Forex Trading

Foreign exchange trading is possibly one of the most active occupations of today, so that is why anyone who wants to go into this line of business must be as lively and as driven as possible.

This is because the spirit of the business is continually vigorous. For example, if Tokyo is having their sleep time, New York is on its normal demanding day.

Forex trading is not just about making proceeds as most young entrepreneurs would deem. It may not be that easy if you don’t understand the total picture. You may be exceedingly good in math but not in financial vocabulary. You may well be a very good hotel manager but you lack the expertise in worldwide economics. Initially, one may not be as rapid as the ones who are already into the industry, but when you have learned the ins and goings of it, you may find yourself enjoying it and profit much from it. Or, profit first and then benefit from the rest.

Due to the strain of this work, forex training has become all the more critical. Being a thriving trader in forex,means you have to to put some investment into training and development so as to understand the business, improving yourself with it and creating fresh strategies. As with any other business, forex trading requires investment and training and should at all times be on your priority list. Some folks may have entered into the business but failed it big in the end. Why? It is for a lot of reasons but statistically, it is mostly because of lack of knowledge.

One has to be constantly updated by indicators that have an effect on this trade industry. Factors that shape forex market would include social, political and economic situations and policies of a country. This should be tackled all through forex trainings to be able to understand certain behaviours. It does look difficult but that is what forex is all about. This is also the main reason why it is perilous to depend on inside information like trading stocks.

A number of businessmen judge themselves already superior and may even act repulsive and prideful about going into trainings. But the reality is everybody learns something different each day. With this ever-changing planet it is no longer prudent to stick to only one idea alone. For example, in opening new markets, one should understand the cultures and whatever existing systems the group has. This comprehension should be integrated into the working plan.

World trends like globalization is varying the normal ways of businesses. over are the days of finishing trouble-free objective deals because any person can write his or her own rules nowadays. Like power, this liberty should be used sensibly. Though the business may seem like a survival of the fittest, it is really impossible to last exclusive of somebodys assistance. While it is crucial to be aggressive, it takes continual practice to perfect tactfulness on this character.

Training is not only about learning financial jargon and technical terms but it also teaches how to grow to be a agile and quick to recover businessman in these modern times. The Foreign Exchange Market known as FOREX Market or Currency Exchange Market is the largest market in the world in terms of finances and trades.

It is where world banks, financial institutions and governments post trades for foreign currencies. The currency exchange is open twenty four hours a day, 7 days each week, unlike in the Stock Exchange Market. Before, only great banks and financial institutions had entrance to the Forex Market but thanks to the development of the Internet, all day traders now have a door to the foreign exchange market.

The earnings one can accumulate in trading currencies can interest lots of people but investing in the Foreign Exchange market can be risky since it is the most volatile market out there. To ensure you invest your funds properly and safely to the Foreign Exchange Market, there are a number of things you will need to take into account:

KNOWLEDGE IS POWER: Learn the common terms that are used in FOREX trading like pip, margin, leverage etc. You can learn this by seeking out and consulting a dependable broker. Do some extensive research before turning over your assets to any person, even if it is your broker. Search for a broker who does not battle against his clients and who offers a flexible margin and is always on hand anytime of the day.

One more way is to read Forex Books or Forex eBooks. You can seek these in bookstores or you could download an eBook from the internet. Read one book at a time so that you could take in more information compared to reading a lot of books all at the same time.

Lastly, go to trading seminars or Forex Trading courses. This is usually offered by some brokers who had been successful in their trades. Just remember not to over spend paying for such courses. Choose the appropriate one that you think will profit you the most.

FOREX PLATFORM: Download a trading platform which is programming used to calculate current market trends employing tools and charts. It will assist you to get information like the current exchange rate of currency pairs. You will find Forex trading platforms on the internet but keep in mind to download those platforms made by highly esteemed brokers in particular if there is a fee for downloading.

FOREX MINI ACCOUNT: Open a Forex mini account to get you going in trading online in the Forex Market. This is an account for beginning traders to the Forex market that do not have the cash to begin a standard account. A Forex mini account can be open with a tiny amount of money.

STAY UPDATED: Remain updated on current affairs. Read broadsheets and business magazines. Watch the cable news channels for business news. Factors that can shape the changes in the currency market are the rise and fall of interest rates of banks, importing/exporting of a country and political/economic factors.

BE FLEXIBLE: Adjust your sleeping patterns seeing as the currency market is open 24/7. You have to be up to date and on hand to trade at any time since you do not know what may happen to your investment since the Forex market can change at anytime.

Forex Trading Philosophy

Keen on starting Forex trading? Why would you not be: Many beginning Forex traders are captivated by the allure of easy money. Forex websites offer 'risk-free' trading, 'high returns' and 'low investment' — these claims have a grain of truth in them, but the reality of Forex is a bit more complex. As with anything in life, what you put in will determine what you get out.

There are two common mistakes that many beginner traders make — trading without a strategy and letting emotions rule their decisions. After opening a Forex account it may be tempting to dive right in and start trading. Watching the movements of EUR/USD for example, you may feel that you are letting an opportunity pass you by if you don't enter the market immediately. You buy and watch the market move against you. You panic and sell, only to see the market recover.

This kind of undisciplined approach to Forex is guaranteed to lose you money, and have you waste your time. Forex traders need to have a rational trading strategy and not allow emotions to rule their trading decisions.

The two emotions prevalent in the above example is greed (entering the market immediately) and fear (selling when the market temporarily moves against you). Investing and these two emotions do not gel at all. Keep them out of your trading and you will see results.

To make rational trading decisions the Forex trader must be well-educated in market movements. He must be able to apply technical studies to charts and plot out entry and exit points. He must take advantage of the various types of orders to minimize his risk and maximize his profit.

The first step in becoming a successful Forex trader is to understand the market and the forces behind it. Who trades Forex and why? Who is successful and why are they successful? This knowledge will allow you to identify successful trading strategies and use them as models for your own.

There are 5 major groups of investors who participate in Forex — Governments, Banks, Corporations, Investment Funds, and traders. Each group has varying objectives, but the one thing that all the groups (except traders) have in common is external control. Every organization has rules and guidelines for trading currencies and can be held accountable for their trading decisions. Individual traders, on the other hand, are accountable only to themselves.

