I assume you want to learn to trade Forex since you are reading this article. Some people believe that you need to possess some personal traits to be able to trade currencies successfully. I believe that success in trading is a learnable skill. Anyone can learn to trade. The only thing you need is a strong desire to succeed. It is that desire that will guide you through tough times in your course of learning.
Besides a formal knowledge of technical and fundamental analysis you need to develop a disciplined approach to trading. If you are jumping form one trading system to another as soon as it starts losing money you will not succeed. What is the best way to develop discipline and a proper mindset for trading? This is the question you need to be continuously asking yourself.
I found a way that works best for me. And here is why. Most people come to Forex and any other business looking for freedom. You probably heard expressions like "Be your own boss" or "fire your boss". People come from the JOB environment with the job mindset and they fail because they don't have the mindset to be accountable to themselves. They cannot finish what they have planned to do.
Once I discovered this fact the rest was much easier. What you need to do is to find an accountability partner. It can be your friend or relative. The best-case scenario if it is a mentor who successfully trades Forex. But it can be someone who does not have any knowledge of trading. I personally have my wife to hold me accountable to finish my tasks. I report to her on a daily basis.
I think this will work not only with trading but also with any business you would like to get involved with. These are the steps you can take to develop necessary discipline to follow your daily or weekly routine. Once you have a partner that is going to hold you accountable explain him what tasks are you going to perform every day and what you want him or her to check with you.
For example pick a trading system and make a commitment to spend certain amount of time back-testing your system. Define how many trades on a historical data you are going to take each day. Now make a list of things that you want to develop or get rid of in your real time trading. It can be something like "I need to stay in a trade until price hits the stop-loss or take-profit level", "Never risk more than 2% of the account in any single trade", etc.
At the end of the day report to your partner how well you have managed to follow through your rules. It doesn't matter if a trade was successful or not. Even if you lost a trade but managed to stick to your rules count it as a success. If you made a profit by violating your rules it's a failure. Remember profit in a single trade will not make you a successful trader. Following your trading rules will make you a profitable trader in a long run.
Albert Schmidt is a part-time currency trader. After quite a long time of struggle he learned to make consistent profit trading in Forex. Review a trading strategy he successfully uses in his trading Forex.
Article Source: http://EzineArticles.com/?expert=Albert_Schmidt
By Albert Schmidt
Tuesday, October 7, 2008
Thursday, September 25, 2008
Forex Trading - A Simple Fact That Can Lead You to Triple Digit Gains
If you understand the fact enclosed, you will have a clearer insight in terms of what it takes to win at forex trading. Most traders have no idea of its significance and lose - make sure you understand it and its significance...
Here is the fact you need to know first:
30 years ago 95% of traders lost money and the same ratio applies today this is DESPITE all the advances we have seen in computer power, software, speed of communications and quality of news - the ratio remains the same.
So what you may say?
Well despite all the advances we have seen in technology, its NOT helped the ratio of winners to losers and this leads to some obvious conclusions.
Success does NOT rely on the following:
- Up to date news
- Complicated mathematical formulas
- Trying to be clever or complex
You have numerous vendors telling you that prices move to mathematical formulas and they sell junk systems, on the back of this theory - but all they have is a simulation backwards so they fail going forward.
Many so called experts also tell you that you should work hard and be complex etc but this has never lead to success. There is no correlation between working hard and being clever and success.
There is no Code of Market Behaviour
People think they can apply technology and crack the code of the market but there is no code and prices DON'T Move to complex mathematical formulas.
Forex markets are simply an odds game and the way to win has been the same for decades:
- Don't work hard
- work smart
- Use a simple system as its more robust
- Forget trying to be clever or complicated
- keep it simple!
- Above all you will need the traits of confidence and discipline to win
The Real Key to Success
Is a simple robust trading method which you can apply with discipline.
Discipline is essential and your trading success is reliant on this trait, as much as method. There is no point in having a good trading method, if you don't have the discipline to trade it through a period of losses.
Losing periods happen and you must keep going, until you hit a home run. If you have no discipline to follow your method you don't have a method!
Most traders think they can predict and refuse to take losses or throw in the towel early whereas, if they had kept their discipline they could have won.
Method and Disciplined Application
The way to make money is to combine the two and get a solid forex education and have confidence in your system, so you can apply it with discipline.
