One fundamental question most people ask themselves about the FOREX market is what currencies do i trade?
There are many currencies in the world but not all of them can be traded. Currencies that are mostly traded include the USD (us dollar), JPY (Japanese Yen), GBP (British Pound), AUD (Australian Dollar), CAD (Canadian Dollar), EUR (Euro), CHF (Swiss Franc) and the NZD (New zealand dollar). The listed currencies are what a major part of the FOREX market work with. There are 27 currency pairs which can be derived but only 18 are conventionally quoted by forex market makers as a result of their liquidity These pairs are:
USD/CAD, EUR/JPY, EUR/USD, EUR/CHF, USD/CHF, EUR/GBP, GBP/USD, AUD/CAD, NZD/USD, GBP/CHF, AUD/USD, GBP/JPY, USD/JPY, CHF/JPY, EUR/CAD, AUD/JPY, EUR/AUD, AUD/NZD.
To understand the trading process we are going to move use of a little illustration:
Suppose you decide to go into the FOREX market and you successfully invest $1000 of your own money knowing fully well that with current margin accounts (as mentioned earlier), you can control a lot more than your investment. Now you've gone over every trading platform and broker, selected the most suitable, gone over the trends of the market and now you want to move on to the next thing which is trading. This is where the analysis comes into play whether you choose the Fundamental or Technical approach.
After analyzing current market trends and exchange rates you select a currency pair which you are satisfied with. Now the analysis process begins: you go ahead with a trading system you are certain works (make sure you take into consideration the concerns of such a system) and implement it ( make a prediction whether a currency will drop or increase and select the time till trade termination).
One question people ask me is: isn't FOREX like gambling?
Well yes and no, see in gambling you go in either to win or loose everything but in the FX market you can only lose what you stake and nothing more. This is somewhat confusing at first but when you start trading you'll understand it better. Until next time, keep trading.
Saturday, October 2, 2010
Sunday, September 26, 2010
Issues you must consider when choosing a FOREX platform/broker
Issues you must consider when choosing a FOREX platform/broker
Is anybody there any professional assistance?
Experts who are willing to provide answers to your questions and your concerns when the need arises is one key requirement of a select platform broker. Do they provide key insight into the FOREX market? also another fundamental requirment of any professional assistance services you may choose to work with.
Are there actually real people who can offer assistance?
One may select a platform that is automated and doesn't have any real people who can attend to your concerns and answer your questions. In some cases all you may get from such automated systems is a technical review or analysis which can be rather fraustrating.
Is thier internet platform friendly and easy to use?
Is software required? Are you restricted to say, a specific terminal?
This are important aspects that must not be overlooked.
Do they work round the clock or only during banking hours? Can I withdraw when i want to?
I emphasize that working with a platform that provides round the clock access to your funds is key. Cause if you work with a platform that only works during working hours it could be a problem.
How time consuming is the account set up process? Can you start trading once the account is set up?
You do not have to wait for processing of your request. There are platforms that provide instant trading once your account is set up and funds deposited.
Also the lowest amount that can be risked?
This is in most cases of little concern to high target traders but is nevertheless important. With current trends there are possibilities to risk even 50 US dollars.
Hidden costs, freezing and security.
Does your select platform allow for freezing for a few seconds before you make your final decision?
Are there any hidden costs? Are you charged commissions on trading? What kind of security and safety measures do they have in place?
Terms and Streaming Quotes
Can the trading terms be set to your own select preferences?
Are the rates presented the most current?
Business partners and reputation
Do they (platform or broker(s)) have well known business partners. Do they have a solid reputation?
Full Transparency and Online Access
Do they provide you with down to the bone detailed reports with the click of a button?
Can you control your account from anywhere in the world?
The above mentioned should be reviewed to ensure that you don't run into any kind of losses.
Is anybody there any professional assistance?
