Forex คืออะไร?
Forex ย่อมาจาก Foreign Exchange บางครั้งเรียกย่อว่า FX คือ อัตราแลกเปลี่ยนเงินตรา
Forex Market หรือ ตลาด Forex เป็นตลาดการเงินที่ใหญ่ที่สุดในโลก ด้วยมูลค่าการซื้อขายมากกว่า US$ 2 trillion (2 ล้านล้านดอลลาร์) ต่อวัน เป็นตลาดการเงิน ที่มีสภาพคล่องสูงมาก ตลาดเปิดทำการซื้อขาย 24 ชั่วโมง ตลอดวันทำการ โดยหยุดการซื้อขาย แค่วัน เสาร์-อาทิตย์เท่านั้น
การซื้อขายใน ตลาด Forex เป็นการซื้อขายค่าเงิน โดยซื้อเงินสกุลหนึ่ง ในขณะเดียวกัน ก็ขายเงินอีกสกุลหนึ่งออกไป หรือเป็นการจับคู่แลกเปลี่ยน ซื้อขายค่าสกุลเงินนั่นเอง ตัวอย่างเช่น เงินสกุลยูโร/ดอลลาร์สหรัฐฯ (EUR/USD) หรือ เงินสกุลดอลลาร์สหรัฐ/เยนญี่ปุ่น (USD/JPY) เป็นต้น
ค่าเงินสกุลต่างๆ ที่มีการแลกเปลี่ยนซื้อขายในตลาด Forex ที่สำคัญ มีดังนี้
Symbol
ชื่อสกุลเงิน
ชื่อเรียก
ประเทศ
ตลาด เปิด-ปิด
USD
ดอลลาร์
Buck
สหรัฐอเมริกา 19.00-03.00
EUR
ยูโร
Fiber
สหภาพยุโรป 13.00-21.00
JPY
เยน
Yen
ญี่ปุ่น 06.00-14.00
GBP
ปอนด์
Cable
อังกฤษ 14.00-22.00
CHF
ฟรังซ์
Swissy
สวิสเซอร์แลนด์ 13.00-21.00
CAD
ดอลลาร์
Loonie
แคนาดา 19.00-03.00
AUD
ดอลลาร์
Aussie
ออสเตรเลีย 05.00-12.00
NZD
ดอลลาร์
Kiwi
นิวซีแลนด์ -
การที่เราจะซื้อขายใน ตลาด Forex จะต้องเปิดบัญชีกับ Forex Broker เป็นโบรกเกอร์ทางอินเตอร์เน็ต เราสามารถเทรดออนไลน์ได้ ตลอด 24 ชั่วโมง ตั้งแต่เช้าวันจันทร์ ถึง คืนวันศุกร์ สำหรับมือใหม่ ยังไม่เคยเทรดเลย แนะนำลองเปิดบัญชีของ Marketiva ดูครับ มีเงินปลอมให้เล่น $20000 (เบิกเป็นเงินจริงไม่ได้ เอาไว้ฝึกเทรด) และมีเงินจริงให้ฟรีอีก $5 ดอลลาร์ หรือ โบรกเกอร์ที่แนะนำ คลิกที่นี่
ตารางเวลาเปิด-ปิดตลาด ของแต่ละโซน (ค่าเงิน)
ตลาดของแต่ละโซนจะเปิด-ปิด คาบเกี่ยวกันตลอดทั้งวัน ทำให้เราสามารถเทรดได้ 24 ช.ม. แต่ช่วงที่เหมาะแก่การเทรดคือช่วง ตลาดยูโร (EUR) เปิด ถึง หลังตลาดอเมริกา (USD) เปิด 4-5 ชม. คือแถบสีแดงด้านบน ประมาณเวลา 13.00 - 24.00 ตามเวลาไทย ปกติจะเป็นช่วงที่ตลาดผันผวน ราคามีการเปลี่ยนแปลงมากกว่าช่วงอื่น
การบริหารเงินจาก เงินฟรี $5 ให้ได้ $20480 ใน 1 ปี
บรรทัดที่ 4 จากรูปด้านบนที่ เป็น % พื้นสีม่วงอ่อน คือแผนการเทรด ว่าเราจะเทรดครั้งละกี่ % ของเงินทุน บรรทัดที่ 3 pip/day คือเป้าหมายจำนวนจุดที่เราต้องทำใน 1 วัน และ บรรทัดที่ 2 pip/month คือจำนวนจุดที่เราต้องทำใน 1 เดือน ถ้าทำตามแผนได้ทุกวันในเดือนที่ 13 เราจะได้ ยอด $20480
ตัวอย่าง ถ้าเราใช้แผนการลงทุนแบบ 20% (แถบสีเขียว) ในเดือนแรก เราจะลงทุนวันละ 1$ หากเราทำได้วันละ 25 จุดทุกวัน พอครบ 1 เดือน ได้ 500 จุด เราจะได้กำไร 100% ได้เงินทุนเพิ่มเป็น $10 พอเดือนที่ 2 ก็ลงเพิ่มเป็น ครั้งละ $2 ทำตามตารางแบบนี้ไปเรื่อยๆ เพิ่มขึ้น 100% หรือ 2 เท่าในทุกเดือน จนครบทุกเดือน ก็จะได้ยอดเงินตามเป้าหมาย
หากเราเลือก แผนลงทุนที่ใช้เทรดต่อครั้งด้วย % ลดลง เราก็ต้องทำ จุด ให้ได้มากขึ้นต่อวัน และในทางกลับกัน หากลงทุนด้วย % เพิ่มขึ้น เราก็ทำกำไรด้วย จุด ที่น้อยลง
อันนี้เป็นตัวอย่างแบบแผนการลงทุน อาจจะเห็นว่าง่ายๆ แต่จริงๆ เวลาเทรดจะไม่ง่ายแบบในตารางนี้นะครับ เราจะต้องฝึกฝน ศึกษาหาความรู้ เพื่อให้เราชำนาญ เทรดให้ได้ตามเป้าหมายที่กำหนด ซึ่งไม่ใช่เรื่องง่ายเลย แนะนำให้ลองฝึกจากเงินปลอมก่อนให้เข้าใจ จึงเริ่มเทรดด้วยเงินจริง