Today most traders make the fatal mistake of believing in experts and automatic profits with no effort and they lose. If you want to win get the right forex education keep it simple, get a disciplined mindset and win.
Anyone Can Enjoy Success But..
Always remember - anyone can learn forex trading and win and it's not the market that beats the trader, it's the trader who beats himself.
You can't blame your tools no matter how clever they are and as they say a bad workman always blames his tools!
If you understand the above you will see success is within your grasp, if you want to win you can - good luck!
NEW! 2 X FREE ESSENTIAL TRADER PDFS ESSENTIAL FOREX TRADING COURSE
For free 2 x trading Pdf's, with 50 of pages of essential info on a RISK FREE Forex Trading Course visit our website at: http://www.learncurrencytradingonline.com.
Article Source: http://EzineArticles.com/?expert=Samuel_Leslie_Berkovits
By Samuel Leslie Berkovits
Here is the fact you need to know first:
30 years ago 95% of traders lost money and the same ratio applies today this is DESPITE all the advances we have seen in computer power, software, speed of communications and quality of news - the ratio remains the same.
So what you may say?
Well despite all the advances we have seen in technology, its NOT helped the ratio of winners to losers and this leads to some obvious conclusions.
Success does NOT rely on the following:
- Up to date news
- Complicated mathematical formulas
- Trying to be clever or complex
You have numerous vendors telling you that prices move to mathematical formulas and they sell junk systems, on the back of this theory - but all they have is a simulation backwards so they fail going forward.
Many so called experts also tell you that you should work hard and be complex etc but this has never lead to success. There is no correlation between working hard and being clever and success.
There is no Code of Market Behaviour
People think they can apply technology and crack the code of the market but there is no code and prices DON'T Move to complex mathematical formulas.
Forex markets are simply an odds game and the way to win has been the same for decades:
- Don't work hard
- work smart
- Use a simple system as its more robust
- Forget trying to be clever or complicated
- keep it simple!
- Above all you will need the traits of confidence and discipline to win
The Real Key to Success
Is a simple robust trading method which you can apply with discipline.
Discipline is essential and your trading success is reliant on this trait, as much as method. There is no point in having a good trading method, if you don't have the discipline to trade it through a period of losses.
Losing periods happen and you must keep going, until you hit a home run. If you have no discipline to follow your method you don't have a method!
Most traders think they can predict and refuse to take losses or throw in the towel early whereas, if they had kept their discipline they could have won.
Method and Disciplined Application
The way to make money is to combine the two and get a solid forex education and have confidence in your system, so you can apply it with discipline.
Today most traders make the fatal mistake of believing in experts and automatic profits with no effort and they lose. If you want to win get the right forex education keep it simple, get a disciplined mindset and win.
Anyone Can Enjoy Success But..
Always remember - anyone can learn forex trading and win and it's not the market that beats the trader, it's the trader who beats himself.
You can't blame your tools no matter how clever they are and as they say a bad workman always blames his tools!
If you understand the above you will see success is within your grasp, if you want to win you can - good luck!
NEW! 2 X FREE ESSENTIAL TRADER PDFS ESSENTIAL FOREX TRADING COURSE
For free 2 x trading Pdf's, with 50 of pages of essential info on a RISK FREE Forex Trading Course visit our website at: http://www.learncurrencytradingonline.com.
Article Source: http://EzineArticles.com/?expert=Samuel_Leslie_Berkovits
By Samuel Leslie Berkovits
Forex Trading System - Following the Trend
You probably heard an expression "trend is your friend" in Forex trading. Indeed if you have any experience in trading you find out that trading along the trend is like swimming along the stream of a river. Trading against the trend is like swimming against the stream - you may move a little but get exhausted very fast and the river will take you back. I would like to discuss some trading rules for trend following systems as well as how to identify the trend.
Sometimes it can be surprisingly hard to identify the trend for a new trader. If you have a hard time of identifying a trend I have a very simple rule for you. Go to higher timeframe of your chart and place 21-period moving average indicator. If it point up you have an uptrend if it points down you have a downtrend. So for example if you trade on 15-minute chart then move up to 1-hour chart and place you indicator there. This is the easiest way to identify the trend. I know it is not perfect but it works for me better than any other sophisticated trend indicators.
Now if you have you moving average in horizontal position I would advise you to stay out of the market. When price is choppy and market is flat it is the sure fire way to lose money by getting stopped out too many times. On the other hand when you have a strong trend then taking profit becomes a breeze.
