A Guide To Forex Trading

Trading money in the global markets can be great way to make more of it, it can also be a lesson in how to lose money quickly.

 More than $1 trillion is traded every day on the foreign currency exchange (Forex), and yet no centralized headquarters or formal regulatory body exists for this form of trade.

 Foreign currency exchange is regulated through a patchwork of international agreements between countries, most of which have some type of regulatory agency that controls what goes on within their respective borders.

 Thus, the foreign currency exchange actually is a worldwide network of traders who are connected by telephone and computer screens.Although more international policing of money trading has occurred in recent years, authorities have had some successes exposing scams and frauds that victimize traders, especially newer ones 

 So if you want to try this wild world of trading, you need to be wary and not depend entirely on experts.

 Sure, experts can help you in explaining the working of foreign exchange markets and how the language of the Forex and its risks are unique, but you need a lot more training before you even consider entering this extremely risky trading arena.If you have ever traveled outside the United States, you have probably traded in a foreign currency. Every time you travel outside your home country, you have to exchange your country's currency for the currency used in the country you are visiting.

 If you are a US citizen shopping in England and you see a sweater that you want for 100 pounds (the pound is the name of the basic unit of currency in Great Britain), you would need to know the exchange rate. And that's the way foreign currency exchange is used by the average shopper, but foreign currency traders trade much larger sums of money thousands of times a day

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7 Reasons To Trade The FOREX Market.

More and more savvy investor and entrepreneurs are shunning traditional financial markets, like stocks, bonds and commodities and building their fortunes in the foreign exchange (forex) marketplace.

The reason why they are turning to the all electronic world of Forex trading is its numerous advantages over any type of investments.
Even if you are an experienced Stocks or Commodities trader you will discover how powerful the Forex is.

You can make $200 to $3000 in less than 30 minutes of work everyday.
Forex Trading is much less risky than trading currencies on the futures market, much more profitable, and a lot easier, than trading stocks.

Why should you trade the forex market?
Here are the reason why...

1) The forex market is open 24 hours, it never sleeps.
You can enter a position, or exit whenever you want, whenever you are six days a week. You do not need to wait for the opening bell like if you was trading stocks. it is excellent for you as you choose the best time for you to trade.

2) The daily trading volume of the Forex is around $1.5 trillion dollars
It is 30 times larger than the combined volume of all U.S. equity markets. This means that 1,498,574 skilled traders could each take 1 million dollars out of the FOREX market every day and the FOREX would still have more money left than the New York Stock would have daily!

3) You profit in both raising market or falling market.
You have equal potential to profit in both a rising or falling market, because it' s up to you to buy a currency, or to sell it, after you determined the market trend tendency.

4) You can trade from anywhere.
If you like to travel, this is a dream business, you just take your lap top with you and that' s it, you can make money from anywhere in the world, all that you need is to be sure that you can access an Internet Connection.

5) The leverage is considerable.

In fact, you don' t need a lot of money to trade forex, it is recommended to start with $2000, but you can start with $300, then if you have a proved strategy, your investment will grow consequently, as you can trade up to 200 times your investment. You can trade 100,000- unit currency lots with as little as 1% margin, or $1,000. there is no comparison with the stock market where you need a big amount of money to start, if you want to see real profits. And beside that, you need to post  50% margin.

6) Price Movements Are Highly Predictable.
Price movement or highly volatile in the forex, however, the foreign currencies market is moving in trends, and you can identify these trends - as they repeat in cycle- with the technical analysis.

7) No commission fees.
Unlike the stock market, brokers don' t take commission on transaction.

To trade forex, you don' t need to have a lot of money to start; you can trade at any time, from anywhere, with a Internet connection, you will not have an order pending because of lack of liquidity, you will not have to work all during the day.

The forex market has many advantages over the other traditional investments, and for sure, it will give you more freedom, and more money.

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How To Make Money Trading Forex, The Trade Process

On the forex market we are trading currencies, exchanging a currency for another. So we buy a currency hoping its value will increase compared to the value of the one we are selling. Yes, we, at the same time, buying a currency and selling another currency. An example may be a little more understandable.

We have dollars and want to buy euros. The pair traded here is EUR/USD, and the exchange rate is 1.25. You can read it like this : 1 euro equals 1.25 dollar. We hope that the euro value will be higher so that later we will buy more dollar. The exchange rate increase to 1.35, in this case we bought 1 euro using 1.25 dollar, and it now equals to 1.35 dollar. So we exchange our 1 euro back into dollars and now have 1.35.

We bought 1 euro for $1.25 and sell it back for $1.35, we made a 10 cents profit. Of course on the forex market you will not buy only one euro, this will be few hundreds or thousands, depending on your budget and the leverage offered by the broker.

Exchange rates are always moving. When I say that you "hope" the value will increase, many factors can be used to predict the rate, based on technical or fundamental analysis. This is not the topic of this article so let's have another example of a selling trade.