Experts who are willing to provide answers to your questions and your concerns when the need arises is one key requirement of a select platform broker. Do they provide key insight into the FOREX market? also another fundamental requirment of any professional assistance services you may choose to work with.
Are there actually real people who can offer assistance?
One may select a platform that is automated and doesn't have any real people who can attend to your concerns and answer your questions. In some cases all you may get from such automated systems is a technical review or analysis which can be rather fraustrating.
Is thier internet platform friendly and easy to use?
Is software required? Are you restricted to say, a specific terminal?
This are important aspects that must not be overlooked.
Do they work round the clock or only during banking hours? Can I withdraw when i want to?
I emphasize that working with a platform that provides round the clock access to your funds is key. Cause if you work with a platform that only works during working hours it could be a problem.
How time consuming is the account set up process? Can you start trading once the account is set up?
You do not have to wait for processing of your request. There are platforms that provide instant trading once your account is set up and funds deposited.
Also the lowest amount that can be risked?
This is in most cases of little concern to high target traders but is nevertheless important. With current trends there are possibilities to risk even 50 US dollars.
Hidden costs, freezing and security.
Does your select platform allow for freezing for a few seconds before you make your final decision?
Are there any hidden costs? Are you charged commissions on trading? What kind of security and safety measures do they have in place?
Terms and Streaming Quotes
Can the trading terms be set to your own select preferences?
Are the rates presented the most current?
Business partners and reputation
Do they (platform or broker(s)) have well known business partners. Do they have a solid reputation?
Full Transparency and Online Access
Do they provide you with down to the bone detailed reports with the click of a button?
Can you control your account from anywhere in the world?
The above mentioned should be reviewed to ensure that you don't run into any kind of losses.
Friday, September 24, 2010
FOREX trading 101
Today we are gonna start this lesson by analyzing some of the current currency trends.We'll start with the exchange rate of the dollar to the pound. The dollar is known to be a very strong currency meaning it is not subject to large losses and constant fluctuations in market value. The present dollar/pound ratio is as follows:
As of today the BPD/USD exchange rate is 1/1.57150 meaning the equivalent of one british pound is 1.57150 US dollars.
If at 2:00pm GMT the exchange rate was 1/1.57001 with a decrease of 0.00149 US dollars i would gain if i had analyzed that the market value of the dollar would rise at say current time 6:44pm GMT.On the other hand i would have lost if i had predicted the market value to depriciate. This is one very important aspect of the FOREX market that is understanding the factors that affect the rise and fall of the dollar and the seasons as well. I say seasons because in say December the dollar might lose value cause the British pound gained in percentage value on international trade and commodities such as gold, oil e.t.c.
To avoid misunderstanding the trends it is essential to make use of prediction software and of course real life practical analysis. The software analyzes the past and present trends in order to predict the future trends. The essence of real life analysis is to understand how the currency being studied shrinks or grows with time, season and the international economy as a whole.
Now we will move on to the basic FOREX forecast methods:
There are two, these are:
1.Technical Analysis: This is a method of predicting price movements and future market trends by studying what has occured in the past using charts. Technical analysis deals primarily with what has actually happened in the market, rather than what should happen, and takes into account the price of instruments and the volume of trading, and creates charts from that data as a primary tool, of course. The major advantage of technical analysis is that experienced analysts can follow many markets and market instruments simultaneously.
2. Fundamental Analysis: Is a method of predicting future price movements of a financial instrument based on economic, political, enviromental and other relevant factors, as well as data that will affect the basic supply and demand of whatever underlies the financial instrument. Practically, many market players make use of technical analysis in conjuction with fundamental analysis to determine their trading strategy.
Now you have an idea of what the next lesson would contain.
As of today the BPD/USD exchange rate is 1/1.57150 meaning the equivalent of one british pound is 1.57150 US dollars.
