Learn Forex Trading to Expand Opportunities
Capitalize on the opportunity to learn forex trading so you can begin the process of branching your portfolio out of domestic stocks and into the global market. Any financial advisor worth his weight will tell you that it is important to diversify your investment portfolio and this is by far the largest volume market in the world. Daily, it does nearly four times the volume of trading than the New York Stock Exchange does. Anyone who holds a basic understanding of how money is converted and exchange rates work can learn forex trading. The sale or trading of currency is at the heart of what forex is. Using one currency to buy another means that your counterpart is using their currency to buy yours. As exchange rates fluctuate and the economies of nations surge and recede, these investments in cash behave in value very much like a traditional stock. As with any new venture, you will need to master the vocabulary that is an inherent part of forex. When you begin to learn forex trading you will be introduced to terms like pip, spread, cross, base currency and trade currency. Foreign exchange trading does have some unique terminologies. While they may be new to you, you will learn them quickly because they describe certain parts of forex quotes that you will need to understand in order to trade. There are quite a few resources available to those who wish to learn forex trading. The reliability of internet access has opened the door to online forex trading, which means that more investors have the ability to participate in trading activity. Since the foreign exchange trade is considered a spot market, the ready availability of internet access is crucial. Business is done on the "spot," thus the name. You can capitalize on many benefits when you learn forex trading. The availability of a 24-hour a day market is one. Since forex involves the trade of currency at banks across the globe, the market never closes. The market is also remarkably liquid, meaning that you will never have trouble finding trading partners. Since most of your trading partners are banks and the medium is cash, you will never be at a loss for customers. Another benefit is the lack of commissions. Since you make the trades on your own, you don't have to spend part of your profit on brokerage commission fees. Taking the time to learn forex trading opens one more investment door for you. As you continue to realize the importance of diversifying your investment portfolio, it may be a good idea to begin looking at what kinds of opportunities are available to you in foreign exchange trading. You may be surprised to see who else is capitalizing on this market and just how easy it is.
Monday, January 7, 2008
Learn Forex Trading In An Innovative And Easy Way
Learn Forex Trading In An Innovative And Easy Way
Why Learn Forex trading?The forex market is by far the largest market in the world. It is estimated that around $1.5 TRILLION is traded every single day. By far more then all the stock, bond and futures markets of the entire world combined! Forex or currency exchange is the term used to describe the trading of world currencies. A trade occurs when a trader simultaneously buy of one currency and sell of another one. E.g., to buy British pounds with US dollars. The currency combination used in a trade is called a pair.What does a forex trader do? Simple, buy a currency at a low value and sell it at a higher value, and in the process profit from it! For example, buy Great British Pounds with US Dollars, wait for the Pound rate to go up and make money! This can be done several times a day if the forex trader is a day trader or several times a week or month if the trader is a forex swing trader.What are the main benefits of trading in the forex market?Many currency pairs are very volatile. Volatility means that they move a lot during the day, from side to side, allowing traders to capture sometimes 5-6 price swings per day, each one potentially allowing the trader to make impressive profits.5-7 currency pairs to monitor (instead of over 10,000 stocks!), no commission trading, guaranteed fills for stop losses and limit orders, impressive leverage. The forex market is a 24 hour market. Never stops. This means that as a forex trader you can chose exactly when to trade. Some traders have day jobs and do not have the necessary time to trade during the day so they can trade at night. People who make their living as forex traders can chose to trade any time of the day or night. The point being, a 24 hour market allows the trader a lot of flexibility.What are the Exclusive benefits offered by forex trading?An incredible benefit of the forex industry is that today all forex brokers allow traders to open free demo accounts. This demo account has the full capabilities of a "real" account including live market rates, access to real-time market analysis, and the ability to execute trades off streaming prices. This means that the trader can test his or her strategies without risking a single dollar! No other business opportunity allows you to see if it works before you spend money!Making a living as a forex trader allows you to be truly free! No office, no workers, no inventory, no marketing worries, no advertising, no selling. Learning the right forex trading system allows the forex trader to trade by just following simple rules. If A happens and B happens then do C. This is called mechanical trading. It requires absolutely no discretion, interpretation or thinking from the trader.In conclusion, Learning forex trading provides all level of investors with a lot of opportunities that many markets and industries do not provide. The reason many people have not heard of this opportunity until recently is that until not long ago trading currencies was reserved to the big dogs (banks, institutions, companies etc). Today with the help of the internet anyone can take advantage of on-line currency trading that was once reserved to an exclusive group.