การลงทุนคือความเสี่ยง ยิ่งผลตอบแทนเยอะความเสี่ยง ก็ยิ่งเยอะตามไปด้วย จึงควรศึกษาให้เข้าใจก่อน การลงทุนครับ
1. ศึกษากราฟ รูปแบบราคา อินดิเคเตอร์ เพื่อหาแนวโน้มของราคา และสัญญาณในการเข้าเทรด การหาจังหวะปิดเพื่อทำกำไร เหล่านี้สามารถหาศึกษา ได้ตามเว็บต่างๆ ตามลิงค์ด้านขวามือครับ
2. ศึกษาหลักการบริหารเงินในบัญชี และบริหารความเสี่ยง
3. ขยันศึกษาหาความรู้เพิ่มเติมเสมอครับ
3/05/2008
Is Online Forex Trading for You?
By: Gerald Greene
Forex trading is the Big Daddy of the investment world. Daily volume far surpasses that of all of the world's stock markets combined. Major participants include governments, corporations involved in international trade, banks and financial institutions, hedge funds, and large professional traders.
Until recently, trading forex was beyond the reach of the small to average private trader. However, the growth of the Internet and the rapid growth of online forex brokerage firms that target the smaller investor have changed that. Internet technology now allows online firms to provide the necessary forex data feeds and information flows directly to your computer, often free of charge.
Just a few years go the data feeds were too expensive except for those with deep pockets who were trading large sums of money.
The average trader/investor can now easily open an online forex account and trade alongside the big boys. But should he/she?
Despite the claims you may see on some FOREX web sites, FOREX is not risk-free. You are trading with substantial sums of money and there is always a possibility that trades will go against you.
There are software trading tools, however, that can minimize your risk, and with caution, and above all education, the FOREX trader can learn how to trade profitably while minimizing losses that are part of the business on the losing trades.
No one should trade forex without first doing a good bit of research and study. One of the best ways to become comfortable with the pricing, trading procedures, and software is to open an online trading practice account. Most online forex brokers offer free trading accounts where you can make trades with "paper money" and in addition access online lessons about how best to trade successfully.
Forex trading when properly done can be quite profitable. But it is a specialized business and is not for the lazy or fainthearted. You must devote some time to educate yourself about trading forex before placing real money at risk. Then you should start out by trading small. See how you do trading real money before ramping up to trading substantial positions.