If at 2:00pm GMT the exchange rate was 1/1.57001 with a decrease of 0.00149 US dollars i would gain if i had analyzed that the market value of the dollar would rise at say current time 6:44pm GMT.On the other hand i would have lost if i had predicted the market value to depriciate. This is one very important aspect of the FOREX market that is understanding the factors that affect the rise and fall of the dollar and the seasons as well. I say seasons because in say December the dollar might lose value cause the British pound gained in percentage value on international trade and commodities such as gold, oil e.t.c.
To avoid misunderstanding the trends it is essential to make use of prediction software and of course real life practical analysis. The software analyzes the past and present trends in order to predict the future trends. The essence of real life analysis is to understand how the currency being studied shrinks or grows with time, season and the international economy as a whole.
Now we will move on to the basic FOREX forecast methods:
There are two, these are:
1.Technical Analysis: This is a method of predicting price movements and future market trends by studying what has occured in the past using charts. Technical analysis deals primarily with what has actually happened in the market, rather than what should happen, and takes into account the price of instruments and the volume of trading, and creates charts from that data as a primary tool, of course. The major advantage of technical analysis is that experienced analysts can follow many markets and market instruments simultaneously.
2. Fundamental Analysis: Is a method of predicting future price movements of a financial instrument based on economic, political, enviromental and other relevant factors, as well as data that will affect the basic supply and demand of whatever underlies the financial instrument. Practically, many market players make use of technical analysis in conjuction with fundamental analysis to determine their trading strategy.
Now you have an idea of what the next lesson would contain.
Wednesday, September 22, 2010
Common questions Begining traders ask
Questions i Often get asked are:
How does one profit in the Forex Market?
How risky is Forex trading?
How do i start trading?
How do i keep track of my trading?
I'll start by saying to make a profit in the FOREX market you buy currencies low and sell high. The profit potential comes from the fluctuations in the currency exchange market. Unlike the stock market, where shares are purchased, Forex trading does not require physical purchase of the currencies, but rather involves contracts for amount and exchange of currency pairs.
Now on to the second question as to how risky the trade is. You see in forex you cannot lose more than your initial investment, the profit you may make however is unlimited, but you can never lose more than the margin. I strongly advise to never risk more than you can afford to lose.
To start trading using the Easy- Forex Trading Platform, or any other you firstly have to register and then deposit the amount you wish to have in your margin account so you can start working on your investment. Payment is by credit cards, PayPal and in some cases western Union. Once deposit is recieved you're ready to start trading.
As for monitoring your trades, that is done online anytime, anywhere. You are given full control.
So now that the fundamental introductory questions are answered. We can move on to the next thing.
How does one profit in the Forex Market?
How risky is Forex trading?
How do i start trading?
How do i keep track of my trading?
I'll start by saying to make a profit in the FOREX market you buy currencies low and sell high. The profit potential comes from the fluctuations in the currency exchange market. Unlike the stock market, where shares are purchased, Forex trading does not require physical purchase of the currencies, but rather involves contracts for amount and exchange of currency pairs.
Now on to the second question as to how risky the trade is. You see in forex you cannot lose more than your initial investment, the profit you may make however is unlimited, but you can never lose more than the margin. I strongly advise to never risk more than you can afford to lose.
To start trading using the Easy- Forex Trading Platform, or any other you firstly have to register and then deposit the amount you wish to have in your margin account so you can start working on your investment. Payment is by credit cards, PayPal and in some cases western Union. Once deposit is recieved you're ready to start trading.
As for monitoring your trades, that is done online anytime, anywhere. You are given full control.
So now that the fundamental introductory questions are answered. We can move on to the next thing.
What system should you adopt in your trades?
Another question that is often asked by aspiring traders is “What kind of trading approach
should I use – day trading, swing trading, position trading? How many indicators should I
use? Should I follow the TV news channels?...”
If you are facing similar dilemmas let me try to make an analogy.
If you were attacked in a dark alley and you felt that your life
was in real danger what kind of defence technique
would you attempt to use.