If you do not keep yourself in check, nobody else will. Why should they worry if you aimlessly waste your money?

This means that the trader who lacks rules and guidelines is playing a losing game. Large organizations and educated traders approach the Forex with strategies, and if you hope to succeed as a Forex trader you must play by the same rules. That is studying these strategies and rules before starting to trade is so important.

Forex Trading Philosophy — Money Management

Money management is part and parcel of any trading strategy. Besides knowing which currencies to trade and recognizing entry and exit signals, the successful trader has to manage his resources and integrate money management into his trading plan. Position size, margin, recent profits and losses, and contingency plans all need to be considered before entering the market.

This may sound like Greek now! If it does, you have more reason to get to know these terms. Knowledge will empower you on any investment market, including Forex.

There are various strategies for approaching money management. Many of them rely on the calculation of core equity. Core equity is your starting balance minus the money used in open positions. If the starting balance is $10,000 and you have $1000 in open positions your core equity is $9000.

When entering a position try to limit risk to 1% to 3% of each trade. This means that if you are trading a standard Forex lot of $100,000 you should limit your risk to $1000 to $3000 — preferably $1000. You do this by placing a stop loss order 100 pips (when 1 pip = $10) above or below your entry position.

As your core equity rises or falls you can adjust the dollar amount of your risk. With a starting balance of $10,000 and one open position your core equity is $9000. If you wish to add a second open position, your core equity would fall to $8000 and you should limit your risk to $900. Risk in a third position should be limited to $800.

By the same principal you can also raise your risk level as your core equity rises. If you have been trading successfully and made a $5000 profit, your core equity is now $15,000. You could raise your risk to $1500 per transaction. Alternatively, you could risk more from the profit than from the original starting balance. Some traders may risk up to 5% against their realized profits ($5,000 on a $100,000 lot) for greater profit potential.

How to Take Control in Forex Trading

Forex Trading is not that easy, all FX traders before they enter this business, they think that they will be rich very quickly and make $20 000 in one or two weeks, but when they begin trading currencies they discover it is not true, it is not easy to make money especially when we work with money. Very tricky business, many of us think that there is a conspiracy planned by "THE BIG GUYS", they know what we think what we plan to do and they do the opposite to steel our money, many times we think to make the opposite of our decision (if I see the market is going up then I will sell). And we begin searching for someone to help us making at least 200 or 300 pips a month, probably many of us work with signals advisors who simply took our money and probably do not help us making decent profit. Many of us thought stop trading many of us quit FX trading but I think most of us will not quit easily because we see in it a golden opportunity to have our own business and make our fortune!

Foreign exchange is an opportunity to make a fortune and in same time it is an opportunity to loose our money, we can make a fortune if we knew how to handle Forex, if we don't know how to control Forex it will destroy us, so we must be stronger than it, and if we don't know how to control it with our own hands it will destroy us too. So how I can be stronger than this ferocious beast? It is simply by learning, observing, and practicing. The FX market will not go anywhere it will be trending and ranging for ever, so learn from experienced traders how they became that good, observe charts and look for common points look for the reason why the price change direction, and when you discover the reason which influence a currency you will have in your hand the first tool that gives you control. And each new thing you discover, try it on a demo account, see if it is valid and develop it. In this Forex article I am helping you to find your way, this Forex article does not give you the fish but it teaches you fishing. There is no conspiracy theory in this business, no big or small guys, we loose because we don't know, and the first thing we must do to become good traders is to admit that we don't know and we must always learn.

In this Forex Article I will give some clues and I will leave you learn, observe and practice.

First of all you must know that you must use fundamental and technical analysis in conjunction, both complete each others, so don't rely on one and leave the other. Fundamental is one of the reasons which influence the market, so if you are in a long trade and suddenly the trading currency went down so go and see if a report was released and see what its forecast and what was the released data and compare this data to your chart and you will have your first tool to control your business.

Second, in my opinion all the technical indicators didn't help me at all, I tried all the combinations nothing work, and indicators describe the status of the market but don't give you information about the next direction. I read a Forex article about a guy who describes his Forex Trading strategy in a Forex article, I was completely lost, he uses a combination of 12 indicators EMA340, SEMA890, EMA2900 etc: and he inserted FIBONACCI in it. I was totally lost. Even if his strategy worth 95% success I will not use it because I can control the market by using simpler techniques. So we don't need to seek indicators, only one indicator I use the Bollinger Bands which is the perfect weapon in my battle against Forex trading. So I want you to look at the Bollinger Bands and see how it affects a currency, focus on it and read well this Forex article and you will discover a lot of things, and you will have your second tool.

Third, suppose you are in a long trade and suddenly for no reason the Forex Trading price went down, there are no released reports it just turned down, this is weird. But weird things are those we don't understand, but if you observe your chart and go back several hours or days and drop a break line from higher swing points you will see that the price turns down because it reached that break line, you see there is no mystery. So this break line will be your Resistance and if price breaks it, it will continue going up, but going where and till when? Observe very carefully and you will learn as I did. And no need for midnight or afternoon candles, be simple as you can, that beast is not as ferocious as you think. So breakout is your third tool.

Fourth, what timeframe to use, it is up to you to choose the suitable timeframe, H1, H4, D1: I don't know, compare the charts and you will see the suitable timeframe. Timeframe is important and when you find it you will have your Fourth tool.

And that's it, I repeat observe your charts and focus and think in these clues in this Forex article and the more you think the more you discover, read Forex article, learn strategies and get foreign exchange books.

I do good profit from my Forex trading strategy because I program it, I gave my system the data and leave it do his job. This eliminates the fear factor and gave me more time to go out and have fun.

I hope this Forex Article gave some tips and techniques which help traders in their Foreign Exchange trades.

