16 Nov 2011

Getting Down the Forex Basics

Just as no person in their right mind would jump into a deep swimming pool with first learning how to swim, it is a bad idea to begin trading Forex without first learning the Forex basics. Now the question is, how do we define Forex basics?

There is no one right answer to that, but the vast amount of material out there about the Forex market should give you an indication of how much time you should spend learning Forex before trading.

There is no way you are going to be able to learn it all and the truth is, some things are actually better learned from experience. Having said that, before trading real money on the Forex market, it is absolutely crucial that you spend some serious time learning Forex basics from different online and offline sources.

So to drill down a little into the meaning of the term Forex basics, the first thing to learn is the terminology. What is MT4? Are you fami, fliar with the terms Stop Loss, Take Profit, Forex leverage, pips, spreads, and pairs? If these words are not completely clear to you, you better make sure they are before risking money.

Once you have the Forex basic terminology under control, it is time to learn a little bit about the actual market. How much money is traded daily? Where and when can you trade on the market? How do you trade? What do you trade? These are all part of the general term Forex basics. If you cannot answer any of the above questions, you need to keep reading.

Moving along, there is no avoiding the topic of market analysis. Are you familiar with the different Forex charts? Are you comfortable with technical indicators such as Fibonacci and others? If not, you better get comfortable on the couch and get crackin.

Do you know how to differentiate between the different Forex trading platforms because that is one of the most important aspects of choosing a Forex broker. Can you name the major currencies and the trading hours of the different countries?

Seems to be a lot of information I know, but all the above information still falls under the category of Forex basics. Even after you can answer the majority of those questions, you still have a lot more learning to do.

Forex is a serious business and without complete control of the Forex basics, you will drown in no time. So now that you know you need to know the basics, go and spend the next week, 2 weeks, or even few months reading the best material the Web has to offer. Then and only then should you even consider risking your hard earned money on the Forex market.

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16 Nov 2011

Learn Forex Trading

Almost all internet marketers have heard of forex trading or online currency trading as it is sometimes referred to and many are curious about how the forex trading system works and where they can go to learn forex trading.

In order to become a successful forex trader you need to know what forex trading is and how to successfully trade forex. In order to achieve sufficient knowledge it is vital to learn forex trading from experts. This can be done in the form of a forex tutorial and there are literally hundreds of forex companies offering online tutorials and guides.

An online forex tutorial will explain how the foreign exchange market works and will also explain the types of forex orders that are available to you as a forex trader. A forex tutorial will also explain about technical indicators and what they mean, the economic indicators you will need to be aware of and the various options and strategies that are available to you as a forex trader.

If you are new to forex trading then it is essential that you learn forex trading before parting with any of your hard earned cash. Many online forex companies offer free training and demonstrations that resemble that of real time forex trading. There are also forex trading courses available and these are also a valuable way to learn forex trading as you can refer to these course time and time again.

The most important aspect when it comes to forex trading is to learn forex trading so that you understand how to trade and how to trade successfully. The more you learn forex trading the more understanding you will have and the more success. Finding a forex tutorial or forex trading course is simple. All you need to do is a brief internet search and you will have a great deal of tutorials and courses to choose from. If you are serious about succeeding as a forex trader, then it’s down to you, learn forex trading now and learn to succeed.

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16 Nov 2011

Forex News Signal Trading: How to Make Use of Forex Signals to Produce Profitable Trading Endeavors

Whatever the case, staying up to date with current events and being able to interpret them as it relates to the currency market is an important skill that every trader has to develop in order to make sound trading decisions. Because news has such a huge impact to the currency market, sometimes causing pairs to move 60-100 pips in matters of 30 minutes-an hour. Subscribing to a Forex news signal provider can greatly enhance your ability to catch the BIG pips during these massive buy/sell rallies.

Forex News Signal Trading: Where to find them?

If you go to major Forex news services or large popular Forex brokerage, you can usually find a place to subscribe for a Forex news signal trading services for a monthly fee of anywhere $50 and upward. This is beneficial for you as a trader because this allows you to trade along side with a panel of expert analyst as they themselves trade the same recommendation as you and they are working for their company.