While trading your practice account will quickly bring up your comfort level as to procedues and managing the software, you will soon find that trading real money and putting that money at risk is an entirely different psychological matter. Some traders will enjoy the challenge and some will not.
If you feel extremely uncomforable while trading then perhaps forex trading is not for you. Like any specialized business some folks will be suited for trading forex and some will not be. It's better to pass if you feel too confused or just don't want to work at it. It's far better to pass and save your money than feed the big alligator until the dent in your bank account forces you to stop.
You may also find that forex trading is not for you if you are too relaxed and trade like a madman. Profitable forex trading requires care in choosing low risk entry points and a lack of self discipline in following a well thought out trading strategy will lead only to losses.
In summary, forex is an exciting and potentially profitable business. However, before you can expect to trade well you must become well educated and follow a trading plan that will limit your trading to trades that have a high percentage of being winners.
Forex trading is the Big Daddy of the investment world. Daily volume far surpasses that of all of the world's stock markets combined. Major participants include governments, corporations involved in international trade, banks and financial institutions, hedge funds, and large professional traders.
Until recently, trading forex was beyond the reach of the small to average private trader. However, the growth of the Internet and the rapid growth of online forex brokerage firms that target the smaller investor have changed that. Internet technology now allows online firms to provide the necessary forex data feeds and information flows directly to your computer, often free of charge.
Just a few years go the data feeds were too expensive except for those with deep pockets who were trading large sums of money.
The average trader/investor can now easily open an online forex account and trade alongside the big boys. But should he/she?
Despite the claims you may see on some FOREX web sites, FOREX is not risk-free. You are trading with substantial sums of money and there is always a possibility that trades will go against you.
There are software trading tools, however, that can minimize your risk, and with caution, and above all education, the FOREX trader can learn how to trade profitably while minimizing losses that are part of the business on the losing trades.
No one should trade forex without first doing a good bit of research and study. One of the best ways to become comfortable with the pricing, trading procedures, and software is to open an online trading practice account. Most online forex brokers offer free trading accounts where you can make trades with "paper money" and in addition access online lessons about how best to trade successfully.
Forex trading when properly done can be quite profitable. But it is a specialized business and is not for the lazy or fainthearted. You must devote some time to educate yourself about trading forex before placing real money at risk. Then you should start out by trading small. See how you do trading real money before ramping up to trading substantial positions.
While trading your practice account will quickly bring up your comfort level as to procedues and managing the software, you will soon find that trading real money and putting that money at risk is an entirely different psychological matter. Some traders will enjoy the challenge and some will not.
If you feel extremely uncomforable while trading then perhaps forex trading is not for you. Like any specialized business some folks will be suited for trading forex and some will not be. It's better to pass if you feel too confused or just don't want to work at it. It's far better to pass and save your money than feed the big alligator until the dent in your bank account forces you to stop.
You may also find that forex trading is not for you if you are too relaxed and trade like a madman. Profitable forex trading requires care in choosing low risk entry points and a lack of self discipline in following a well thought out trading strategy will lead only to losses.
In summary, forex is an exciting and potentially profitable business. However, before you can expect to trade well you must become well educated and follow a trading plan that will limit your trading to trades that have a high percentage of being winners.
Forex Tutorial - Start Right Here
By: Michael Williams
If you are a beginner in the Forex market a great thing to look into would be a Forex tutorial. A Forex training is an excellent source in gaining knowledge about the inner workings of the Forex market. Through a good Forex tutorial a beginner can learn basic trading skills and techniques in order to learn how to chart the market properly. This is definitely something that is extremely important and useful for anyone choosing to become a Forex trader.
Not that long a go finding a foreign exchange tutorial was not that easy a thing to find. Finding a Forex training was next to impossible because accessibility to the Forex market was limited to banks and large financial institutions only. Online trading has opened the doors to many more, including individuals who benefit the most from having a tutorial.
Nowadays there are many places to look for a Forex tutorial. Not only are there individuals providing these services, but also organizations and institutions as well. They offer these services in many different ways, such as online and in a classroom. This allows those looking for a tutorial to find one that suits their needs the best.
A lot of those who use these tutorials like the advantage of online availability. This is allows them to get started in trading while still learning in their free time. As well as being able to do it any time, they can also take the Forex tutorial from wherever they want as well. The only disadvantage to these is the absence of one on one interaction between a student and teacher. Whether this is important to you or not, is up to you.