Why Learn Forex trading?The forex market is by far the largest market in the world. It is estimated that around $1.5 TRILLION is traded every single day. By far more then all the stock, bond and futures markets of the entire world combined! Forex or currency exchange is the term used to describe the trading of world currencies. A trade occurs when a trader simultaneously buy of one currency and sell of another one. E.g., to buy British pounds with US dollars. The currency combination used in a trade is called a pair.What does a forex trader do? Simple, buy a currency at a low value and sell it at a higher value, and in the process profit from it! For example, buy Great British Pounds with US Dollars, wait for the Pound rate to go up and make money! This can be done several times a day if the forex trader is a day trader or several times a week or month if the trader is a forex swing trader.What are the main benefits of trading in the forex market?Many currency pairs are very volatile. Volatility means that they move a lot during the day, from side to side, allowing traders to capture sometimes 5-6 price swings per day, each one potentially allowing the trader to make impressive profits.5-7 currency pairs to monitor (instead of over 10,000 stocks!), no commission trading, guaranteed fills for stop losses and limit orders, impressive leverage. The forex market is a 24 hour market. Never stops. This means that as a forex trader you can chose exactly when to trade. Some traders have day jobs and do not have the necessary time to trade during the day so they can trade at night. People who make their living as forex traders can chose to trade any time of the day or night. The point being, a 24 hour market allows the trader a lot of flexibility.What are the Exclusive benefits offered by forex trading?An incredible benefit of the forex industry is that today all forex brokers allow traders to open free demo accounts. This demo account has the full capabilities of a "real" account including live market rates, access to real-time market analysis, and the ability to execute trades off streaming prices. This means that the trader can test his or her strategies without risking a single dollar! No other business opportunity allows you to see if it works before you spend money!Making a living as a forex trader allows you to be truly free! No office, no workers, no inventory, no marketing worries, no advertising, no selling. Learning the right forex trading system allows the forex trader to trade by just following simple rules. If A happens and B happens then do C. This is called mechanical trading. It requires absolutely no discretion, interpretation or thinking from the trader.In conclusion, Learning forex trading provides all level of investors with a lot of opportunities that many markets and industries do not provide. The reason many people have not heard of this opportunity until recently is that until not long ago trading currencies was reserved to the big dogs (banks, institutions, companies etc). Today with the help of the internet anyone can take advantage of on-line currency trading that was once reserved to an exclusive group.
Perks of Automated Forex Day Trading
Perks of Automated Forex Day Trading
Are you interested in automated forex day trading? There are many things that you should know about automated forex trading, and this is a great place to learn about it. The idea of automated forex day trading is recently getting more and more popular. Futures exchange was the first to adopt this system and later on, the FX market followed suit and employed automated forex day trading.- EfficiencyThis system is very efficient and successful because of its capability to carry out a deal or a trade - real time. This means that there are no lags and fewer complications when trading and these results to more income generated. Achieving this level of efficiency is very hard to do by manual means especially if the decision to trade or not to trade can only be done in a time window of a few seconds. There are even instances wherein the window of opportunity is just a few milliseconds! There are instances wherein the trader is not in his desk and the opportunity suddenly presents itself, while sometimes a trader will skip deals for a while if he recently came from losing deals. These factors are eliminated by an automated system.- VersatilityAn automated system allows you to trade in diverse fields. It makes it possible for you to trade in varying markets as well as an array of time zones. Many trading models can be used by the trader since the system will be the one managing each trading model. Short term data can be analyzed by the system and this provides you with an advantage since you can use the data analyzed for making decisions based on what is currently happening in the market. Analyzing where the market will go in the next 15 or so minutes is impossible without using an automated forex trading system.- Improved liquidityLiquidity is greatly improved by the use of automated trading systems. This can be deduced by observing the behavior of the futures exchange market after employing an automated forex trading system.- SetbackTraders are foreseeing that a problem may arise when the time comes that all traders will adopt the automated system. The volume of orders may be so great that the existing bandwidth as well as current equipment used may not be able to accommodate this influx of information in real time. Existing systems might be able to carry the load and crash which will result to chaos in the market. As of now, safety controls have been created and set in place to prevent this scenario from happening.- Risk ManagementAnother big issue that concerns forex traders is risk management. Even automated forex trading systems require a risk management tool to ensure that there are no errors while trading. Risk management tools requires that before opening a position, checks should be conducted to ensure that no excessive correlation is present in already existing positions. To be 100% sure that the check is accurate and free of error, the whole system must first be synchronized. But as the technology used in forex trading progresses and evolves, these will no longer be issues to be concerned about.There are even instances wherein the window of opportunity is just a few milliseconds! There are instances wherein the trader is not in his desk and the opportunity suddenly presents itself, while sometimes a trader will skip deals for a while if he recently came from losing deals. These factors are eliminated by an automated system.These are some of the things that you should know about automated forex day trading. The information provided here will give you a better grasp and knowledge about this topic. Hopefully this will be helpful when you are deciding to try this kind of business.