My favorite trend following system is based on a simple rule: "buy the dips in an uptrend and sell the rallies in a downtrend". Once I identify a strong trend I place the relative strength indicator (RSI) on my chart. It actually shows you the dips in the uptrend and rallies in the downtrend. Let's say you find out on 1-hour chart a strong trend upwards. You switch back to 15-minute chart and as soon as RSI touches level of 30% you have a dip in an uptrend and you buy the currency pair. For the strong downtrend as soon as RSI touches the level of 70% you have your rally and you should sell the pair.
Remember this rule works only for strong trends. It works for me when I see the moving average have a slope of at least 30-45 degrees. Another thing to consider is that you need some way to determine when the trend is over. It's not an easy task since all indicators are lugging in time. So usually in a strong trending market I have a few winning trades and as soon as a trade gets stopped out I know trend is changing or at least it's becoming weaker. So that's a sign to stop taking trades with this system.
Albert Schmidt is a part-time currency trader. After quite a few months of struggle he learned to make consistent profit trading in Forex. Review a trading system he successfully uses in his trades.
Article Source: http://EzineArticles.com/?expert=Albert_Schmidt
By Albert Schmidt
Sometimes it can be surprisingly hard to identify the trend for a new trader. If you have a hard time of identifying a trend I have a very simple rule for you. Go to higher timeframe of your chart and place 21-period moving average indicator. If it point up you have an uptrend if it points down you have a downtrend. So for example if you trade on 15-minute chart then move up to 1-hour chart and place you indicator there. This is the easiest way to identify the trend. I know it is not perfect but it works for me better than any other sophisticated trend indicators.
Now if you have you moving average in horizontal position I would advise you to stay out of the market. When price is choppy and market is flat it is the sure fire way to lose money by getting stopped out too many times. On the other hand when you have a strong trend then taking profit becomes a breeze.
My favorite trend following system is based on a simple rule: "buy the dips in an uptrend and sell the rallies in a downtrend". Once I identify a strong trend I place the relative strength indicator (RSI) on my chart. It actually shows you the dips in the uptrend and rallies in the downtrend. Let's say you find out on 1-hour chart a strong trend upwards. You switch back to 15-minute chart and as soon as RSI touches level of 30% you have a dip in an uptrend and you buy the currency pair. For the strong downtrend as soon as RSI touches the level of 70% you have your rally and you should sell the pair.
Remember this rule works only for strong trends. It works for me when I see the moving average have a slope of at least 30-45 degrees. Another thing to consider is that you need some way to determine when the trend is over. It's not an easy task since all indicators are lugging in time. So usually in a strong trending market I have a few winning trades and as soon as a trade gets stopped out I know trend is changing or at least it's becoming weaker. So that's a sign to stop taking trades with this system.
Albert Schmidt is a part-time currency trader. After quite a few months of struggle he learned to make consistent profit trading in Forex. Review a trading system he successfully uses in his trades.
Article Source: http://EzineArticles.com/?expert=Albert_Schmidt
By Albert Schmidt
Thursday, September 18, 2008
Forex Education - 5 Key Points to Lead You to Currency Trading Success
If you want to win at forex trading, then you can it's a learned skill. That's the good news however 95% of traders lose and you must understand the following key points and make them part of your essential forex education. If you do, you will win...
Here are your key points, in no particular order of importance - there all important.
1. Forex Trading is NOT Easy!
Most traders just think they can buy $100 buck robot or get a mentor and someone will lead them to success. This is naïve and you know, if you want success at anything you need to work at the basics and do your homework.
Don't believe the sire fire systems or forex robots which never have a real track record, just a back tested simulation and keep in mind trading forward is what counts and that's hard.
Sure it's hard but that's why forex trading offers such huge rewards in terms of the effort you put in.
2. You are Responsible
If you accept you are responsible for your destiny, you will put in the effort to get the right forex education. You will learn a simple forex trading strategy which is robust, you understand and can have confidence in. If you have confidence then you will be able to acquire the next key trait.
3. Discipline is the Key
When you trade forex you are going to lose, the market is going to make you look a fool but that's life in forex and doesn't mean you can't win - you can.
What you must do is, have the discipline to apply you forex trading strategy through periods of losses, until you hit a home run. To win you must learn to lose gracefully in the short term and keep your eyes on the long term prize.