Money Management in Forex: the Real Deal in Trading

In comparison to the amount of time, money and energy spent by some traders on Forex robots, error-proof technical strategies, and quasi-magical foreign exchange trading courses where we are promised to be made super-traders, it is a pity that money management receives insufficient attention. Although almost every trader worthy of the title is aware that success in Forex is largely dependent on careful management of losses, as well as profits, this aspect of trading is somewhat neglected in preference to indicators, statistics, analysis and strategy. Yet the first issue faced by a beginning trader is losing money while trading, and strategy or analysis doesn't say much about how to cope with it. As such, careful study and practice of money management methods must be paramount in the mind of the trader who is committed to achieving success in trading Forex.

What is analysis? It is the identification of high probability scenarios for profits. Probability does not involve any certainty, and by definition, any analytical scenario, however solid it may be, will lead to losses sooner or later. In the case of the beginner, whose skills are underdeveloped in best cases, and undeveloped in the worst, losses will come a lot sooner than profits. It is clear, then, that any trader's education must begin with a good understanding of the importance and necessity of money management skills.

Money management teaches us how to manage losses, and how to maximize profits. It all commands us to cultivate a responsible and disciplined attitude to trading by acquiring consistency in our habits. We are taught not to be erratic in trade sizes, to be consistent about the entry of stop loss or take profit orders, and above all, to regard loss as a natural, and indeed, inseparable part of a trading career. There are many ways of managing loss, but there is no way of avoiding it altogether in a trading career. Even George Soros has had a number of serious, sometimes massive blunders in his long career, but he is still regarded as a master trader by many. Warren Buffet bought the shares of an oil company at the peak of the oil bubble in 2008, and he made wrong choices with Salomon Brothers in the 90's as well. But all these traders were quick to recognize errors, and mange losses instead of denying them and letting them fester and achieve huge proportions. What happens to those who refuse to accept losses, and choose to add to them with the hope of eventual gains is obvious in the case of Nick Leeson and Jerome Kerviel, one of who bankrupted a U.K. bank, and the other lost $7 billion. Both went to jail eventually.

So money management is the heart and soul of trading, the safety valve against errors, and the shield against fear and irrationality. Forex trading brokers may give you the tools of technical analysis and tens of indicators, but money management skills can only be acquired by diligent and patient practice, and a total commitment to success in trading. On the other hand, a master of money management is a master trader, and it is but a matter of time before he perfects his skills in analysis and strategy and acquires the great riches which he deserves.

Authorized Forex Dealer

Authorized Forex Dealer

Any type of financial institution that has received authorization from a relevant regulatory body to act as a dealer involved with the trading of foreign currencies. Dealing with authorized forex dealers ensure that your transactions are being executed in a legal and just way.

Forex Spot Rate

The current exchange rate at which a currency pair can be bought or sold. The spot forex rate differs from the forward rate in that it prices the value of currencies compared to foreign currencies today, rather than at some time in the future. The spot rate in forex currency trading, is the rate that most traders use when trading with an online retail forex broker.
Although the forex spot rate calls for delivery within two days, this rarely occurs. Traders that hold a position for longer than two days will have their trades "reset" by the broker, i.e. closed and reopened at the same price, just prior to the two-day deadline

Business Advantages of Online Forex Trading

Forex is a potential platform for earning substantial profit. And, why not? It is the largest trading market of the world having an average daily trade of US$ 2 trillion and above. The market is known for its high scale trading volume and extreme liquidity. Add to this, forex trading can be done from anywhere of the world. This has been further backed up by World Wide Web through which a trader can trade in the forex market at the comfort of your own home. A few advantages of online forex trading are mentioned below: The greatest advantage tagged with online forex trading or online currency trading is of course its real time accessibility. Today just with a single click, a trader of forex market can access online forex firms and brokers. They offer real time forex quotes, charts and transaction details after meticulous observation and analysis. With such a help, a trader can easily remain aware about every latest occurring of the forex market.Online currency trading or online forex trading is again beneficial for its ease of use and accessibility. What you need to have is a computer with access to internet. Without getting out of your doors, you can analyze the market and decide every trading agreement. However before trading, you need to have a clear concept about the market, its basics and trading secrets. To get the basics of forex trading, online method is again the best option available for you. Innumerable tutorial programs regarding online currency trading are available online which are generally run by online forex firms. With access to such programs, you can remain up to date about the market as well as understand the basics and secrets of the forex market. Several forex firms specializing in online currency trading provide live forex help. These programs are run by expert forex traders and teachers. Thus, getting help for your question regarding forex market is never a tedious task as long as online forex trading classes and tutorial programs are available at your disposal. Online forex trading is again beneficial for it helps you to perform complex analysis without mistakes. With access to your computer; you can solve complex charting, sort out details of each trading agreement minutely. Add to this, you have several forex trading tools available online. These tools offer quick assistance for trading in volumes. This is indeed a blessing for newcomer, who often finds it tedious to track down the facts and figures of forex market and trading agreement. Thus, online forex trading or online currency trading is marked with several advantages. Here, you can obtain every latest happening of the forex market, get free tutorials from masters, access tools and techniques for a winning forex trading; all these at the comfort of your own home. The advent of World Wide Web has fine-tuned the whole process of forex trading.