How to Trade News Anywhere in the World!

To trade the news, you should go to sites such as Forex factory or any other site that shows the daily, weekly, and monthly economic calender.

The first things you should note for is configuring the time zone to match the time zone you are living in to make sure you are not a few hours behind or few hours ahead when the news get release.

Second thing you should do is pay close attention to the particular countries you are trading your currencies with. In most cases, anything related to America is important because most of the major currencies are pegged to the American dollar as they are the world’s reserve currency therefore whatever the Americans do will have an effect on most currencies on the board.

In recent times, the Chinese economy, now the second largest in the world, surpassing Japan is also becoming very influential in the currency market particularly to commodity resource-based pair such as the Australian dollar or the New Zealand dollar (traders like to call it the kiwi!) Why? because the Chinese are busy buying up the entire world’s resource/commodity in order to fuel their ever growing economy.

When to Trade the News?

There are two key times that trader should be on their screen when an economic news is release. The first is a few hours usually 3-4 hours before the news. Rumour abounds during these times and trader will begin to take sides on a particular currency driving up the prices and creating massive build-up right to the very hour when the news release. After the news get release, two things usually happen.

1) If the news is not what trader has expected, there will be massive sell-off and reversal pattern which completely counters the previous 3-4 hours build up of that trend. These reversal pattern usually last an hour and the currency is back to where it had left off in the previous 3-4 hours before the news started.

2) If the “actual” forecast is in according to the “predicted” forecast, you will usually not see much action as before but rather you will see a consolidation or leveling of the trend on the chart. Sometimes you have to be extremely careful because there is what’s call a”fake sell off.” Basically what happen is the big banks and hedge funds will try to trick theindividual traders by producing a fake reversal pattern only to see a sudden rebound minutes later as the actual trade direction reveals itself.

Yes, welcome to the real world. It’s a dark world out there and this is why the big shark will always swallow up the small fishes.

How you can protect yourself against the big sharks?

By subscribing to a reliable Forex news signal providers, you can follow exactly how professional traders trade the Forex as they are already very familiar with the little tricks that the big sharks try to pull and you will be following the tails of the big sharks instead of going directly into the big sharks’ mouth!!

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16 Nov 2011

Forex: Benefits of Trading the Forex Market

Trading the Forex market has become very popular in the last years. Why is it that traders around the world see the Forex market as an investment opportunity? We will try to answer this question in this article. Also we will discuss come differences between the Forex market, the stocks market and the futures market.

Some of the benefits of trading the Forex market are:

Superior liquidity.

Liquidity is what really makes the Forex market different from other markets. The Forex market is by far the most liquid financial market in the world with nearly 2 trillion dollars traded everyday. This ensures price stability and better trade execution. Allowing traders to open and close transactions with ease. Also such a tremendous volume makes it hard to manipulate the market in an extended manner.

24hr Market.

This one is also one of the greatest advantages of trading Forex. It is an around the click market, the market opens on Sunday at 3:00 pm EST when New Zealand begins operations, and closes on Friday at 5:00 pm EST when San Francisco terminates operations. There are transactions in practically every time zone, allowing active traders to choose at what time to trade.

Leverage trading.

Trading the Forex Market offers a greater buying power than many other markets. Some Forex brokers offer leverage up to 400:1, allowing traders to have only 0.25% in margin of the total investment. For instance, a trader using 100:1 means that to have a US$100,000 position, only US$1,000 are needed on margin to be able to open that position.

Low Transaction costs.

Almost all brokers offer commission free trading. The only cost traders incur in any transaction is the spread (difference between the buy and sell price of each currency pair). This spread could be as low as 1 pip (the minimum increment in any currency pair) in some pairs.

Low minimum investment.

The Forex market requires less capital to start trading than any other markets. The initial investment could go as low as $300 USD, depending on leverage offered by the broker. This is a great advantage since Forex traders are able to keep their risk investment to the lowest level.

Specialized trading.

The liquidity of the market allows us to focus on just a few instruments (or currency pairs) as our main investments (85% of all trading transactions are made on the seven major currencies). Allowing us to monitor, and at the end get to know each instrument better.
Trading from anywhere.