Are you interested in automated forex day trading? There are many things that you should know about automated forex trading, and this is a great place to learn about it. The idea of automated forex day trading is recently getting more and more popular. Futures exchange was the first to adopt this system and later on, the FX market followed suit and employed automated forex day trading.- EfficiencyThis system is very efficient and successful because of its capability to carry out a deal or a trade - real time. This means that there are no lags and fewer complications when trading and these results to more income generated. Achieving this level of efficiency is very hard to do by manual means especially if the decision to trade or not to trade can only be done in a time window of a few seconds. There are even instances wherein the window of opportunity is just a few milliseconds! There are instances wherein the trader is not in his desk and the opportunity suddenly presents itself, while sometimes a trader will skip deals for a while if he recently came from losing deals. These factors are eliminated by an automated system.- VersatilityAn automated system allows you to trade in diverse fields. It makes it possible for you to trade in varying markets as well as an array of time zones. Many trading models can be used by the trader since the system will be the one managing each trading model. Short term data can be analyzed by the system and this provides you with an advantage since you can use the data analyzed for making decisions based on what is currently happening in the market. Analyzing where the market will go in the next 15 or so minutes is impossible without using an automated forex trading system.- Improved liquidityLiquidity is greatly improved by the use of automated trading systems. This can be deduced by observing the behavior of the futures exchange market after employing an automated forex trading system.- SetbackTraders are foreseeing that a problem may arise when the time comes that all traders will adopt the automated system. The volume of orders may be so great that the existing bandwidth as well as current equipment used may not be able to accommodate this influx of information in real time. Existing systems might be able to carry the load and crash which will result to chaos in the market. As of now, safety controls have been created and set in place to prevent this scenario from happening.- Risk ManagementAnother big issue that concerns forex traders is risk management. Even automated forex trading systems require a risk management tool to ensure that there are no errors while trading. Risk management tools requires that before opening a position, checks should be conducted to ensure that no excessive correlation is present in already existing positions. To be 100% sure that the check is accurate and free of error, the whole system must first be synchronized. But as the technology used in forex trading progresses and evolves, these will no longer be issues to be concerned about.There are even instances wherein the window of opportunity is just a few milliseconds! There are instances wherein the trader is not in his desk and the opportunity suddenly presents itself, while sometimes a trader will skip deals for a while if he recently came from losing deals. These factors are eliminated by an automated system.These are some of the things that you should know about automated forex day trading. The information provided here will give you a better grasp and knowledge about this topic. Hopefully this will be helpful when you are deciding to try this kind of business.
Why Trade the Forex Market
Why Trade the Forex Market
Trading the Forex market has become very popular in the last years. Technology advances like the internet have spawned this new trading craze, where anyone with a secure internet connection prepared to undertake a small amount of training can engage in trading foreign exchange on the forex market. Before the Internet, only corporations and wealthy individuals could trade currencies in the Forex market through the use of proprietary trading systems of banks, often through private banking. The foreign exchange market is one of the largest in the world if not the largest. It is more than 3 times larger than the stock/equities market and more than 5 times bigger than futures, give Forex traders nearly unlimited liquidity and flexibility. It has been estimated that approximately $2 trillion USD of currency exchanges hands each and every day. The foreign currency markets are very liquid because worldwide, the most powerful international banks provide a market around the clock. The Global foreign exchange market daily averages of the Bank for International Settlements in 1998 were $660 billion and now have increased to $2.3 trillion (2006). There is really no insider information in the forex markets. Since exchange rates are calculated by actual money flow as well as by the outlook of financial flowage, which takes into consideration such things as inflation, GDP changes, trade and budget deficits and surpluses, as well as interest rates, it would be difficult to come across so-called 'insider information'. All of these factors are self-evident, though different projected outlooks may prove more accurate than others. There is less room for market manipulation is there may be for thinly traded stocks. A equally important property of forex market is the fact that trends in forex market last longer and are more clearly defined than in any other trading instrument. Analysis of forex market charts also often displays identifiable chart patterns of price movement and once a pattern is established, the trend or pattern becomes the most probable course of future price action until the market changes. Because the FOREX market is so huge, there is no possibility of someone controlling the market price for a long time. When there are a lot of buyers and a lot of sellers, you can expect to buy or sell at a price that is very close to the last market price. The market maker in the forex market is usually a bank or brokerage company that provides during the trading day a bid and ask price. Example of forex market makers include CMS Forex, GFS, Forex, Forex Capital Markets (FXCM), and Global Forex Trading, all of which are regulated by the Commodity Futures Trading Commission (CFTC) of the USA. Brokers offer clients access to online FX trading system, platform or software that can make it easy and fun to trade the market and usually there are usually no commission charges. With these trading systems and platforms you can trade the forex markets for free using the same state-of-the-art software packages that professional Forex traders use to help them make real-time, live currency trades. So individuals with a few hundreds of their own currency hope to buy and sell something for a smiling profit. Speculators trade to make a profit by purchasing one currency and simultaneously selling another. In conclusion I think the FOREX market is one of the best investment opportunities around today. There are great opportunities in the FOREX market because of the constant movements of the exchange rates. There is no surprise that more and more traders are turning to the foreign currency market to take advantage of the fluctuation in exchange currency rates as a way to speculate and trade to increase their capital and wealth