Many traders believe they can trade with little or no drawdown. They listen to the so called experts but the truth is - you will have to face weeks of losses at a time and discipline is needed in these periods, for you to emerge a winner.
4. You Need to Trade in Isolation
In society we are taught to agree with the crowd but in forex trading this leads to disaster, as 95% of traders lose money. You have to stay away from the herd and even when your emotions are telling you to conform, you need to stand aside. Get sucked into the herd mentality and you will end up with the 95% of losers.
5. Patience
Not only do you need patience to wait for the right opportunities, you also need patience to take your losses and more importantly, to run your profits.
Many traders get so excited when they have a profit, they move to soon to protect it or bank it; whereas if they hung on they could have made huge gains.
Becoming a Winner
If you want to become a winner in forex, you need all the above attributes and if you do achieve them, you will be on the way to currency trading success. They can lead you to a great second income or even a life changing one, in around 30 minutes a day.
The key point of this article on forex education is:
You can win with a simple system and more importantly, the right mindset and this is what most traders fail to achieve.
NEW! 2 X FREE ESSENTIAL TRADER PDFSESSENTIAL FOREX TRADING COURSE
For free 2 x trading Pdf's, with 50 of pages of essential info and a RISK FREE Forex Trading Course visit our website at: http://www.learncurrencytradingonline.com.
Article Source: http://EzineArticles.com/?expert=Samuel_Leslie_Berkovits
By Samuel Leslie Berkovits
Here are your key points, in no particular order of importance - there all important.
1. Forex Trading is NOT Easy!
Most traders just think they can buy $100 buck robot or get a mentor and someone will lead them to success. This is naïve and you know, if you want success at anything you need to work at the basics and do your homework.
Don't believe the sire fire systems or forex robots which never have a real track record, just a back tested simulation and keep in mind trading forward is what counts and that's hard.
Sure it's hard but that's why forex trading offers such huge rewards in terms of the effort you put in.
2. You are Responsible
If you accept you are responsible for your destiny, you will put in the effort to get the right forex education. You will learn a simple forex trading strategy which is robust, you understand and can have confidence in. If you have confidence then you will be able to acquire the next key trait.
3. Discipline is the Key
When you trade forex you are going to lose, the market is going to make you look a fool but that's life in forex and doesn't mean you can't win - you can.
What you must do is, have the discipline to apply you forex trading strategy through periods of losses, until you hit a home run. To win you must learn to lose gracefully in the short term and keep your eyes on the long term prize.
Many traders believe they can trade with little or no drawdown. They listen to the so called experts but the truth is - you will have to face weeks of losses at a time and discipline is needed in these periods, for you to emerge a winner.
4. You Need to Trade in Isolation
In society we are taught to agree with the crowd but in forex trading this leads to disaster, as 95% of traders lose money. You have to stay away from the herd and even when your emotions are telling you to conform, you need to stand aside. Get sucked into the herd mentality and you will end up with the 95% of losers.
5. Patience
Not only do you need patience to wait for the right opportunities, you also need patience to take your losses and more importantly, to run your profits.
Many traders get so excited when they have a profit, they move to soon to protect it or bank it; whereas if they hung on they could have made huge gains.
Becoming a Winner
If you want to become a winner in forex, you need all the above attributes and if you do achieve them, you will be on the way to currency trading success. They can lead you to a great second income or even a life changing one, in around 30 minutes a day.
The key point of this article on forex education is:
You can win with a simple system and more importantly, the right mindset and this is what most traders fail to achieve.
NEW! 2 X FREE ESSENTIAL TRADER PDFSESSENTIAL FOREX TRADING COURSE
For free 2 x trading Pdf's, with 50 of pages of essential info and a RISK FREE Forex Trading Course visit our website at: http://www.learncurrencytradingonline.com.
Article Source: http://EzineArticles.com/?expert=Samuel_Leslie_Berkovits
By Samuel Leslie Berkovits
Forex Trading Signals
Most Forex firms offer sending their subscribers Forex signals, which are used to buy and sell currencies. Forex signals are referred to as entry and exit signals.
Forex firms do a tremendous amount of in-depth research and analyses dealing with the currencies their dealers are trading in. Signals are usually sent out and only are active for a short period of time.