Every Forex training that is available however will come with some kind of disclaimer that they are only for knowledge. This means that they cannot guarantee any profits. This puts the onus on the reader to use the knowledge to the best of their abilities. It is a fair statement, because it does require skills to turn a profit properly, not just book knowledge.
Because the Forex market is in real time with instant decisions required of traders, Forex tutorials are not completely beneficial on their own. The trader in the Forex market also has to take into consideration market analysis, market intelligence and their understanding of market movement.
This however does not mean that a foreign exchange tutorial is not beneficial at all. They are definitely a great foundation to have in learning about the Forex market. So take a Forex tutorial, but remember you must have skills and experience to build upon what you may learn there.
If you are a beginner in the Forex market a great thing to look into would be a Forex tutorial. A Forex training is an excellent source in gaining knowledge about the inner workings of the Forex market. Through a good Forex tutorial a beginner can learn basic trading skills and techniques in order to learn how to chart the market properly. This is definitely something that is extremely important and useful for anyone choosing to become a Forex trader.
Not that long a go finding a foreign exchange tutorial was not that easy a thing to find. Finding a Forex training was next to impossible because accessibility to the Forex market was limited to banks and large financial institutions only. Online trading has opened the doors to many more, including individuals who benefit the most from having a tutorial.
Nowadays there are many places to look for a Forex tutorial. Not only are there individuals providing these services, but also organizations and institutions as well. They offer these services in many different ways, such as online and in a classroom. This allows those looking for a tutorial to find one that suits their needs the best.
A lot of those who use these tutorials like the advantage of online availability. This is allows them to get started in trading while still learning in their free time. As well as being able to do it any time, they can also take the Forex tutorial from wherever they want as well. The only disadvantage to these is the absence of one on one interaction between a student and teacher. Whether this is important to you or not, is up to you.
Every Forex training that is available however will come with some kind of disclaimer that they are only for knowledge. This means that they cannot guarantee any profits. This puts the onus on the reader to use the knowledge to the best of their abilities. It is a fair statement, because it does require skills to turn a profit properly, not just book knowledge.
Because the Forex market is in real time with instant decisions required of traders, Forex tutorials are not completely beneficial on their own. The trader in the Forex market also has to take into consideration market analysis, market intelligence and their understanding of market movement.
This however does not mean that a foreign exchange tutorial is not beneficial at all. They are definitely a great foundation to have in learning about the Forex market. So take a Forex tutorial, but remember you must have skills and experience to build upon what you may learn there.
Learn Forex Trading - How Can I Make It Work?
By: Michael Williams
Once you have decided to enter the Forex market, you must decide how you will go about starting to learn Forex trading. Indeed when you do begin to know more on Forex trading you have three different ways to go about it. You can either join an online, or even one that isn't, Forex school, become an apprentice for a Forex trader or broker or go it alone and do it yourself. The last way to master Forex trading is probably not the best way, and indeed carries a lot of risk, especially for someone who is just beginning. This is because the Forex market is very volatile, which makes it even harder to learn Forex trading.
For someone just starting out, the first two ways mentioned are much safer. When you learn foreign exchange trading in these ways, you have the bonus of experienced instructors to benefit from. Especially with an apprenticeship the learning process can be had in real time. Learning like this can actually be the best way to learn Forex trading. This is because when you are able to actually see decisions and processes being made you can benefit more thoroughly then through the filtered and neat classroom experience.
For someone who has just begun Forex trading there are three main things they need to know. The first main idea or concept to be learned is what is called the process.
The process of the Forex market has to do with the fact that it is the largest market on the entire globe and is operated twenty-four hours a day. The process also includes the fact that all of the business is carried out in real time with no boundaries. Also what needs to be known about the process involves the fact that the trader has the option in either dealing in his or her national currency or in a foreign one. Remember when you begin to learn Forex trading and this aspect of it that there are no barriers, no entry points and you really need to make sure that you thoroughly have an understanding of it before jumping in.
Another aspect when you begin Forex trading is to learn about mapping or charting. Someone who is just starting out should begin to learn how to use the charting software available in order to properly map the market and how it moves. This information gathered by the software will better enable a trader with what they need to know to make better decisions and therefore earn better profits. A trader in combination with instinct to make better overall decisions as well as calculating the best times to buy or sell can use the software involved with charting.