Trading the Forex market has become very popular in the last years. Technology advances like the internet have spawned this new trading craze, where anyone with a secure internet connection prepared to undertake a small amount of training can engage in trading foreign exchange on the forex market. Before the Internet, only corporations and wealthy individuals could trade currencies in the Forex market through the use of proprietary trading systems of banks, often through private banking. The foreign exchange market is one of the largest in the world if not the largest. It is more than 3 times larger than the stock/equities market and more than 5 times bigger than futures, give Forex traders nearly unlimited liquidity and flexibility. It has been estimated that approximately $2 trillion USD of currency exchanges hands each and every day. The foreign currency markets are very liquid because worldwide, the most powerful international banks provide a market around the clock. The Global foreign exchange market daily averages of the Bank for International Settlements in 1998 were $660 billion and now have increased to $2.3 trillion (2006). There is really no insider information in the forex markets. Since exchange rates are calculated by actual money flow as well as by the outlook of financial flowage, which takes into consideration such things as inflation, GDP changes, trade and budget deficits and surpluses, as well as interest rates, it would be difficult to come across so-called 'insider information'. All of these factors are self-evident, though different projected outlooks may prove more accurate than others. There is less room for market manipulation is there may be for thinly traded stocks. A equally important property of forex market is the fact that trends in forex market last longer and are more clearly defined than in any other trading instrument. Analysis of forex market charts also often displays identifiable chart patterns of price movement and once a pattern is established, the trend or pattern becomes the most probable course of future price action until the market changes. Because the FOREX market is so huge, there is no possibility of someone controlling the market price for a long time. When there are a lot of buyers and a lot of sellers, you can expect to buy or sell at a price that is very close to the last market price. The market maker in the forex market is usually a bank or brokerage company that provides during the trading day a bid and ask price. Example of forex market makers include CMS Forex, GFS, Forex, Forex Capital Markets (FXCM), and Global Forex Trading, all of which are regulated by the Commodity Futures Trading Commission (CFTC) of the USA. Brokers offer clients access to online FX trading system, platform or software that can make it easy and fun to trade the market and usually there are usually no commission charges. With these trading systems and platforms you can trade the forex markets for free using the same state-of-the-art software packages that professional Forex traders use to help them make real-time, live currency trades. So individuals with a few hundreds of their own currency hope to buy and sell something for a smiling profit. Speculators trade to make a profit by purchasing one currency and simultaneously selling another. In conclusion I think the FOREX market is one of the best investment opportunities around today. There are great opportunities in the FOREX market because of the constant movements of the exchange rates. There is no surprise that more and more traders are turning to the foreign currency market to take advantage of the fluctuation in exchange currency rates as a way to speculate and trade to increase their capital and wealth
Swing Trading For Profit a Live Example
Swing Trading For Profit a Live Example
Swing trading is one of the best ways to make money in forex trading, it's also a lot easier psychologically than trend following.It's therefore a great way to trade for novice traders. Over the last few weeks we have looked at some live examples:Banked 4 profits, scratched one trade at break even and have one open. Let's look at it and another potential opportunity.First why is swing trading an easy way to trade?When we say is easy, we mean psychologically.You get in quick with low pre defined risk and you're normally out in 2 - 5 days with a good profit.This is much easier than long term trend following, in that you do not have to wait for months and see dips eat into your open profit.Long term trend following is highly profitable but requires a lot more discipline.We personally mix the two ways of trading to gain some diversification of style and smooth the equity curve.Swing trading basicsWe normally look for important chart support and resistance and trade contrary to it.We wait for prices to test these areas and watch for stochastic momentum to fall against resistance or rise against support.Then we know the level has held and trade off it.We also use RSI and Bollinger bands to define targets and that's it.Nice ands simple, but can be very profitable you can read more about this method in our other articles.British PoundWe are short at recent nearby highs and would look for a pop to the downside to Fridays low or near the middle of the Bollinger band.Stochastic is weak at present and odds favor a bit more to the downside.With swing trading you don't want to hang around to long, get out on specific target and that's very close now.Another opportunityLets look at another potential opportunity that's could be shaping up. The euro is trading near its highs and the spike high on the chart is resistance. Stochastic momentum is waning and a cross
Swing trading is one of the best ways to make money in forex trading, it's also a lot easier psychologically than trend following.It's therefore a great way to trade for novice traders. Over the last few weeks we have looked at some live examples:Banked 4 profits, scratched one trade at break even and have one open. Let's look at it and another potential opportunity.First why is swing trading an easy way to trade?When we say is easy, we mean psychologically.You get in quick with low pre defined risk and you're normally out in 2 - 5 days with a good profit.This is much easier than long term trend following, in that you do not have to wait for months and see dips eat into your open profit.Long term trend following is highly profitable but requires a lot more discipline.We personally mix the two ways of trading to gain some diversification of style and smooth the equity curve.Swing trading basicsWe normally look for important chart support and resistance and trade contrary to it.We wait for prices to test these areas and watch for stochastic momentum to fall against resistance or rise against support.Then we know the level has held and trade off it.We also use RSI and Bollinger bands to define targets and that's it.Nice ands simple, but can be very profitable you can read more about this method in our other articles.British PoundWe are short at recent nearby highs and would look for a pop to the downside to Fridays low or near the middle of the Bollinger band.Stochastic is weak at present and odds favor a bit more to the downside.With swing trading you don't want to hang around to long, get out on specific target and that's very close now.Another opportunityLets look at another potential opportunity that's could be shaping up. The euro is trading near its highs and the spike high on the chart is resistance. Stochastic momentum is waning and a cross
How to Find a Broker for the FOREX Trading Market
How to Find a Broker for the FOREX Trading Market