We take the same pair (EUR/USD) as above starting with the same exchange rate (1.25). We want to sell euros so we can buy it later at a lower price. Here we hope, or know that the value of the euro will depreciate. We sell one euro for $1.25. The exchange rate drops to 1.15. That means that now we only need 1.15 to buy our euro back. We exchange our dollars back into euros and again, make a 10 cents profit.

When you buy or sell, you always buy or sell the base currecy. The base currency is the first one in the pair. In the pair EUR/USD, the base currency is the euro and the USD is called the quote currency. When you decide to buy, you buy euro and sell dollars. When you decide to sell, you sell euros and buy dollars.

Think that you always need to exchange something two times. If you buy something and want to make a profit from it, you would prefer to sell it at a higher price. And so, if you are selling something that you will need to buy again, you would prefer to have it at a lower price.

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Forex Education: Learning the Basics

Trading currencies can be a great way to make money, unfortunately a lot of people are afraid to try it. The biggest reason that people are afraid of trading forex is that they are confused by how the process works. There is no doubting that if all of your trading experience is in stocks you will find things to be very different. However once you pick up the b...

asics the rest will fall into place pretty quickly.

The area that gives a lot of people the most trouble when they start learning how to trade forex is the terminology that is used. If you come from a background of trading stocks you will notice that it is quite a bit different. Before you even start trading forex the first thing that you are going to have to learn is the terminology. It will take you a little bit of time but once you start working with forex and making some practice trades you will pick it up pretty quickly.

The next thing that you have to make sure that you understand before you can start trading forex is the way that prices are determined. Again this is very different than the way it occurs on the stock market. The big thing here is to realize that the value of one currency is measured against another. That means that when you are trading currencies you are actually trading them in pairs. You really only care about how the currencies move against each other. They may both decline relative to a third currency and it will have no impact on your trade.

One other thing that you are going to have to learn if you are going to trade currencies is how to actually make a trade. This is another of those things that you will find is different than you are used to but once you start doing it you will pick it up pretty quickly. The main reason for the difference is the fact that you do have to trade currencies in pairs, once you get that down the actual trading process will start to make a lot more sense. It is also important to realize that because of the huge amounts of leverage you get when you trade forex that small moves in the price can have a huge impact, this also affects how trades are made. When currencies are traded the moves in price are measured by pips which is just a way of keeping track of price changes that are very small. You will get the hang of it pretty quickly once you start making trades.

It can be a challenge to make the right forex trade. This is why forex education is some important in helping you to make profitable trades profitable trades.

5 Secrets of Successful Forex Traders

Trading Forex is not difficult. But only if you do things the right way!

In fact, if you have been studying Forex for a while you certainly already know what you need to do.

However, the real challenge is not to know what to do but to do it correctly.

Let's look at what pro Forex traders are doing in order to make a very comfortable income trading from home...

1. They don't try to predict the market

Professional Forex traders know they can't predict the market. And, unless you have some kind of psychic power, neither do you.

What successful Forex traders also know is that you don't need to be able to predict the market in order to profit from it.

Forex trading is a probability game. To win it, you need to make sure you have a system in place that allows for bigger wins than losses over the long term. Which brings us to the second point...

2. They have a system in place

Forex traders are not gamblers. They don't enter a trade just because they feel it will go the way they want it to go!

Instead, Forex traders use their experience and data in order to build a precise system allowing them to know when to:

-enter the trade;

-exit the trade;

-take profits.

Note that everything is set up in advance. They already know under which conditions they will exit the trade. Most importantly, they always stick to their rules.

Intelligent traders build very precise and rigid systems, helping them to leave emotions out of the way!

3. They leave emotions out of their trading

You have certainly read about this before. But do you really trade without emotions?

Trading without emotions basically means that you just follow your system, even after a series of losses.

Trading without emotions also means that you are in control at all time and never switch to "gambling" because you "feel" the trade.

Successful traders never rejoice over the winning trade. They rejoice over the cause (the system) of the win!

4. They understand the value of experience

Most wannabe traders are looking for the magic system which will make them rich over night. And if they can't make a profit within their first month of trading, they quit, arguing that Forex trading is just a scam.

However, right now, they are traders making very large amounts of money days in and days out. Why?

Because they learnt from experience. They adapted their trading and progressively managed to make a profit over time.

They understood that losing was part of the game and their experimentations necessary for them to grow into professional traders.

5. They have realistic goals

Linked to the previous point, most traders want to make millions in a few months, starting with $1,000. This is not going to happen.

A successful trader knows what he is capable to make and adapts his goals accordingly.

Of course, month after month, year after year, he increases his goals, as he learns more and improve his system.

In fact, when starting off, the Forex trader should not be worried about the money made but about the return on investment he is capable to make.

It is much better to make $120 with a $1000 investment (12%) than $200 with a $10,000 investment (2%)!