can have access to the Forex market 24 hours a day and around 5 ½ days of a week.
The Forex market is a nonstop cash market where currencies of nations are traded, typically via brokers called forex brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets while traders increase or decrease value of an investment upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events so it is also considered to be a highly volatile and fragile market too. Conditions of the Forex market never remain the same they changes every second.
The foreign exchange market dwarfs the combined operations of the New York, London, and Tokyo futures and stock exchanges. According to its size and scope it is many times larger than all other markets. Stats shows that spot transactions and forward outright Forex trading take place in the inter-bank market. 51% of the market is in spot Forex transactions, followed by 32% in currency swap transactions. Forward outright Forex transactions represent another 5% of this daily turnover, with options on ‘interbank’ Forex transactions making up another 8%. Therefore the inter-bank market accounts for 96% of the global foreign exchange market, with the remaining 4% being divided among all the global futures exchanges.
For traders, Forex trading provides an alternative to stock market trading. While there are thousands of stocks to choose from, there are only a few major currencies to trade (the Dollar, Yen, British Pound, Swiss Franc, and the Euro are the most popular). Forex trading also provides a lot more leverage than stock trading, and the minimum investment to get started is a lot lower. Add to that the ability to choose flexible trading hours (forex trading goes on 24 hours a day) and you have the reason why so many stock traders have flocked to day trade currencies.
Find the Profitable Opportunities in Forex Trading
Find the Profitable Opportunities in Forex Trading
Indeed large multinational and individual banks and other major financial institutions have dominated FX trading (also known as Forex trading), but there is a paradigm change in the nature and type of investing. According to one estimate, in the new millennium, there are over 6 million online investment accounts, up from 1.5 million in 1997. As a result, start-up firms now compete directly with financial institutions to serve investors in the new technologically driven economy, and the clear winner is the customer. The competition between the brick and mortar institutions and the Internet-based companies has dramatically lowered the costs of investing, and empowered the individual investor to take control of their own investment strategy in Forex trading.
We know Forex trading is direct access trading of currencies. In the past, foreign exchange trading was limited to large banks and institutional traders but recent advancements in technology have allowed small traders to take advantage of the many benefits of Forex trading using online trading platforms to trade. Virtually Forex trading is done 24 hours day and almost 5 ½ days of a week. In the recent times, online trading has revolutionized the currency markets by making it accessible to the small and medium sized investor.
The Forex trading is perhaps the largest financial market in the world, with a daily average turnover of approximately $1.5 trillion. Foreign Exchange is the simultaneous buying of one currency and selling of another. The world's currencies are on a floating exchange rate and are always traded in pairs, for example EUR/USD or USD/JPY or USD/INR etc.
In the new millennium, the Forex trading has become accessible for an individual investor or small group of investors. In the current scenario, investors reap many benefits from Forex trading than stock market, e-mini futures and such other trading. Today mostly traders are choosing Forex trading than stock trading because there are approximately 4,500 stocks listed on the New York Stock exchange. Another 3,500 are listed on the NASDAQ. In spot Forex trading, you have 4 major markets, 24 hours a day 5.5 days a week. If you are so inclined, you have approximately 34 second-tier currencies to look at in your spare time. You can concentrate on the major forex and can find your trade. When you are investing in forex you can spend your afternoon on the golf course or with your spouse watching movie or celebrating holidays—in short it is easy and hassle free than stock/future market.
Not only is it an accessible, easy and less capital-intensive business opportunity, but it is much more cost efficient too to invest in the Forex market, in terms of both commissions and transaction fees. Generally, commissions for stock trades range from a low of $7.95-$29.95 per trade with on-line brokers to over $100 per trade with traditional brokers. Opposite to that, typically stock commissions are directly related to the level of service offered by the broker. At the high end, traditional brokers offer full access to research, analyst stock recommendations, etc. In contrast, on-line Forex brokers charge significantly lower commission and transaction fees.
Indeed large multinational and individual banks and other major financial institutions have dominated FX trading (also known as Forex trading), but there is a paradigm change in the nature and type of investing. According to one estimate, in the new millennium, there are over 6 million online investment accounts, up from 1.5 million in 1997. As a result, start-up firms now compete directly with financial institutions to serve investors in the new technologically driven economy, and the clear winner is the customer. The competition between the brick and mortar institutions and the Internet-based companies has dramatically lowered the costs of investing, and empowered the individual investor to take control of their own investment strategy in Forex trading.
We know Forex trading is direct access trading of currencies. In the past, foreign exchange trading was limited to large banks and institutional traders but recent advancements in technology have allowed small traders to take advantage of the many benefits of Forex trading using online trading platforms to trade. Virtually Forex trading is done 24 hours day and almost 5 ½ days of a week. In the recent times, online trading has revolutionized the currency markets by making it accessible to the small and medium sized investor.
The Forex trading is perhaps the largest financial market in the world, with a daily average turnover of approximately $1.5 trillion. Foreign Exchange is the simultaneous buying of one currency and selling of another. The world's currencies are on a floating exchange rate and are always traded in pairs, for example EUR/USD or USD/JPY or USD/INR etc.
In the new millennium, the Forex trading has become accessible for an individual investor or small group of investors. In the current scenario, investors reap many benefits from Forex trading than stock market, e-mini futures and such other trading. Today mostly traders are choosing Forex trading than stock trading because there are approximately 4,500 stocks listed on the New York Stock exchange. Another 3,500 are listed on the NASDAQ. In spot Forex trading, you have 4 major markets, 24 hours a day 5.5 days a week. If you are so inclined, you have approximately 34 second-tier currencies to look at in your spare time. You can concentrate on the major forex and can find your trade. When you are investing in forex you can spend your afternoon on the golf course or with your spouse watching movie or celebrating holidays—in short it is easy and hassle free than stock/future market.
Not only is it an accessible, easy and less capital-intensive business opportunity, but it is much more cost efficient too to invest in the Forex market, in terms of both commissions and transaction fees. Generally, commissions for stock trades range from a low of $7.95-$29.95 per trade with on-line brokers to over $100 per trade with traditional brokers. Opposite to that, typically stock commissions are directly related to the level of service offered by the broker. At the high end, traditional brokers offer full access to research, analyst stock recommendations, etc. In contrast, on-line Forex brokers charge significantly lower commission and transaction fees.
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