It's not always easy to know what to look for in a broker in any market, much less a market as complex as the FOREX. But, if you want to trade in FOREX you need a broker. While it might be tempting to simply ask the brokers what they can do for you, you can't always depend on them to give you a straight answer. Here are a few things to consider when choosing your broker. You will want a broker that has low spreads. Since FOREX brokers don't charge a commission, this difference is how they make money. Low spreads will save you money. Along with this, you should be looking for a broker attached to a reputable institution. Unlike equity brokers, FOREX brokers are usually attached to large banks or lending institutions. The broker should also be registered with the Futures Commission Merchant (FCM) as well as regulated by the Commodity Futures Trading Commission (CFTC). Once you've narrowed your choices down to brokers that won't cost you too much, and that are reputable, consider the trading tools that they are offering you. FOREX brokers have many different trading platforms for their clients, just like brokers in other markets. These often show real-time charts, technical analysis tools, real-time news and data, and may even offer support for the various trading systems. Before you commit to any one broker, request free trials of their tools. Brokers generally provide technical as well as fundamental commentaries, economic calendars, and other research to help you make good trades. Shop around until you find a broker who will give you what you need to succeed. The next item that you will need to evaluate carefully is the number of leverage options your potential broker has. Leverage is a necessity in FOREX trading because the price deviations in the currencies are set at fractions of a cent. Leverage is expressed as a ratio between the total capital that is available to be traded and your actual capital. For example, when you have a ratio of 100:1, your broker will lend you $100 for every $1 of actual capital you have. Many brokerage firms will offer you as much as 250:1. If you have low levels of capital you will need a brokerage with high levels of leverage to make reasonable profits. If capital is not a problem, any broker that has a wide variety of leverage options would be a good choice for you. A variety of options will let you vary the amount of risk you choose to take. For example, less leverage (and therefore less risk) may be preferable if you are dealing with highly volatile (exotic) currency pairs. Along with different levels of leverage, look for brokers that offer different types of accounts. Many brokers will offer you two or more types. The smallest account is known as a mini account and it requires you to trade with a minimum of around $300. The mini account also generally offers a high amount of leverage. The standard account allows you to trade at a variety of different leverages, but it requires minimum initial capital of $2,000. And finally, there are premium accounts, which often require significant amounts of capital. They also generally have different levels of leverage available to the traders who use them, and often offer additional tools and services. You will need to make sure that the broker you choose has the right leverage, tools, and services for the amount of capital that you are able to work with
It's not always easy to know what to look for in a broker in any market, much less a market as complex as the FOREX. But, if you want to trade in FOREX you need a broker. While it might be tempting to simply ask the brokers what they can do for you, you can't always depend on them to give you a straight answer. Here are a few things to consider when choosing your broker. You will want a broker that has low spreads. Since FOREX brokers don't charge a commission, this difference is how they make money. Low spreads will save you money. Along with this, you should be looking for a broker attached to a reputable institution. Unlike equity brokers, FOREX brokers are usually attached to large banks or lending institutions. The broker should also be registered with the Futures Commission Merchant (FCM) as well as regulated by the Commodity Futures Trading Commission (CFTC). Once you've narrowed your choices down to brokers that won't cost you too much, and that are reputable, consider the trading tools that they are offering you. FOREX brokers have many different trading platforms for their clients, just like brokers in other markets. These often show real-time charts, technical analysis tools, real-time news and data, and may even offer support for the various trading systems. Before you commit to any one broker, request free trials of their tools. Brokers generally provide technical as well as fundamental commentaries, economic calendars, and other research to help you make good trades. Shop around until you find a broker who will give you what you need to succeed. The next item that you will need to evaluate carefully is the number of leverage options your potential broker has. Leverage is a necessity in FOREX trading because the price deviations in the currencies are set at fractions of a cent. Leverage is expressed as a ratio between the total capital that is available to be traded and your actual capital. For example, when you have a ratio of 100:1, your broker will lend you $100 for every $1 of actual capital you have. Many brokerage firms will offer you as much as 250:1. If you have low levels of capital you will need a brokerage with high levels of leverage to make reasonable profits. If capital is not a problem, any broker that has a wide variety of leverage options would be a good choice for you. A variety of options will let you vary the amount of risk you choose to take. For example, less leverage (and therefore less risk) may be preferable if you are dealing with highly volatile (exotic) currency pairs. Along with different levels of leverage, look for brokers that offer different types of accounts. Many brokers will offer you two or more types. The smallest account is known as a mini account and it requires you to trade with a minimum of around $300. The mini account also generally offers a high amount of leverage. The standard account allows you to trade at a variety of different leverages, but it requires minimum initial capital of $2,000. And finally, there are premium accounts, which often require significant amounts of capital. They also generally have different levels of leverage available to the traders who use them, and often offer additional tools and services. You will need to make sure that the broker you choose has the right leverage, tools, and services for the amount of capital that you are able to work with
Utilizing Stop Loss Order
Utilizing Stop Loss Order
A stop-loss is an order linked to a specific position for the purpose of closing that position and preventing the position from accruing additional losses. A stop-loss order placed on a Buy (or Long) position is a stop-loss order to Sell and close that position. A stop-loss order placed on a Sell (or Short) position is a stop-loss order to Buy and close that position. A stop-loss order remains in effect until the position is liquidated or the client cancels the stop-loss order. As an example, if an investor is Long (Buy) USD at 120.27, they might wish to put in a stop-loss order to Sell at 119.49, which would limit the loss on the position to the difference between the two rates (120.27-119.49) should the dollar depreciate below 119.49. A stop-loss would not be executed and the position would remain open until the market trades at the stop-loss level. Stop-loss orders are an essential tool for controlling your risk in currency trading.