The first signal is sent out at 08:30 and remains actual until 12:30. The second signal is sent at 12:30 and is actual until 16:30. Lastly, the third signal is sent at 16:30. These times are all given in GMT, so be sure to adjust for local time changes.
Forex trading and dealing is an extremely competitive business. Investors tend to subscribe to Forex dealers and companies with great references and background.
Their information tends to be more accurate and genuine than their less experienced competitors. Institutional clients and individual investors alike can receive Forex-trading information and data from Forex dealers and other Forex experts.
A Forex trading platform or hub is used to give Forex dealers signals or Forex indicators. These signals or indicators are specific entry and exit strategies.
Due to the fact that Forex has exploded across the Internet, most Forex dealers get the information delivered straight to their computer or by email.
After they receive that information, it is then that they decide if they want to buy, sell, or hold the currencies until they are provided with more information.
Companies take extreme care and pay specific attention to detail when sending Forex signals to the currency dealers.
Milos Pesic is an expert in the field of Forex Trading and runs a highly popular and comprehensive Forex Trading web site. For more articles and resources on Forex related topics, online forex trading, trading tips, forex software and much more visit his site at:
=>http://forex.need-to-know.net/
Article Source: http://EzineArticles.com/?expert=Milos_Pesic
By Milos Pesic
Forex firms do a tremendous amount of in-depth research and analyses dealing with the currencies their dealers are trading in. Signals are usually sent out and only are active for a short period of time.
The first signal is sent out at 08:30 and remains actual until 12:30. The second signal is sent at 12:30 and is actual until 16:30. Lastly, the third signal is sent at 16:30. These times are all given in GMT, so be sure to adjust for local time changes.
Forex trading and dealing is an extremely competitive business. Investors tend to subscribe to Forex dealers and companies with great references and background.
Their information tends to be more accurate and genuine than their less experienced competitors. Institutional clients and individual investors alike can receive Forex-trading information and data from Forex dealers and other Forex experts.
A Forex trading platform or hub is used to give Forex dealers signals or Forex indicators. These signals or indicators are specific entry and exit strategies.
Due to the fact that Forex has exploded across the Internet, most Forex dealers get the information delivered straight to their computer or by email.
After they receive that information, it is then that they decide if they want to buy, sell, or hold the currencies until they are provided with more information.
Companies take extreme care and pay specific attention to detail when sending Forex signals to the currency dealers.
Milos Pesic is an expert in the field of Forex Trading and runs a highly popular and comprehensive Forex Trading web site. For more articles and resources on Forex related topics, online forex trading, trading tips, forex software and much more visit his site at:
=>http://forex.need-to-know.net/
Article Source: http://EzineArticles.com/?expert=Milos_Pesic
By Milos Pesic
Monday, September 8, 2008
Trading Forex- who makes money trading Forex?
Practically everybody entering trading arena has one objective- to make money. While there are some people who trade for challenge or other purist reasons, they are decisive minority. For almost all traders, pulling money out of the markets is a primary motivation.
We have all seen TV infomercials that make it sound so easy. What you need to do is to attend some seminar, purchase a piece of software with some crossing lines or colorful arrows. Just follow these buy and sell signals and you are on your way to untold reaches.
Can it really be that simple?
Reality is quite different. There are statistics claiming that 90-95% of traders lose money. How accurate this number is, may be debatable, but what is not, is the fact that more people lose money than make it. These kind of statements often stress they apply to small speculators or beginner traders. This could be understandable. Most people get themselves into trading in a haphazard way. They don't commit enough time to education, follow questionable advice, luck discipline, are insufficiently funded. The list can go on.
Than there are professional traders. Money managers, hedge funds, bank traders, CTA's. How well do they do trading Forex? Logic would dictate this group of traders makes a lot of money. After all they employ best talent, have best market access, use sophisticated trading tools, have best trading terms, certainly are not under capitalized. In other words, these market participants are best positioned for consistent profitability. Strangely enough, that doesn't guarantee superior results.
Barclay, well known financial powerhouse, compiles Barclay's Currency Trader Index (CTI). Data for this index comprises of results from 114 managed money programs, both spot Forex and currency futures. Since 2000 there was only one year when this index gained more than 10%- 11.08% in 2003. Index suggests that money managers as a group have been losing money for last few years. In 2005 results were -1.21%, 2006 witnessed a loss of -0.12%. Returns for 2007 to date are not much more impressive, just 0.89% gain through August. The outlook for the rest of the year is no better. Other indexes tracking currency trading funds show similar results- marginal gains at best.