Would you attempt to kick your assailant with some fancy
kung fu move that you saw in a movie?
Or would you use some basic but brutally
effective “knee to the groin”, “thumb to the eye” technique
that is easy to implement and
that you are 100% certain will have an effect?
When you have your hard earned money
riding on your trades maybe your life is not at stake
but you and your family’s livelihood
is. The goal of all the other traders in the market is
to take your money. And if you are going to play around
with some fancy tools and indicators that you don’t even understand
you can be assured that your hard earned money
will be paying someone’s BMW lease payments.
That said here's a sytem which is tried and tested: The FOREX bulletproof system
should I use – day trading, swing trading, position trading? How many indicators should I
use? Should I follow the TV news channels?...”
If you are facing similar dilemmas let me try to make an analogy.
If you were attacked in a dark alley and you felt that your life
was in real danger what kind of defence technique
would you attempt to use.
Would you attempt to kick your assailant with some fancy
kung fu move that you saw in a movie?
Or would you use some basic but brutally
effective “knee to the groin”, “thumb to the eye” technique
that is easy to implement and
that you are 100% certain will have an effect?
When you have your hard earned money
riding on your trades maybe your life is not at stake
but you and your family’s livelihood
is. The goal of all the other traders in the market is
to take your money. And if you are going to play around
with some fancy tools and indicators that you don’t even understand
you can be assured that your hard earned money
will be paying someone’s BMW lease payments.
That said here's a sytem which is tried and tested: The FOREX bulletproof system
Thursday, September 16, 2010
Leveraging in FOREX, how to avoid loses
The FOREX market is a highly volatile market,
which requires a careful studying of trends.
We are going to examine some of those trends.
Trend 1:
Simply said, no other trading instrument comes even closely to forex market
when it comes to liquidity, 24hr market environment
and last but not the least, profit potential.
Forex (currency) market is the largest (most liquid) financial market
in the world, with an average daily volume of more than US$ 1.5 trillion,
which is more than all of the global equity markets combined.
Forex trading day starts in Wellington, New Zealand followed by Sydney, Australia,
Hong Kong and Singapore. Three hours later trading day begins in Dubai (UAE) and
other Middle Eastern countries. In a couple of hours they are followed by Frankfurt,
Zurich, Paris, Rome… London is the last one to open in Europe and five hours
later it is followed by New York, Chicago and finally the West Coast.
The busiest hours are early European mornings because at that time major
Asian exchanges are still open also European afternoons because
at that time major US markets are open at the same time as Europe.
Therefore, wherever you live and whatever your work hours are
you can always find some time to participate in forex trading as opposed to stock market where you are usually limited to the regular business hours.
Another property of forex market that makes it an excellent
trading instrument is use of leverage. Many beginning traders
don’t fully understand the concept of leverage.
Basically, if you have a start up capital of $5,000
and if you trade on a 1:50 margin you can effectively control a capital of $250,000.
However, a two percent move against you and your capital is completely wiped out.
If you are a beginning trader you should not use more than 1:20 margin until you get comfortable and profitable and then and only then
you can attempt to use higher margins.
What does 1:20 margin mean?
It means that with your $5,000 you will control a capital of $100,000.
Let’s say you are trading EUR/USD and by using our entry strategy
you have decided to enter the trade on a long side.
That means that you are betting that USD will depreciate against Euro.
Let’s say current EUR/USD rate is 1.305.
Again, if your trading capital is $5,000 and you are using 1:20
leverage you will effectively be exchanging $100,000 to Euros.
If the current rate is 1.305 you will receive 100,000/1.305 = 76,628 Euros.
If the trade goes in your direction the margin will work in your favour and 1% decline in USD will mean 20% increase in your start up capital.
So if EUR/USD rate moves from 1.305 to 1.318 you will be able to
exchange your 76,628 Euros back to $101,000 for a profit of $1,000.