If you do a lot of traveling, you can trade from anywhere in the world just having an internet connection.

Some of the most important differences between the Forex market and other markets are explained below.

Forex market vs. Equity markets

Liquidity

FX market: Near two trillion dollars of daily volume.
Equity market: Around 200 billion on a daily basis.

Trading hours

FX market: 24hr market, 5.5 days a week.
Equity market: Monday through Friday from 8:30 EST to 5:00 EST.

Profit potential

FX market: In both, rising and falling markets.
Equity market: Most traders/investor profit only from rising markets.

Transaction costs

FX market: Commission free and tight spreads.
Equity market: High Commissions and transaction fees.

Buying power

FX market: Leverage up to 400:1.
Equity market: Leverage from 2:1 to 4:1.

Specialization

FX market: most volume (85%) is made on major currencies (USD, EUR, JPY, GBP, CHF, CAD and AUD.)
Equity market: More than 40,000 stocks to choose from.

Forex market vs. Futures market

Liquidity

FX Market: Near two trillion dollars of daily volume.
Futures market: Around 400 billion dollars on a daily basis.

Transaction costs

FX market: Commission free and tight spreads.
Futures market: High commissions fees.

Margin

FX market: Fixed rate of margin on every position.
Futures market: Different levels of margin on overnight positions than day time positions.

Trade execution

FX market: Instantaneous execution.
Futures market: Inconsistent execution.

All this makes the Forex market very attractive to investors and traders. But I need to make something clear, although the benefits of trading the Forex market are notorious; it is still difficult to make a successful career trading the Forex market. It requires a lot of education, discipline, commitment and patience, as any other market.

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16 Nov 2011

Automatic Forex Trading Systems – The 3 Deadly Forex Mistakes That Will Destroy Your Trading Account

There are 3 deadly Forex mistakes that can prevent the successful operation Forex automatic trading and Forex robot traders, and by the end of this article you will be able to identify these deadly mistakes and eliminate them from your Forex automatic trading.

So where do most automatic Forex trading systems fail? Believe it or not, most Forex robot traders actually lose money because of the person running the Forex robot trader, and not the person who developed it. This failure stems from mistakes made by the operator of the automatic Forex trading system while affected by the following psychological factors:

Deadly Mistake #1: Greed

The first deadly mistake that prevents most Forex system traders from realizing the full potential of their automatic Forex trading system is greed. Many Forex robot traders allow the trader to adjust the money management rules of the system in relation to the account balance and the level of leverage available.

Greed causes many traders to make the mistake of trading lot sizes that are too big for their level of leverage, which often results in a rapid wipe out of the trading account. When determining trading lot sizes for your Forex robot trader, be sure to err on the side of safety so as not to fall into this trap of greed.

Deadly Mistake #2: Impatience

The second deadly mistake that prevents most Forex system traders from realizing the full potential of Forex automatic trading is impatience. Once they have bought their Forex robot trader, they just can’t wait to load it up with real funds and begin their Forex automatic trading right away.

This goes against the cardinal trading rule of always prioritizing capital protection. Every automatic Forex trading system must be tested on a demo account first to verify the results advertised by the developer, as well as to familiarize the user with the correct application of the Forex robot trader.

Deadly mistake #3: Fear

The third deadly mistake that prevents most Forex system traders from realizing the full potential of their automatic Forex trading system is fear. This is closely tied with mistake #2 and the lack of live demo testing before commencing Forex automatic trading. Without the experience of trading the Forex robot trader on the demo account, the trader will not know what to expect from Forex automatic trading and will be prone to prematurely shutting down the Forex robot trader and returning it for a refund.

To avoid lost profits on a perfectly functional Forex robot trader, every trader must trade it on a demo account for at least 30 days to determine the basic parameters of the system (e.g. average profit/loss, standard deviation & upper/lower range limits).

Are you making any one of the 3 deadly mistakes: greed, impatience and fear? If you are, stop trading immediately and take the necessary steps to correct these mistakes before you go any further. Otherwise, you are putting your trading account balance in grave danger of a blow out.

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