The Basics of Online Forex Trading

Forex trading has become extremely popular the world over and has people from all different countries and backgrounds trading like only the professional traders could do just a short time ago. Until recently Forex trading was performed mostly by major banks and large institutional traders. The technological advancements that have occurred of late have transformed Forex into the playground of average traders like you and me.
It-s easy to find an online FX trading system, platform or software that can make it easy and fun to trade the market. Simply browse the web and you will be inundated with many exciting offers and promotions. There are many firms that sell or even give away free training software, charts or other useful tools for your future in Forex trading.
Foreign currency trading is done in pairs or combinations. For example, trading the Dollar versus Yen, the Euro vs. the Dollar or the British Pound against the dollar. The most popular currencies that are used for trading and investment purposes are the United States Dollar (USD), Japanese Yen, British Pound, Euro and Swiss Franc. The make up the major portion of all currency trading.
When you come across these currencies in the market you will see them written as a pair: USD/JPY (U S Dollar and Japanese Yen), EUR/USD (Euro and U S Dollar), USD/CHF (U S Dollar and Swiss Franc) and GBP/USD (British Pound and U S Dollar).
The vast majority of all day trades of foreign currency involve these five major currencies. Your goal as a trader is to pick out which currency will appreciate against another. If you can find or develop a system that will allow you to choose the correct direction a currency will be taking it is possible to make good profits in the FX market.
Most trades on the FX market are done by Forex brokers and dealers at major banking institutions across the globe. And since it is a world wide market that makes it a 24 hour a day market. The brokers or dealers work in different shifts so that major institutional traders can perform their trades 24 hours a day around the clock.
However, don-t be alarmed. You do not have to be awake all day and all night to trade the market. It is a simple matter of placing stop orders with brokers to buy or sell at pre-determined price levels even while you are sleeping. If your pre-specified price points are met the order will go through as planned. If your price points are not met the orders will not be placed or carried out. This is the key to stopping potentially big losses. You-d hate to be asleep when the market turned against you without a way to get out. Having specified price levels can save you a lot of stress in the market place. With stop orders you don-t have to constantly follow your currencies every second of the day. You can place your orders and then go about your normal daily routine.
The FX is unlike stock exchanges in that stock exchanges can be very volatile. The FX market is ordinarily a great deal smoother and doesn-t gyrate up and down as quickly or rapidly. The market is actually very easy to trade and is very liquid, meaning you can get your money in or out at any time. Placing an order can be done in a matter of seconds. If you have the temperament for this type of activity it can be a very worthwhile endeavor.

Forex Trading Techniques

What are forex trading techniques? To begin with, such strategies are special and are schematic processes or styles of trading that are designed and implemented with the principal aim of generating higher revenue or income. Just like in any other form of trading, there is also a need to know and implement proper and working techniques to make your money grow through currency trading. Thus, it would be helpful if you would be familiar with several simple, yet proven effective forex trading techniques.

Position Trading is trading based on your overall exposure to a currency pair. Your position is your average price for a currency pair. For Example, you might make a short trade on EUR/USD at 1.40. If the pair is ultimately trending lower, but happens to retrace up, and you take another short at say 1.42, your average position would be 1.41. Once the EUR/USD drops back below 1.41, you will be back in overall profit.

Scalping is making a very short term trade for a few pips usually using high leverage. Scalping typically is best done in conjunction with a news release and supportive technical conditions. The trade can last anywhere from a few seconds to a few hours. Many beginning forex traders start with scalping, but it doesn’t take long to figure out how much you can lose if you don’t have any idea what you are doing. In general, scalping is a risky strategy that does not pay well in comparison it's risk. If you are going to make scalping trades, it is best to do them in conjunction with your overall trading position, not as a primary method of trading.
Advanced forex trading is about seeing all your options when you make a trade. Aside from using masterful risk management and extreme caution, advanced trading can be an alternate way to make profits and control losses. Advanced trading techniques are just about using the markets behavior to your advantage. Learning to use advanced techniques properly is what will give you the edge that will make you stand apart from the average trader.

Requirements by Stock Exchange

Companies have to meet the requirements of the exchange in order to have their stocks and shares listed and traded there, but requirements vary by stock exchange:
Bombay Stock Exchange: Bombay Stock Exchange (BSE) has requirements for a minimum market capitalization of Rs.250 Million and minimum public float equivalent to Rs.100 Million.London Stock Exchange: The main market of the London Stock Exchange has requirements for a minimum market capitalization (£700,000), three years of audited financial statements, minimum public float (25 per cent) and sufficient working capital for at least 12 months from the date of listing.
NASDAQ Stock Exchange: To be listed on the NASDAQ a company must have issued at least 1.25 million shares of stock worth at least $70 million and must have earned more than $11 million over the last three years.
New York Stock Exchange: To be listed on the New York Stock Exchange (NYSE) a company must have issued at least a million shares of stock worth $100 million and must have earned more than $10 million over the last three years.

Brokers of Forex

MetaTrader 4 Forex Brokers — a list of Forex brokerage firms that support MetaTrader 4 Forex trading software as their trading platform.
PayPal Forex Brokers — a list of Forex brokers accepting PayPal on-line payment system as a way to deposit/withdraw money to/from customers' accounts.
WebMoney Forex Brokers — a list of Forex brokers that accept WebMoney e-currency system as the fast deposit/witdhrawal method, offering high security combined with the fast transfers.
Oil Trading Forex Brokers — those Forex brokers that allow trading commodities, and more specifically, oil, are listed in this category.
Gold Trading Forex Brokers — if you wish to find a Forex broker that offers precious metals trading then this list will help you.
Muslim Friendly Forex Brokers — a list of Forex brokers that try to be friendly to Muslim Forex traders offering "no-interest" margin accounts.
Forex Brokers with Web Based Platform — a list of Forex brokers that fully support Forex trading without installing any trading software.
Moneybookers Forex Brokers — a list of Forex brokers that accept Moneybookers electronic payment system as for trading funds transfers.
Forex Brokers with CFD Trading — a list of Forex broker companies that allow their traders to trade not only Forex, but also CFDs (Contracts for Difference).
Forex Brokers with Advanced Trading Platform — a list of Forex brokers with unique and powerful Forex trading software.
Institutional Forex Brokers — a list of on-line Forex brokers that are backed by strong and respected off-line financial companies.
ECN Forex Brokers — a list of on-line Forex brokers that act as ECNs (Electronic Communication Network) offering Forex traders highly competitive spreads.
Liberty Reserve Forex Brokers — a list of Forex brokers that accept Liberty Reserve payment system as the method of depositing/withdrawing funds to/from the trading accounts.