Since your start up capital was $5,000 it is effectively a 20% increase in your account.
However, if the trade went against you and USD appreciated 1%
vs. Euro your account would be reduced to $4,000.
That would not have happened as our strategy has built in hard stops
to prevent such an outcome.
which requires a careful studying of trends.
We are going to examine some of those trends.
Trend 1:
Simply said, no other trading instrument comes even closely to forex market
when it comes to liquidity, 24hr market environment
and last but not the least, profit potential.
Forex (currency) market is the largest (most liquid) financial market
in the world, with an average daily volume of more than US$ 1.5 trillion,
which is more than all of the global equity markets combined.
Forex trading day starts in Wellington, New Zealand followed by Sydney, Australia,
Hong Kong and Singapore. Three hours later trading day begins in Dubai (UAE) and
other Middle Eastern countries. In a couple of hours they are followed by Frankfurt,
Zurich, Paris, Rome… London is the last one to open in Europe and five hours
later it is followed by New York, Chicago and finally the West Coast.
The busiest hours are early European mornings because at that time major
Asian exchanges are still open also European afternoons because
at that time major US markets are open at the same time as Europe.
Therefore, wherever you live and whatever your work hours are
you can always find some time to participate in forex trading as opposed to stock market where you are usually limited to the regular business hours.
Another property of forex market that makes it an excellent
trading instrument is use of leverage. Many beginning traders
don’t fully understand the concept of leverage.
Basically, if you have a start up capital of $5,000
and if you trade on a 1:50 margin you can effectively control a capital of $250,000.
However, a two percent move against you and your capital is completely wiped out.
If you are a beginning trader you should not use more than 1:20 margin until you get comfortable and profitable and then and only then
you can attempt to use higher margins.
What does 1:20 margin mean?
It means that with your $5,000 you will control a capital of $100,000.
Let’s say you are trading EUR/USD and by using our entry strategy
you have decided to enter the trade on a long side.
That means that you are betting that USD will depreciate against Euro.
Let’s say current EUR/USD rate is 1.305.
Again, if your trading capital is $5,000 and you are using 1:20
leverage you will effectively be exchanging $100,000 to Euros.
If the current rate is 1.305 you will receive 100,000/1.305 = 76,628 Euros.
If the trade goes in your direction the margin will work in your favour and 1% decline in USD will mean 20% increase in your start up capital.
So if EUR/USD rate moves from 1.305 to 1.318 you will be able to
exchange your 76,628 Euros back to $101,000 for a profit of $1,000.
Since your start up capital was $5,000 it is effectively a 20% increase in your account.
However, if the trade went against you and USD appreciated 1%
vs. Euro your account would be reduced to $4,000.
That would not have happened as our strategy has built in hard stops
to prevent such an outcome.
Tuesday, September 14, 2010
Introduction to Forex Bullet proof system
For those unfamiliar with the term, FOREX (FOReign EXchange market), refers to an international exchange market where currencies are bought and sold. The Foreign Exchange Market that we see today began in the 1970's, when free exchange rates and floating currencies were introduced. In such an environment only participants in the market determine the price of one currency against another, based upon supply and demand for that currency.
FOREX is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade volume reaching between 1 and 3.2 trillion US dollars. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.
The short and long of it is that there is a lot of money to be made in Forex if the right strategies are employed.
If you've been checking out ways to get started in investing, chances are you've heard about the foreign exchange market, or FOREX trading. If you're unfamiliar with this type of trading, it can all seem a bit too hard, but in fact the hardest part is getting started, as once you are started the rest is a breeze.
In the past, foreign exchange was the territory of large players, such as multi-national corporations and national banks. However in the 1980s the rules were changed, giving smaller investors the chance to participate using margin accounts. The popularity of FOREX trading has increased mainly because of these margin accounts, as people can participate with much smaller amounts of money. Basically, having a 100:1 margin account means that you can control $100,000 using only $1,000 of your own money. Also recent forex micro accounts make it possible to build your skills as a trader by starting with as little as $10. sites such as: www.pfgfxlite.com/ make it possible.