These results maybe shocking to many people. If the best positioned market participants can't achieve meaningful returns, is it possible at all to extract profits from Forex trading? What chance does a small speculator have if large players don't seem to get anywhere?
Well, smaller traders do have some advantages over large institutions. While every trader should create and stick to his trading plan, he/she is not bound by myriad of rules and limitations that institutional trader must adhere to. For one, leverage. Money managers are not allowed to use large leverage. They may be limited to how big percentage of total funds can put in any one market. Individual trader is not. Most importantly, perhaps, money management companies can not just cash out 100% and sit on the sidelines when things don't go right. Individuals have this luxury, which, at times, maybe the smartest thing to do.
With proper market education and solid trading plan, every market participant can be successful. Outside of extremely short term scalping, where institutions have an edge in cost of trading, disciplined and patient individual can be the one who makes money. On regular basis.
Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC., and a creator of highly effective Rainbow trading system. He specializes in mechanical trading systems as explained on www.spectrumforex.com . Spectrum Forex LLC offers numerous services to individual traders. With questions and comments e-mail him at kulej@spectrumforex.com .
Mike Kulej
We have all seen TV infomercials that make it sound so easy. What you need to do is to attend some seminar, purchase a piece of software with some crossing lines or colorful arrows. Just follow these buy and sell signals and you are on your way to untold reaches.
Can it really be that simple?
Reality is quite different. There are statistics claiming that 90-95% of traders lose money. How accurate this number is, may be debatable, but what is not, is the fact that more people lose money than make it. These kind of statements often stress they apply to small speculators or beginner traders. This could be understandable. Most people get themselves into trading in a haphazard way. They don't commit enough time to education, follow questionable advice, luck discipline, are insufficiently funded. The list can go on.
Than there are professional traders. Money managers, hedge funds, bank traders, CTA's. How well do they do trading Forex? Logic would dictate this group of traders makes a lot of money. After all they employ best talent, have best market access, use sophisticated trading tools, have best trading terms, certainly are not under capitalized. In other words, these market participants are best positioned for consistent profitability. Strangely enough, that doesn't guarantee superior results.
Barclay, well known financial powerhouse, compiles Barclay's Currency Trader Index (CTI). Data for this index comprises of results from 114 managed money programs, both spot Forex and currency futures. Since 2000 there was only one year when this index gained more than 10%- 11.08% in 2003. Index suggests that money managers as a group have been losing money for last few years. In 2005 results were -1.21%, 2006 witnessed a loss of -0.12%. Returns for 2007 to date are not much more impressive, just 0.89% gain through August. The outlook for the rest of the year is no better. Other indexes tracking currency trading funds show similar results- marginal gains at best.
These results maybe shocking to many people. If the best positioned market participants can't achieve meaningful returns, is it possible at all to extract profits from Forex trading? What chance does a small speculator have if large players don't seem to get anywhere?
Well, smaller traders do have some advantages over large institutions. While every trader should create and stick to his trading plan, he/she is not bound by myriad of rules and limitations that institutional trader must adhere to. For one, leverage. Money managers are not allowed to use large leverage. They may be limited to how big percentage of total funds can put in any one market. Individual trader is not. Most importantly, perhaps, money management companies can not just cash out 100% and sit on the sidelines when things don't go right. Individuals have this luxury, which, at times, maybe the smartest thing to do.
With proper market education and solid trading plan, every market participant can be successful. Outside of extremely short term scalping, where institutions have an edge in cost of trading, disciplined and patient individual can be the one who makes money. On regular basis.
Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC., and a creator of highly effective Rainbow trading system. He specializes in mechanical trading systems as explained on www.spectrumforex.com . Spectrum Forex LLC offers numerous services to individual traders. With questions and comments e-mail him at kulej@spectrumforex.com .
Mike Kulej
FOREX A to Z: All You Need to Know to Start Trading FOREX
Being new to FOREX trading? Dont worry, getting started in FOREX trading is easy and you can always test your skills first in a demo account before you go live with real money. To get started in FOREX trading, we have to get to know what FOREX is. FOREX trading involves buying and selling the different currencies of the world. Buying one currency and selling another at the same time make a FOREX deal. FOREX market is the largest trading market in the world. It yields an average turnover of $1.9 trillion daily and the figure is nearly 30 times larger than the total volume of equity trades in United States.