FUNDAMENTALS OF FOREX

If you've already read the "What is Forex?" section then you should know what Forex market is and what it is all about. If not, please, do it. There are five essential aspects of foreign currency market a beginner trader (and an old one as well) should be aware of:
Forex Fundamental Analysis
Forex Technical Analysis
Money Management
Forex Trading Psychology
Forex Brokerage
Understanding and mastering these sides of trading are crucial to organize your Forex trading experience.
Forex Fundamental Analysis
Fundamental analysis is the process of market analysis which is done regarding only "real" events and macroeconomic data which is related to the traded currencies. Fundamental analysis is used not only in Forex but can be a part of any financial planning or forecasting. Concepts that are part of Forex fundamental analysis: overnight interest rates, central banks meetings and decisions, any macroeconomic news, global industrial, economical, political and weather news. Fundamental analysis is the most natural way of making Forex market forecasts. In theory, it alone should work perfectly, but in practice it is often used in pair with technical analysis. Recommended e-books on Forex fundamental analysis:
Reminiscences of a Stock Operator
What Moves the Currency Market?
Forex Technical Analysis
Technical analysis is the process of market analysis that relies only on market data numbers - quotes, charts, simple and complex indicators, volume of supply and demand, past market data, etc. The main idea behind Forex technical analysis is the postulate of functional dependence of the future market technical data on the past market technical data. As well as with fundamental analysis, technical analysis is believed to be self-sufficient and you can use only it to successfully trade Forex. In practice, both analysis methods are used. Recommended e-books on Forex fundamental analysis are:
The Law Of Charts
Candlesticks For Support And Resistance
Trend Determination
Money Management in Forex
Even if you master every possible method of market analysis and will make very accurate predictions for future Forex market behavior, you won't make any money without a proper money management strategy. Money management in Forex (as well as in other financial markets) is a complex set of rules which you develop to fit your own trading style and amount of money you have for trading. Money management play very important role in getting profits out of Forex; do not underestimate it. To get more information on money management you can read these books:
Risk Control and Money Management
Money Management (A chapter from The Mathematics of Gambling)
Forex Trading Psychology
While learning a lot about market analysis and money management is an obvious and necessary step to be a successful Forex traders, you also need to master your emotions to keep your trading performance under strict control of mind and intuition. Controlling your emotions in Forex trading is often a balancing between greed and cautiousness. Almost any known psychology practices and techniques can work for Forex traders to help them keep to their trading strategies rather to their spontaneous emotions. Problems you'll have to deal while being a professional Forex trader:
Your greed
Overtrading
Lack of discipline
Lack of confidence
Blind following others' forecasts
These are very professional books on psychology written specially for financial traders:
Calming The Mind So That Body Can Perform
The Miracle of Discipline
Forex Brokerage
Every Forex trader like any other professional needs tools to trade. One of these tools, which is vital to be in market, is a Forex broker and specifically for Internet - on-line Forex broker - a company which will provide real-time market information to trader and bring his orders to Forex market. While choosing a right Forex broker things to look for are the following:
Being a professional company you can trust
Provide you with real-time quotes
Execute your orders fast and accurately
Don't take a lot of commissions
Support the withdraw/deposit methods that you can use
For beginning Forex traders I recommend these four brokerage companies that are probably the best Forex brokers to start with:
FXOpen — one of the most popular and progressive brokers with MetaTrader platform and comfortable trading conditions for all kind of traders.
InstaForex — a reputable MetaTrader 4 brokers, allows Islamic Forex trading accounts, while you can deposit and withdraw money via WebMoney.
FXcast — good because you can start trading Forex with as little as 10$, use MetaTrader 4 platform and the dozoen of various deposit and withdraw methods, including WebMoney, e-Bullion and wire transfer.
LiteForex — broker that supports MetaTrader 4 Forex trading platform and doesn't require a lot of money to start with.

What is Stock Exchange?

A stock exchange, (formerly a securities exchange) is a corporation or mutual organization which provides "trading" facilities for stock brokers and traders, to trade stocks and other securities. Stock exchanges also provide facilities for the issue and redemption of securities as well as other financial instruments and capital events including the payment of income and dividends. The securities traded on a stock exchange include: shares issued by companies, unit trusts, derivatives, pooled investment products and bonds. To be able to trade a security on a certain stock exchange, it has to be listed there. Usually there is a central location at least for recordkeeping, but trade is less and less linked to such a physical place, as modern markets are electronic networks, which gives them advantages of speed and cost of transactions. Trade on an exchange is by members only. The initial offering of stocks and bonds to investors is by definition done in the primary market and subsequent trading is done in the secondary market. A stock exchange is often the most important component of a stock market. Supply and demand in stock markets is driven by various factors which, as in all free markets, affect the price of stocks (see stock valuation).

There is usually no compulsion to issue stock via the stock exchange itself, nor must stock be subsequently traded on the exchange. Such trading is said to be off exchange or over-the-counter. This is the usual way that derivatives and bonds are traded. Increasingly, stock exchanges are part of a global market for securities.