There are also many companies that are showing an increase in web traffic to their businesses and are seeing a huge return on their investment. All you have to do is a search on any big search engine for a term related to Forex and the competing results will blow you out of the water.
Most businesses have been around the market for an average of 10 years or more and will deliver the knowledge to the consumer. This market can be fairly easy to learn and in a short amount of time, a person can have an understanding of what the best Forex platform which will give them the most return on investment.
As with other things on the web, someone always comes out with a software to make this much faster and easier and that company is OmniForex. They have invested a lot of time and money into the creation of a software that will take the complex issues out of trading in today's market.
OmniForex delivers a software that gives the opportunity to profit with the click of a mouse. In addition to the software, there are courses designed to teach everyone the ins and outs of the
market.
Every day on the average, there is about 1.9 trillion U.S. dollars exchanged around the globe and many will profit and just as many will lose. There is one thing for sure, this is a volatile market and that is why it is vital to use every advantage to your benefit. Using a software that can take the human factor out of the equation can only be considered an advantage to the trader.
Note that even though high yield FOREX robots yield high profits in the long run. They aren't intuitive-- meaning they are not substitutes for highly skilled currency professionals.
It takes software to beat software and a computer is nothing but that. Software does not need rest, food, or water to survive and works 24/7. So, why not put the odds in your favor and make a profit. Give yourself that advantage by making use of a solid trading system that works 100% guaranteed.
FOREX is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade volume reaching between 1 and 3.2 trillion US dollars. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.
The short and long of it is that there is a lot of money to be made in Forex if the right strategies are employed.
If you've been checking out ways to get started in investing, chances are you've heard about the foreign exchange market, or FOREX trading. If you're unfamiliar with this type of trading, it can all seem a bit too hard, but in fact the hardest part is getting started, as once you are started the rest is a breeze.
In the past, foreign exchange was the territory of large players, such as multi-national corporations and national banks. However in the 1980s the rules were changed, giving smaller investors the chance to participate using margin accounts. The popularity of FOREX trading has increased mainly because of these margin accounts, as people can participate with much smaller amounts of money. Basically, having a 100:1 margin account means that you can control $100,000 using only $1,000 of your own money. Also recent forex micro accounts make it possible to build your skills as a trader by starting with as little as $10. sites such as: www.pfgfxlite.com/ make it possible.
There are also many companies that are showing an increase in web traffic to their businesses and are seeing a huge return on their investment. All you have to do is a search on any big search engine for a term related to Forex and the competing results will blow you out of the water.
Most businesses have been around the market for an average of 10 years or more and will deliver the knowledge to the consumer. This market can be fairly easy to learn and in a short amount of time, a person can have an understanding of what the best Forex platform which will give them the most return on investment.
As with other things on the web, someone always comes out with a software to make this much faster and easier and that company is OmniForex. They have invested a lot of time and money into the creation of a software that will take the complex issues out of trading in today's market.
OmniForex delivers a software that gives the opportunity to profit with the click of a mouse. In addition to the software, there are courses designed to teach everyone the ins and outs of the
market.
Every day on the average, there is about 1.9 trillion U.S. dollars exchanged around the globe and many will profit and just as many will lose. There is one thing for sure, this is a volatile market and that is why it is vital to use every advantage to your benefit. Using a software that can take the human factor out of the equation can only be considered an advantage to the trader.
Note that even though high yield FOREX robots yield high profits in the long run. They aren't intuitive-- meaning they are not substitutes for highly skilled currency professionals.
It takes software to beat software and a computer is nothing but that. Software does not need rest, food, or water to survive and works 24/7. So, why not put the odds in your favor and make a profit. Give yourself that advantage by making use of a solid trading system that works 100% guaranteed.
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