Who are the major players in FOREX market?
Although FOREX trading involves such a big volume of trades nowadays, it is not made available for the publics until year 1998. In the past, the FOREX market was not offered to small speculators or individual traders due to the large minimum business sizes and extremely strict financial requirements. At that time, only banks, big multi-national cooperation and major currency dealers were able to take advantage of the currency exchange market's extraordinary liquidity and strong trending nature of world's main currency exchange rates. Only until the late 90s, FOREX brokers are allowed to break huge sized inter-bank units into smaller units and offer these units to individual traders like you and me. As a fact in FOREX trading, FOREX is mainly traded in large international bank. According to Wall Street Journal Europe, 73% of the trade volume is covered by the major ten. Deutsche Bank, topping the table, had covered 17% of the total currency trades followed by UBS in the second and Citi Group in third taking 12.5% and 7.5% of the market. Other large financial cooperation in the list is HSBC, Barclays, Merril Lynch, J. P. Morgan Chase, Coldman Sachs, ABN Amro, and Morgan Stanley.
Starting in FOREX trading
To start trading on FOREX, one must first learn how to read FOREX quotes. Foreign exchange quotes are always listed in pairs (e.g. USD/JPY 109.2): the first listed currency is known as the base currency with a constant value of 1 unit while the currency listed in the second is known as counter. In our given example, USD/JPY 109.2 means a dollar of United States Dollar is equal to 109.2 Japanese Yen. In other words, the quote shows the relative value of one currency compare to the other. It means the value USD had been increased when USD/JPY quote goes up
However, a two-sided quote (e.g. EUR/USD 1.2435/1.2440) consisting of a 'bid' and ask is often seen. The bid price is the price at which you can sell the base currency while the ask price is where you can buy the base currency. The different of bid & ask price is commonly known as spread. In the example of EUR/USD 1.2435/1.2440, this means you can buy 1 Euro Dollar with 1.2440 USD or sell 1 Euro 1.2435. Currency brokers make their profit through these differences of bid & ask price and this is how they manage to provide their services to individual investors without charging them commission fees. If you are new to trading it makes sense to deal in the more popular currencies. There are two main reasons for this. Firstly you do not want to be left with a currency where there is little interest and you may have difficulty selling. Secondly the spread between the bid/ask prices is likely to be narrower, making it easier to make a profit.
Major currency traded in FOREX market
There are seven major currencies, the US dollar (USD), Euro (EUR), Japanese yen (JPY) British pound (GBP), Swiss Franc (CHF) Canadian dollar (CAD) and Australian dollar (AUD). The US dollar is the most traded currency followed by the Euro and the Yen. The Euro is the relatively new currency of the European Union although some member states, including the UK, have not changed their currency. Also, if you live in a country using one of the major currencies, when you first start trading it makes sense to begin with that currency. Not only are you familiar and comfortable with the currency, but you are in a better position to judge its strength. The internet has a wealth of information on the financial climate of a country, but if you live there you have access to all newspaper content, as well being in the unique position of experiencing first hand changes at the consumer level.
Why I should trade FOREX?
Main Question raised in your mind might be: Why should you trade FOREX? There are lots of reasons why you should involve in FOREX trading. FOREX market is truly a global market where it opens 24 hours a day through out the whole week (weekends excluded). With the ease of Internet access, transaction in FOREX can be done in anytime regardless on your location. This gives you the convenience to work on any time, anywhere which in turns gives you the freedom you cannot have in investing other kind of trading.
More over, trading in FOREX gives you an equal prospective in rising and falling market. As trades are always done in pair of currency pairs, FOREX traders can always find chance to make money in anytime, regardless on the fall or rise period of one single country currency. Also, FOREX trading offers incredibly high leverage rates to the traders. By trading currency in margin up to 200 to 1, you can start off your FOREX trade with minimum capital and huge ROI.
Conclusion
Wrapping things up, I hope that the article gives you a better general understanding about FOREX trading. With the flexibility you can get, FOREX trading suits perfectly into most people investment plans. Like with any new form of trading you need to know what you are doing, especially as there is margin involved. If you are new to FOREX, take all the time you need to learn this new trading skill well -- practice everything you learn with a demo account before you consider going 'live' with your own money. Investors should read books, attend seminars, Forex traning course and do paper trade until they are comfortable with there strategy.