A stop-loss is an order linked to a specific position for the purpose of closing that position and preventing the position from accruing additional losses. A stop-loss order placed on a Buy (or Long) position is a stop-loss order to Sell and close that position. A stop-loss order placed on a Sell (or Short) position is a stop-loss order to Buy and close that position. A stop-loss order remains in effect until the position is liquidated or the client cancels the stop-loss order. As an example, if an investor is Long (Buy) USD at 120.27, they might wish to put in a stop-loss order to Sell at 119.49, which would limit the loss on the position to the difference between the two rates (120.27-119.49) should the dollar depreciate below 119.49. A stop-loss would not be executed and the position would remain open until the market trades at the stop-loss level. Stop-loss orders are an essential tool for controlling your risk in currency trading.
Risk Management
Risk Management
The Forex Market is the largest and most liquid financial market in the world. Since macroeconomic forces are one of the main drivers of the value of currencies in the global economy, currencies tend to have the most identifiable trend patterns. Therefore, the Forex market is a very attractive market for active traders, and presumably where they should be the most successful. However, success has been limited mainly for the following reasons:
Many traders come with false expectations of the profit potential, and lack the discipline required for trading. Short term trading is not an amateur's game and is not the way most people will achieve quick riches. Simply because Forex trading may seem exotic or less familiar then traditional markets (i.e. equities, futures, etc.), it does not mean that the rules of finance and simple logic are suspended. One cannot hope to make extraordinary gains without taking extraordinary risks, and that means suffering inconsistent trading performance that often leads to large losses. Trading currencies is not easy, and many traders with years of experience still incur periodic losses. One must realize that trading takes time to master and there are absolutely no short cuts to this process.
The most enticing aspect of trading Forex is the high degree of leverage used. Leverage seems very attractive to those who are expecting to turn small amounts of money into large amounts in a short period of time. However, leverage is a double-edged sword. Just because one lot ($10,000) of currency only requires $100 as a minimum margin deposit, it does not mean that a trader with $1,000 in his account should be easily able to trade 10 lots. One lot is $10,000 and should be treated as a $100,000 investment and not the $1000 put up as margin. Most traders analyze the charts correctly and place sensible trades, yet they tend to over leverage themselves (get in with a position that is too big for their portfolio), and as a consequence, often end up forced to exit a position at the wrong time.
For example, if your account value is $10,000 and you place a trade for 1 lot, you are in effect, leveraging yourself 10 to 1, which is a very significant level of leverage. Most professional money managers will leverage no more then 3 or 4 times. Trading in small increments with protective stops on your positions will allow one the opportunity to be successful in Forex trading.
The Forex Market is the largest and most liquid financial market in the world. Since macroeconomic forces are one of the main drivers of the value of currencies in the global economy, currencies tend to have the most identifiable trend patterns. Therefore, the Forex market is a very attractive market for active traders, and presumably where they should be the most successful. However, success has been limited mainly for the following reasons:
Many traders come with false expectations of the profit potential, and lack the discipline required for trading. Short term trading is not an amateur's game and is not the way most people will achieve quick riches. Simply because Forex trading may seem exotic or less familiar then traditional markets (i.e. equities, futures, etc.), it does not mean that the rules of finance and simple logic are suspended. One cannot hope to make extraordinary gains without taking extraordinary risks, and that means suffering inconsistent trading performance that often leads to large losses. Trading currencies is not easy, and many traders with years of experience still incur periodic losses. One must realize that trading takes time to master and there are absolutely no short cuts to this process.
The most enticing aspect of trading Forex is the high degree of leverage used. Leverage seems very attractive to those who are expecting to turn small amounts of money into large amounts in a short period of time. However, leverage is a double-edged sword. Just because one lot ($10,000) of currency only requires $100 as a minimum margin deposit, it does not mean that a trader with $1,000 in his account should be easily able to trade 10 lots. One lot is $10,000 and should be treated as a $100,000 investment and not the $1000 put up as margin. Most traders analyze the charts correctly and place sensible trades, yet they tend to over leverage themselves (get in with a position that is too big for their portfolio), and as a consequence, often end up forced to exit a position at the wrong time.
For example, if your account value is $10,000 and you place a trade for 1 lot, you are in effect, leveraging yourself 10 to 1, which is a very significant level of leverage. Most professional money managers will leverage no more then 3 or 4 times. Trading in small increments with protective stops on your positions will allow one the opportunity to be successful in Forex trading.
Risk Management
Risk Management
Trading foreign currencies is a challenging and potentially profitable opportunity for educated and experienced investors. However, before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose.
Trading foreign currencies is a challenging and potentially profitable opportunity for educated and experienced investors. However, before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose.
Foreign Exchange Trades
Foreign Exchange Trades
If the Euro/USD is trading at 1.2400/03 and you buy Euro at 1.2403, you are “long” Euro and “short” the US Dollar. In another trade, you decide to sell Japanese Yen, if the USD/JPY is trading at 107.20/23 and you buy at 107.23 you would be long the US Dollar and short Japanese Yen. Let’s assume that the Euro goes higher to 1.2537 but the US Dollar falls to 106.76. How did you do on these two trades?