Basics of Forex Trading

For five days every week and during each and every hour of those days - currency traders are usually working on trying to cash in on the most fluid market ever known. In 2005, an estimated 2 trillion dollars changed hands every single day in the forex market! But do most traders even think about the Forex (foreign currencies exchange) market when thinking about where to invest? In fact, the answer is no because the market was almost the exclusive domain of large market players like the multi-national corporations, financial institutions, and big hedge funds. Only recently and mostly due to the rise of Internet-based trading, has the average investor even had the chance to invest in this fluid and liquid market. When an investor breaks FX trading down to its most basic, it really is little more than going to the airport and trading in the currency of one nation and receiving the currency of another in exchange - with the added element of having to predict how those exchange rates will change in the coming weeks, days, or even hours! However, FX trading is indeed very different from most other investment tools and investors should understand the fundamentals before investing. So what makes FX trading so different? Well, if an investor wanted to purchase stocks, options, or futures - they would need to ultimately go through some sort of regulated exchange - such as the NYSE. Currency traders have no such regulated mechanism overseeing transactions. What exactly does this mean for the average investor? - an increased element of risk. Basically, there is no grand body overseeing currency trades. Therefore, the traditional safety nets like clearing houses, arbitration boards, or even an overall governing exchange do not exist. Currency exchanges are simply made between
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Forex members based upon the credit arrangements and conditions agreed upon before the transaction - yep, that's it! This probably sounds very scary for most investors but this arrangement actually works exceedingly well - but how? Self-regulation works in currency trading because FX traders all compete and cooperate with one another regularly - basically, improper business practices are discouraged because it is in everyone's best interest to play fair. However, the market does appear to be moving in the direction of a grand governing body because a growing number of FX dealers in the United States are opting to join the NFA (National Futures Association). When they join the NFA, dealers agree to abide by any necessary arbitration arising from disputed trades. So if an investor is new to FX, then it is a good idea to seek out only dealers that have opted to become members of the NFA. However, without true oversight, some really interesting transactions occur in the FX market. For one thing, position size is unlimited (unlike futures) so it is possible to buy as much currency as one can given the amount of capital available. There also is no up-tick rule in place to prevent momentum from continuing downward when currencies really begin to lose value (as the result of a national emergency, for instance). And perhaps most surprising of all - insider trading is not a crime in the world of FX! Well, one thing that all investors familiar with the world of securities would be happy to hear is the fact that there are no commissions in FX trading! This is possible because there are no brokers - only FX dealers. So how do the traders make their money? The dealer pockets the difference between the bid/ask spread. There is a difference between the highest price that an investor is willing to pay when buying and the lowest price another investor is willing to sell for - that difference is the bid/ask spread. However, the fluid nature of the FX market tends to keep the bid/ask spread exceptionally low because of the sheer volume of the market itself. In fact, the average bid/ask spread for the entire FX market is less than 1%. For the individual investor, the absence of commissions is usually incentive enough to enter the FX market. One of the biggest and most fundamental ideas for FX traders to understand is that nothing actually is being exchanged in any given trade. The entire currencies market is nothing more than pure speculation on price movement. No
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actual trading of currencies takes place and the speculators never have possession of them. The dealers record profits and losses in their database and monies are distributed at the conclusion of the transaction or rolled over into new ones. So, the average investor may be wondering why exactly it is necessary to exchange two trillion dollars every day. Although multi-national corporations may have a legitimate need for buying materials and paying salaries in foreign markets, the vast majority of currency trades are purely investment opportunities for various investors - it is estimated that 75% or more fits into this category. Many newcomers to the FX world find themselves wondering just how such currency transactions occur. It is important to remember that all currency trades involve two currencies - or the currency pair. Taking the USD/CAN currency pair as an example, the USD would be the base currency and the CAN the counter or "terms" currency. The base currency is used to set up the account, so for a USD/CAN currency exchange, the account would be set up using USD. In this transaction, a trader would be buying Canadian dollars with US dollars. As the exchange rate favors the USD, the investor would wind up with more Canadian currency than they had initially in U.S. currency. But how does an investor make any money? If recent economic indicators pointed to a stronger U.S. economy but a weaker Canadian economy as a result of the same information, investors would likely believe that the USD will increase in value relative to the CAN. In other words, investors would be able to buy even more CAN dollars with the same initial investment of USD. Assume that an investor had $10,000 USD and wanted to buy Canadian dollars and the exchange rate at the beginning of the week was 1.2000CAN (1 USD will buy 1.2000 CAN at this rate). Therefore, with the exchange rate of 1.2000, an investor could buy 12,000 Canadian dollars with 10,000 U.S. dollars. Now in order for the exchange rate to change (and the potential for profit or loss to exist), some factor must change that favors one currency over the other. Let's assume that a major mishap occurs at an oil refinery in the Middle East - essentially, oil prices will rise. A savvy FX investor knows that Canada is a net exporter of oil while the U.S. receives half of its supply from foreign producers. Rising oil prices would benefit Canada while hurting the U.S. In the USD/CAN currency exchange, that means that 10,000 U.S. dollars would buy fewer Canadian dollars. Therefore, the savvy FX trader would realize that the short
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position would be best because he/she would be betting on the USD losing ground to the CAN in the exchange rate. If the investor believed that the USD would gain ground and increase in value relative to the CAN, he would choose the long position instead. Novice FX investors are sometimes confused by the conversion rates themselves. FX trades involve currency rates carried out to .0001, or the fourth decimal point. This .0001 is the equivalent of 1 pip, or the smallest amount a currency can move in value. Pips are sometimes referred to as points. All major currencies are tracked down to the .0001 point with the exception of the yen from Japan. In USD/JPY transactions, the exchange rate is only reported to the .01 decimal place. Just as options are written in 100-share blocks, currency trades have standard lot sizes and they equal 100,000 units. Thus, for a standard lot size transaction involving a USD/CAN currency trade, the base currency is the USD and will be used to set up the position with 100,000 USD being used to purchase however many CAN the current exchange rate permits - with an exchange rate of 1.2000CAN that would be 120,000 Canadian dollars. FX trades can also be conducted using mini-lots of 10,000 units and micro lots of 1,000 units. Some newcomers to FX trading might be intimidated by lot sizes of 100,000 units but a 1% margin is all that is required by most dealers to create a position. However, investors must be careful about drawdown and have predetermined stop points that will limit risk because currencies can move rapidly and quickly eliminate any equity the investor has in their trading account. Once that equity is gone, the investor will be responsible for any remaining loss after the position has been liquidated.

FOREX FAQs

What is an interest rate differential?What is an interest rate differential?
zSB(3,3)
What is an Expert Advisor?What is an Expert Advisor
See more links below...
Sponsored Links
Forex TradingNew to Forex? Start Here. $50,000 Practice Account. GFT www.GFTuk.com
dbFX - Forex TradingTrade forex directly from charts Try our trading platform - Free www.dbfx.com
Forex TradingTrade with zero commissions, Free charts and Practice Account. www.gcitrading.com
What is MetaTraderWhat is MetaTrader?
What is a take profit order?A description of take profit orders
What is a stop loss?
A description of stop loss orders

What is a mini lot?
What does the term mini lot mean?

What does it mean to "go long"?
What does the term "go long" mean?

What does it mean to go short?
What does the term "go short" mean?

What is a forex spread?
What is a forex spread?

What is scalping?
What is scalping and why do you do it?

What is backtesting?
What is backtesting and why should you do it?

What is the US Dollar Index
The US Dollar index was created to measure the value of the United States Dollar against a basket of foreign currencies.

What does buy the rumor sell the news mean?

Buy the rumor, sell the news is something that happens in most markets, particularly financial. Sometimes traders trade based on what they believe will happen in a given economic report, or event. Once the event passes or the report is released, they dump their positions and the market moves.