Teddy
Who are the major players in FOREX market?
Although FOREX trading involves such a big volume of trades nowadays, it is not made available for the publics until year 1998. In the past, the FOREX market was not offered to small speculators or individual traders due to the large minimum business sizes and extremely strict financial requirements. At that time, only banks, big multi-national cooperation and major currency dealers were able to take advantage of the currency exchange market's extraordinary liquidity and strong trending nature of world's main currency exchange rates. Only until the late 90s, FOREX brokers are allowed to break huge sized inter-bank units into smaller units and offer these units to individual traders like you and me. As a fact in FOREX trading, FOREX is mainly traded in large international bank. According to Wall Street Journal Europe, 73% of the trade volume is covered by the major ten. Deutsche Bank, topping the table, had covered 17% of the total currency trades followed by UBS in the second and Citi Group in third taking 12.5% and 7.5% of the market. Other large financial cooperation in the list is HSBC, Barclays, Merril Lynch, J. P. Morgan Chase, Coldman Sachs, ABN Amro, and Morgan Stanley.
Starting in FOREX trading
To start trading on FOREX, one must first learn how to read FOREX quotes. Foreign exchange quotes are always listed in pairs (e.g. USD/JPY 109.2): the first listed currency is known as the base currency with a constant value of 1 unit while the currency listed in the second is known as counter. In our given example, USD/JPY 109.2 means a dollar of United States Dollar is equal to 109.2 Japanese Yen. In other words, the quote shows the relative value of one currency compare to the other. It means the value USD had been increased when USD/JPY quote goes up
However, a two-sided quote (e.g. EUR/USD 1.2435/1.2440) consisting of a 'bid' and ask is often seen. The bid price is the price at which you can sell the base currency while the ask price is where you can buy the base currency. The different of bid & ask price is commonly known as spread. In the example of EUR/USD 1.2435/1.2440, this means you can buy 1 Euro Dollar with 1.2440 USD or sell 1 Euro 1.2435. Currency brokers make their profit through these differences of bid & ask price and this is how they manage to provide their services to individual investors without charging them commission fees. If you are new to trading it makes sense to deal in the more popular currencies. There are two main reasons for this. Firstly you do not want to be left with a currency where there is little interest and you may have difficulty selling. Secondly the spread between the bid/ask prices is likely to be narrower, making it easier to make a profit.
Major currency traded in FOREX market
There are seven major currencies, the US dollar (USD), Euro (EUR), Japanese yen (JPY) British pound (GBP), Swiss Franc (CHF) Canadian dollar (CAD) and Australian dollar (AUD). The US dollar is the most traded currency followed by the Euro and the Yen. The Euro is the relatively new currency of the European Union although some member states, including the UK, have not changed their currency. Also, if you live in a country using one of the major currencies, when you first start trading it makes sense to begin with that currency. Not only are you familiar and comfortable with the currency, but you are in a better position to judge its strength. The internet has a wealth of information on the financial climate of a country, but if you live there you have access to all newspaper content, as well being in the unique position of experiencing first hand changes at the consumer level.
Why I should trade FOREX?
Main Question raised in your mind might be: Why should you trade FOREX? There are lots of reasons why you should involve in FOREX trading. FOREX market is truly a global market where it opens 24 hours a day through out the whole week (weekends excluded). With the ease of Internet access, transaction in FOREX can be done in anytime regardless on your location. This gives you the convenience to work on any time, anywhere which in turns gives you the freedom you cannot have in investing other kind of trading.
More over, trading in FOREX gives you an equal prospective in rising and falling market. As trades are always done in pair of currency pairs, FOREX traders can always find chance to make money in anytime, regardless on the fall or rise period of one single country currency. Also, FOREX trading offers incredibly high leverage rates to the traders. By trading currency in margin up to 200 to 1, you can start off your FOREX trade with minimum capital and huge ROI.
Conclusion
Wrapping things up, I hope that the article gives you a better general understanding about FOREX trading. With the flexibility you can get, FOREX trading suits perfectly into most people investment plans. Like with any new form of trading you need to know what you are doing, especially as there is margin involved. If you are new to FOREX, take all the time you need to learn this new trading skill well -- practice everything you learn with a demo account before you consider going 'live' with your own money. Investors should read books, attend seminars, Forex traning course and do paper trade until they are comfortable with there strategy.
Teddy
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