Your profit and loss for the two transactions would be as follows: On the Euro trade you bought Euro 100,000 at 1.2403 and sold Euro at 1.2537 your profit is .0134 or $1,340 (.0134 x Euro100,000 = $1,340). On the USD/JPY trade you bought $100,000 at 107.23 and sold it at 106.76 your loss on this trade is .47 or $440.24 ($100,000 x 0.47 = JPY47,000 / 106.76 = $440.24). Your net gains on the two transactions is a profit of $899.76 ($1340 - $440.24 = $899.76).
If the Euro/USD is trading at 1.2400/03 and you buy Euro at 1.2403, you are “long” Euro and “short” the US Dollar. In another trade, you decide to sell Japanese Yen, if the USD/JPY is trading at 107.20/23 and you buy at 107.23 you would be long the US Dollar and short Japanese Yen. Let’s assume that the Euro goes higher to 1.2537 but the US Dollar falls to 106.76. How did you do on these two trades?
Your profit and loss for the two transactions would be as follows: On the Euro trade you bought Euro 100,000 at 1.2403 and sold Euro at 1.2537 your profit is .0134 or $1,340 (.0134 x Euro100,000 = $1,340). On the USD/JPY trade you bought $100,000 at 107.23 and sold it at 106.76 your loss on this trade is .47 or $440.24 ($100,000 x 0.47 = JPY47,000 / 106.76 = $440.24). Your net gains on the two transactions is a profit of $899.76 ($1340 - $440.24 = $899.76).
FX Solutions' Advantages
FX Solutions' Advantages
Commission Free Trading*
Tight Spreads: 3-4 pips in the Major Currencies
Advanced Trading Platform - » Register now for the free $10,000 Practice Account
Charts with Pattern Recognition: Helps Traders Better Recognize Potential Trading Opportunities
FLEXI Contract: Choose a Contract Size that Suits Your Trading Style
FLEXI Leverage: Select Your Leverage: 50:1, 100:1, 200:1, 250:1, 300:1, 400:1
Ability to Establish Multiple Stops and Limits on a Trade
Advanced Hedging Capability
Alerts
Free Daily Forex Commentary
Free Real Time News - Provided by Market News International
24 Hour Customer Support (Trading Hours are Sunday 16:00 to Friday 16:30 Eastern Standard Time) * FX Solutions is compensated through a portion of the bid/ask spread.
FX Solutions also provides a Free Practice Account. The trial account simulates live currency trading and enables traders to become familiar with FX Solutions dealing platform, view our dealing rates, charts, news and to test your trading strategies.
Commission Free Trading*
Tight Spreads: 3-4 pips in the Major Currencies
Advanced Trading Platform - » Register now for the free $10,000 Practice Account
Charts with Pattern Recognition: Helps Traders Better Recognize Potential Trading Opportunities
FLEXI Contract: Choose a Contract Size that Suits Your Trading Style
FLEXI Leverage: Select Your Leverage: 50:1, 100:1, 200:1, 250:1, 300:1, 400:1
Ability to Establish Multiple Stops and Limits on a Trade
Advanced Hedging Capability
Alerts
Free Daily Forex Commentary
Free Real Time News - Provided by Market News International
24 Hour Customer Support (Trading Hours are Sunday 16:00 to Friday 16:30 Eastern Standard Time) * FX Solutions is compensated through a portion of the bid/ask spread.
FX Solutions also provides a Free Practice Account. The trial account simulates live currency trading and enables traders to become familiar with FX Solutions dealing platform, view our dealing rates, charts, news and to test your trading strategies.
Advantages of Forex Trading
Advantages of Forex Trading
Typical Leverage is 50:1 to 400:1** - Much Higher Leverage Allowed than Equities and Futures Trading
24 Hour Market (Trading Hours are Sunday 16:00 to Friday 16:30 Eastern Standard Time)
Superior Liquidity - Enter or Exit the Market with Minimal Execution Risk
Low Transaction Costs* - No Commissions on Trades, Lower Spreads than Equities and Futures
Always a Trading Opportunity - Profit Potential in Rising and Falling FX Markets * FX Solutions is compensated through a portion of the bid/ask spread.** FX Solutions asks that you consider the risks associated with increasing your leverage. A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit, this may work against you as well as for you. You may sustain a total loss of initial margin and you may be required to deposit additional funds to cover a short margin position. FLEXI Leverage is available for self-traded accounts only (does not apply to managed accounts).
Typical Leverage is 50:1 to 400:1** - Much Higher Leverage Allowed than Equities and Futures Trading
24 Hour Market (Trading Hours are Sunday 16:00 to Friday 16:30 Eastern Standard Time)
Superior Liquidity - Enter or Exit the Market with Minimal Execution Risk
Low Transaction Costs* - No Commissions on Trades, Lower Spreads than Equities and Futures
Always a Trading Opportunity - Profit Potential in Rising and Falling FX Markets * FX Solutions is compensated through a portion of the bid/ask spread.** FX Solutions asks that you consider the risks associated with increasing your leverage. A relatively small market movement will have a proportionately larger impact on the funds you have deposited or will have to deposit, this may work against you as well as for you. You may sustain a total loss of initial margin and you may be required to deposit additional funds to cover a short margin position. FLEXI Leverage is available for self-traded accounts only (does not apply to managed accounts).