What is market noise?

Market noise is the seemingly mindless back and forth movement on the smaller timeframes. A trader’s definition of market noise is usually relative to the time frames that they are trading. A trader that trades a 1 hour time frame might think that the 15 min chart contains market noise while a trader that trades 15 minute charts might think that a 5 minute chart contains market noise.

5 Things to Look for in a Forex Broker

Looking for a forex broker can be time consuming and confusing. Here is a list of 5 things to look for when trying to choose a forex broker.

When does the forex market open?
The forex market is open almost all of the time! It opens on Sunday night around 21:00 GMT and closes on Friday afternoon around 21:00 GMT. Forex traders can initiate trades at anytime between Sunday and Friday.

What are the best forex trading hours?
The best time to trade the forex markets is between 8:00 GMT and 16:00 GMT. These are basically the hours of the London market with the last 5 hours being in overlap with the US market.

What is a Margin Call?
A margin call happens when a trading account no longer has enough money to support the open trades. This happens when there are too many floating losses.



What is an interest rate differential?What is an interest rate differential?
zSB(3,3)
What is an Expert Advisor?What is an Expert Advisor
See more links below...
Sponsored Links
Forex TradingNew to Forex? Start Here. $50,000 Practice Account. GFT www.GFTuk.com
dbFX - Forex TradingTrade forex directly from charts Try our trading platform - Free www.dbfx.com
Forex TradingTrade with zero commissions, Free charts and Practice Account. www.gcitrading.com
What is MetaTraderWhat is MetaTrader?
What is a take profit order?A description of take profit orders
What is a stop loss?A description of stop loss orders
What is a mini lot?What does the term mini lot mean?
What does it mean to "go long"?What does the term "go long" mean?
What does it mean to go short?What does the term "go short" mean?
What is a forex spread?What is a forex spread?
What is scalping?What is scalping and why do you do it?
What is backtesting?What is backtesting and why should you do it?
What is the US Dollar IndexThe US Dollar index was created to measure the value of the United States Dollar against a basket of foreign currencies.
What does buy the rumor sell the news mean?Buy the rumor, sell the news is something that happens in most markets, particularly financial. Sometimes traders trade based on what they believe will happen in a given economic report, or event. Once the event passes or the report is released, they dump their positions and the market moves.
What is market noise?Market noise is the seemingly mindless back and forth movement on the smaller timeframes. A trader’s definition of market noise is usually relative to the time frames that they are trading. A trader that trades a 1 hour time frame might think that the 15 min chart contains market noise while a trader that trades 15 minute charts might think that a 5 minute chart contains market noise.
5 Things to Look for in a Forex BrokerLooking for a forex broker can be time consuming and confusing. Here is a list of 5 things to look for when trying to choose a forex broker.
When does the forex market open?The forex market is open almost all of the time! It opens on Sunday night around 21:00 GMT and closes on Friday afternoon around 21:00 GMT. Forex traders can initiate trades at anytime between Sunday and Friday.
What are the best forex trading hours?The best time to trade the forex markets is between 8:00 GMT and 16:00 GMT. These are basically the hours of the London market with the last 5 hours being in overlap with the US market.
What is a Margin Call?A margin call happens when a trading account no longer has enough money to support the open trades. This happens when there are too many floating losses.
What is a Pip?PIP stands for Percentage In Point. It is equal to 1/100 of 1%. In forex, currency prices are typically quoted to the fourth decimal.
How much money do I need to get started?The amount of money that you will need to open an account depends on the broker. Brokers such as Oanda will allow you to open an account with as little as $1 while brokers like FXCM require at least $300. If you aren’t ready to commit real money yet, you can always start with a demo account.
Mistakes That Forex Traders MakeWhen beginning in forex trading, there are common mistakes to be avoided. This is a list of common forex trading mistakes.
Why Do Brokers Give You So Much Leverage?Brokers make their money on the spread. They are happy to provide leverage to forex traders because the bigger the trade, the more the pips in the spread are worth.
Do I need good credit to trade on margin?Brokers are more than happy to give you margin to trade on because it is part of how they make their money. Brokers make their money by collecting the spread and the larger your trade is on the market, the more the spread is worth.
Is forex trading risky?Forex trading can be very risky if you don't use proper risk management. Forex is considered to be one of the most risky forms of investing because of the availability of leverage.
What is the Interbank?The Interbank is not really a center exchange where everything is traded. Interbank actually means "between one or more banks".
What is Carry Trading?Carry trading is when you take advantage of the interest rate differential between two currencies. For example, if the interest rate on the British Pound(GBP) is 5.75% and the interest rate on the US Dollar(USD) is 4.25% and you place a buy trade on GBP/USD, you will collect the difference between the two interest rates or 1.50% As long as you hold that trade open, you will be paid that interest differential every day.
PIP stands for Percentage In Point. It is equal to 1/100 of 1%. In forex, currency prices are typically quoted to the fourth decimal.

How much money do I need to get started?

The amount of money that you will need to open an account depends on the broker. Brokers such as Oanda will allow you to open an account with as little as $1 while brokers like FXCM require at least $300. If you aren’t ready to commit real money yet, you can always start with a demo account.

Mistakes That Forex Traders Make...

When beginning in forex trading, there are common mistakes to be avoided. This is a list of common forex trading mistakes.
Why Do Brokers Give You So Much Leverage?Brokers make their money on the spread. They are happy to provide leverage to forex traders because the bigger the trade, the more the pips in the spread are worth.

Do I need good credit to trade on margin?

Brokers are more than happy to give you margin to trade on because it is part of how they make their money. Brokers make their money by collecting the spread and the larger your trade is on the market, the more the spread is worth.
Is forex trading risky?Forex trading can be very risky if you don't use proper risk management. Forex is considered to be one of the most risky forms of investing because of the availability of leverage.

What is the Interbank?

The Interbank is not really a center exchange where everything is traded. Interbank actually means "between one or more banks".
What is Carry Trading?