The last thing that needs to be a part of the process when you start to learn Forex trading is called trading psychology. This aspect includes a trader learning to deal with his or her losses and if they happen to have a lot of them in a short period of time they should stop for a while. Something else that is part of trading psychology is that the trader needs to make sure they are not letting themselves get carried away in making too many trades just because of good profits.
In the end you must decide which way is the best for you personally to learn foreign exchange trading. Although most people would say that the best way is to learn while trading. A hand on approach when it comes time for you to learn Forex trading seems to be the one with the best benefits.
Once you have decided to enter the Forex market, you must decide how you will go about starting to learn Forex trading. Indeed when you do begin to know more on Forex trading you have three different ways to go about it. You can either join an online, or even one that isn't, Forex school, become an apprentice for a Forex trader or broker or go it alone and do it yourself. The last way to master Forex trading is probably not the best way, and indeed carries a lot of risk, especially for someone who is just beginning. This is because the Forex market is very volatile, which makes it even harder to learn Forex trading.
For someone just starting out, the first two ways mentioned are much safer. When you learn foreign exchange trading in these ways, you have the bonus of experienced instructors to benefit from. Especially with an apprenticeship the learning process can be had in real time. Learning like this can actually be the best way to learn Forex trading. This is because when you are able to actually see decisions and processes being made you can benefit more thoroughly then through the filtered and neat classroom experience.
For someone who has just begun Forex trading there are three main things they need to know. The first main idea or concept to be learned is what is called the process.
The process of the Forex market has to do with the fact that it is the largest market on the entire globe and is operated twenty-four hours a day. The process also includes the fact that all of the business is carried out in real time with no boundaries. Also what needs to be known about the process involves the fact that the trader has the option in either dealing in his or her national currency or in a foreign one. Remember when you begin to learn Forex trading and this aspect of it that there are no barriers, no entry points and you really need to make sure that you thoroughly have an understanding of it before jumping in.
Another aspect when you begin Forex trading is to learn about mapping or charting. Someone who is just starting out should begin to learn how to use the charting software available in order to properly map the market and how it moves. This information gathered by the software will better enable a trader with what they need to know to make better decisions and therefore earn better profits. A trader in combination with instinct to make better overall decisions as well as calculating the best times to buy or sell can use the software involved with charting.
The last thing that needs to be a part of the process when you start to learn Forex trading is called trading psychology. This aspect includes a trader learning to deal with his or her losses and if they happen to have a lot of them in a short period of time they should stop for a while. Something else that is part of trading psychology is that the trader needs to make sure they are not letting themselves get carried away in making too many trades just because of good profits.
In the end you must decide which way is the best for you personally to learn foreign exchange trading. Although most people would say that the best way is to learn while trading. A hand on approach when it comes time for you to learn Forex trading seems to be the one with the best benefits.
Forex Trading Education - Whats the ROI?
By: Michael Williams
The traders that tend to do better in the Forex market are those who have undertaken some kind of Forex trading education. Jumping in blindly can be a big mistake in the high-risk world of the Forex market. This is because of decisions in the Forex market is made in real time and is usually made in seconds and Forex education can benefit the beginner immensely. This means that those traders who decide on Forex trading training are better equipped to handle the stress and demands than those who do not and rely solely on instinct and experience.
Those who are just beginning will benefit the most from foreign exchange education. This is because from FX education they will be able to learn market mechanics, how different software tools work, how to read a Forex chart, how a trade is closed and when the best time to make a bid is. The most important of these is learning about charting. Taking a class in forex trade is always the best route for a beginner in the Forex market.
Something else that should be learned and can be gleaned from a Forex trading education is why the Forex market is so volatile. Charting and learning about it can definitely help track the reasons that shifts happen in the market and can greatly increase the success of the trader who knows how to read them. Of course there are no guarantees but it can definitely decrease some of the risk.
Forex trading training should always first and foremost cover the basics. These basics include concepts such as margins, types of orders, bids, rollovers and leveraging. Of course Forex trading training should also cover technical and fundamental analysis. These are two types of market analysis that analyze key aspects from different perspectives. This area includes charting and how to read and make them correctly in order to conduct business with any measure of success. One last thing it should cover is trading psychology, which includes learning how to handle the psychological pressure that may occur in such a fast paced environment such as the Forex market. This can include building skills and habits such as discipline, patience, and commitment and risk management.