Analysis of Foreign Exchange Markets
Analysis of Foreign Exchange Markets
Foreign exchange traders generally fall into two groups and base their decisions on either technical analysis and fundamental analysis. Technical traders use charts, trend lines, support and resistance levels, mathematical models and other means to identify opportunities and drive trading decisions. Fundamental traders identify trading opportunities by analyzing economic information, such as interest rates, money supply and political/economical macroeconomic factors. Additionally, some traders take short-term positions and trade frequently while others are long-term, buy and hold traders.
Foreign exchange traders generally fall into two groups and base their decisions on either technical analysis and fundamental analysis. Technical traders use charts, trend lines, support and resistance levels, mathematical models and other means to identify opportunities and drive trading decisions. Fundamental traders identify trading opportunities by analyzing economic information, such as interest rates, money supply and political/economical macroeconomic factors. Additionally, some traders take short-term positions and trade frequently while others are long-term, buy and hold traders.
Foreign Exchange Prices
Foreign Exchange Prices
Foreign exchange markets and prices are mainly influenced by international trade flows and investment flows. The FX markets are also influenced, but to a lesser extent, by the same factors that influence the equity and bond markets: economic and political conditions especially interest rates, inflation, and political instability. Those factors usually have only a short-term impact, which makes Forex attractive as it offers some of the diversification necessary to protect against adverse movements in the equity and bond markets.
Foreign Exchange prices, or quotes, include a "Bid" and "Ask" similar to other financial products:Bid: Price at which Dealer is willing to Buy and Traders can Sell CurrencyAsk: Price at which Dealer will Sell and Traders can Buy Currency
The difference between the Bid and Ask is called the "Spread", which is the Trader's cost of the transaction. For more information on the Spreads offered by FX Solutions click here.
Currencies are usually quoted to four decimal places, such as the Euro/US Dollar trading at 1.2400/1.2403, with the last decimal place referred to as a point or "pip". A pip for most currencies is 0.0001 of an exchange rate; the one exception is the USD/JPY quote in which each pip is equal to 0.01.
Foreign exchange markets and prices are mainly influenced by international trade flows and investment flows. The FX markets are also influenced, but to a lesser extent, by the same factors that influence the equity and bond markets: economic and political conditions especially interest rates, inflation, and political instability. Those factors usually have only a short-term impact, which makes Forex attractive as it offers some of the diversification necessary to protect against adverse movements in the equity and bond markets.
Foreign Exchange prices, or quotes, include a "Bid" and "Ask" similar to other financial products:Bid: Price at which Dealer is willing to Buy and Traders can Sell CurrencyAsk: Price at which Dealer will Sell and Traders can Buy Currency
The difference between the Bid and Ask is called the "Spread", which is the Trader's cost of the transaction. For more information on the Spreads offered by FX Solutions click here.
Currencies are usually quoted to four decimal places, such as the Euro/US Dollar trading at 1.2400/1.2403, with the last decimal place referred to as a point or "pip". A pip for most currencies is 0.0001 of an exchange rate; the one exception is the USD/JPY quote in which each pip is equal to 0.01.
Foreign Exchange
Foreign Exchange
Foreign exchange trading is the simultaneous buying of one currency and selling of another. The foreign exchange market (Forex or FX) is the largest financial market in the world with a daily turnover of over $2.6 trillion. Examples of currency trading pairs are Euro/US Dollar (EUR/USD) and US Dollar/Japanese Yen (USD/JPY). Most currency transactions involve the "Majors" - US Dollar, Euro, Japanese Yen, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar.
Unlike most financial markets, the foreign exchange market has no physical location and no central exchange. The Forex market operates 24 hours a day through an electronic network of banks, corporations and individual traders. Forex trading begins every day in Sydney, then moves to Tokyo, followed by London and then New York. The major market makers, or dealers, consist of the commercial and investment banks, the exchange traded futures, and registered futures commission merchants (FCMs) such as FX Solutions. FX Solutions' dealing desk is open 24-hours a day from Sunday 16:00 to Friday 16:30 Eastern Time.
Foreign exchange trading is the simultaneous buying of one currency and selling of another. The foreign exchange market (Forex or FX) is the largest financial market in the world with a daily turnover of over $2.6 trillion. Examples of currency trading pairs are Euro/US Dollar (EUR/USD) and US Dollar/Japanese Yen (USD/JPY). Most currency transactions involve the "Majors" - US Dollar, Euro, Japanese Yen, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar.
Unlike most financial markets, the foreign exchange market has no physical location and no central exchange. The Forex market operates 24 hours a day through an electronic network of banks, corporations and individual traders. Forex trading begins every day in Sydney, then moves to Tokyo, followed by London and then New York. The major market makers, or dealers, consist of the commercial and investment banks, the exchange traded futures, and registered futures commission merchants (FCMs) such as FX Solutions. FX Solutions' dealing desk is open 24-hours a day from Sunday 16:00 to Friday 16:30 Eastern Time.
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