Carry trading is when you take advantage of the interest rate differential between two currencies. For example, if the interest rate on the British Pound(GBP) is 5.75% and the interest rate on the US Dollar(USD) is 4.25% and you place a buy trade on GBP/USD, you will collect the difference between the two interest rates or 1.50% As long as you hold that trade open, you will be paid that interest differential every day.

Forex Market

Trade Around the Clock The forex market is a near-seamless 24-hour market. Subject to available liquidity, FXCM offers trading from Sunday, starting after 5:15 PM EST, until Friday, 4PM, EST (FXCM Client Service is available 24/7). With the ability to trade around the clock, currency traders have the advantage of customizing their own trading schedule; they can usually get in or out of the market at any time without waiting for an opening bell or encountering a market gap. While trading stocks after usual market hours is possible, very often that possibility is negated by a lack of order flow or a drastic widening of the bid-ask spread. Pay No Commissions* In the forex market costs are confined to the bid-ask spread. FXCM charges no commission or additional transaction fees, and its customers trade on spreads provided to FXCM by some of the world's largest banks via the FX Trading Station. In the stock market, “no-fee” programs are frequently offered only with provisos mandating minimum account balances or minimum trades per month. * FXCM is compensated through the bid/ask spread except where otherwise noted. Please note commission charges apply for certain classes of non-standard accounts such as Active Trader. For additional information click here. No Uptick Rule Unlike the equity market, there is no restriction on short selling in the forex currency market, no matter which way the market is moving. Since currency trading involves buying one currency and selling another, a trader has the same ability to trade in a rising market as in a falling one. Forex Market Information Easily Accessible Information about stocks is abundant, but so are the stocks. Finding a trade opportunity in the equities markets may mean sifting through data on thousands of stocks, while the forex trader has only six major currencies to research. Additionally, the vital information that moves equity markets, such as revenues and profits, is proprietary and private. In contrast, virtually all of the news that bears on the forex market is in publicly disseminated reports from governments or research institutions, and released to everybody at the same time. We feel that the knowledge you've gained in analyzing stocks can easily be transferred to the forex market. Many of the economic indicators familiar to equity traders, such as payroll data and interest rates, affect the currency markets. And many technical traders have found the forex market to be particularly attractive, since currencies respond well to many of the common technical indicators, such as MACD, RSI, and Candlestick charting. To learn more about transitioning from trading equity markets to trading in the Forex market, contact the FXCM staff today at 888-503-6739.*FXCM is compensated for its services through the bid ask spread. --> High Risk Investment Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Overview: GFX2

If your bank has customers who do business overseas, you need an easy way to send money internationally. BankServ's Global Funds Exchange Foreign Exchange (GFX2) service offers a new way to carry out foreign-currency transactions automatically, quickly and inexpensively — even if you are not a SWIFT member bank.
Through a partnership with one of the largest U.S. providers in the foreign exchange market, BankServ has added a real-time foreign exchange feature to its current GFX wire payment system. International payments can now be carried out from start to finish with the same program that our domestic wire clients have been using for years.
GFX2 offers a streamlined exchange process and wholesale rates for all major foreign currencies. Since the service is an extension of BankServ's existing GFX wire transfer application, users keep all the same advantages, including:
Automatic OFAC screening
Instant notification
State-of-the-art security
Automated accounting interfaces
Online transaction history archiving
If you're struggling with the manual processes and operational issues of working through a stand-alone correspondent bank's system, think about GFX2 as the solution to your international payments integration needs.

Kinds of Forex Trading System

Although the currency exchange market is not really what we can call as a newbie-friendly business, a lot of people want to learn forex day trading basics so that they can see for themselves if this earning opportunity if the right one for them.
And the first lesson in forex day trading basics lies in knowing the different kinds of trading systems in this industry.
Day Trading Basics Lesson 1: Currency Spot Trading
Currency spot trading means exactly what its name implies: trading currencies on the spot. This occurs when one investor agrees with another investor to trade currencies during the course of trading hours. These investors should be able to complete their trade within 48 hours, given the volatile nature of currency exchange rates.
The only exception to this rule is when Canadian dollar is involved, in which case, the trade must be completed within a day's time.
Day Trading Basics Lesson 2: Forward Currency Trading
Forward currency trading is the perfect setup for investors who want to take the speculative game a little further, by investing on currencies now and reaping its benefits later on.]
For the purpose of studying day trading basics, please take note that currencies traded in this kind of system depend on the value of the currencies at the time they change hands. If they will depend on the value of the currency at the time the deal was made, then it won't be a forward trading setup, rather, it will fall under the system we will be discussing next.
Day Trading Basics Lesson 3: Future Currency Trading
Future currency trading is somewhat similar to forward currency trading. The only difference? Whereas in forward currency trading, the parties have to exchange currencies based on their values at the time the trade is consummated, in future currency trading, the trade will depend on the value of the currencies at the time the agreement is made.
Day Trading Basics Lesson 4: Options Currency Trading
In options currency trading, the buyer buys the "option" to trade a particular currency for a particular price at a particular period he will name. The seller will be obliged to deliver the particular currency in accordance with the terms provided by the buyer.

What is Forex Trading?

Forex Trading is the act of trading currencies from different countries against each other. Forex is acronym of Foreign Exchange.
For example, in Europe the currency in circulation is called the Euro (EUR) and in the United States the currency in circulation is called the US Dollar (USD). An example of a forex trade is to buy the Euro while simultaneously selling US Dollar. This is called going long on the EUR/USD.
How Does Forex Trading Work?
Forex trading is typically done through a broker or market maker. As a forex trader you can choose a currency pair that you feel is going to change in value and place a trade accordingly. For example, if you had purchased 1,000 Euros in January of 2005, it would have cost you around $1,200 USD. Throughout 2005 the Euro’s value vs. the U.S. Dollar’s value increased. At the end of the year 1,000 Euros was worth $1,300 U.S. Dollars. If you had chosen to close your trade at that point, you would have made $100.
Forex trades can be placed through a broker or market maker. Orders can be placed with just a few clicks and the broker then passes the order along to a partner in the Interbank Market to fill your position. When you close your trade, the broker closes the position on the Interbank Market and credits your account with the loss or gain. This can all happen literally within a few seconds.