Forex trading education can also have an aspect to it that teaches the history of the market. Something else that is exceptionally beneficial in a Forex education is one that teaches the common mistakes that can be made and ways to avoid making them. These aspects should be a part of either an online class or one that is real life either way.
In the end having the advantage of a Forex trading education can make a difference. Whether or not you choose to benefit from it is up to you. But having a Forex education can help a beginner immensely and can also benefit those who are not and can make the difference in whether or not you turn a profit. This alone is enough to highly recommend a Forex trading training.
The traders that tend to do better in the Forex market are those who have undertaken some kind of Forex trading education. Jumping in blindly can be a big mistake in the high-risk world of the Forex market. This is because of decisions in the Forex market is made in real time and is usually made in seconds and Forex education can benefit the beginner immensely. This means that those traders who decide on Forex trading training are better equipped to handle the stress and demands than those who do not and rely solely on instinct and experience.
Those who are just beginning will benefit the most from foreign exchange education. This is because from FX education they will be able to learn market mechanics, how different software tools work, how to read a Forex chart, how a trade is closed and when the best time to make a bid is. The most important of these is learning about charting. Taking a class in forex trade is always the best route for a beginner in the Forex market.
Something else that should be learned and can be gleaned from a Forex trading education is why the Forex market is so volatile. Charting and learning about it can definitely help track the reasons that shifts happen in the market and can greatly increase the success of the trader who knows how to read them. Of course there are no guarantees but it can definitely decrease some of the risk.
Forex trading training should always first and foremost cover the basics. These basics include concepts such as margins, types of orders, bids, rollovers and leveraging. Of course Forex trading training should also cover technical and fundamental analysis. These are two types of market analysis that analyze key aspects from different perspectives. This area includes charting and how to read and make them correctly in order to conduct business with any measure of success. One last thing it should cover is trading psychology, which includes learning how to handle the psychological pressure that may occur in such a fast paced environment such as the Forex market. This can include building skills and habits such as discipline, patience, and commitment and risk management.
Forex trading education can also have an aspect to it that teaches the history of the market. Something else that is exceptionally beneficial in a Forex education is one that teaches the common mistakes that can be made and ways to avoid making them. These aspects should be a part of either an online class or one that is real life either way.
In the end having the advantage of a Forex trading education can make a difference. Whether or not you choose to benefit from it is up to you. But having a Forex education can help a beginner immensely and can also benefit those who are not and can make the difference in whether or not you turn a profit. This alone is enough to highly recommend a Forex trading training.
Forex Trading Strategy - Finding the Right One For You
By: Michael Williams
The first thing someone needs when beginning in the Forex market is a well thought out Forex trading strategy. This is because those who do not have a good foreign exchange trading strategy usually end up failing miserably. Of course those who are also in it just for a quick buck, will invariably end up losing in the long run. Those without a clear trading strategy will either lose constantly or just break even.
A lot of times the Forex trading strategy will be different depending on different traders. This is because different kinds of traders needs require different kinds of forex trade strategies. A Forex trading strategy for a day trader will reflect their need to be concerned with day-to-day fluctuations than long-term data. This means that someone who is deciding to become a Forex trader needs to first decide what kind of Forex trader he or she are going to be. Once they decide which kind of trader they are going to be they will better be able to plan their trading strategy.
A very important aspect of every strategy is to be able to lessen any losses or eliminate them altogether. This part of the Forex trading strategy is one that needs to be followed strictly or it can make things a complete mess. Someone who is a day trader will most likely make smaller stops. On the other hand a swing trader will have stops that are less limited. These are both different kinds of foreign exchange trading strategies, but can both lessen losses immensely for either kind of trader.
Another part of a good Forex trading strategy is to plan the size of transactions. This allows many different trades to be made at any time instead of just one huge transaction. This will lessen any loss, by dividing the trades, so not all are affected. This also brings in more discipline to the equation.
Following the trading strategy that you plan out requires discipline and following it to the letter, because the Forex market does not always lend itself to the best opportunities in trading. In the Forex market it is mostly about timing, if not all about timing. Understanding this and incorporating it into your strategy is how you will benefit the most from it.
A few other things that need to be incorporated into a good strategy is first of all acquiring accurate knowledge about the way it works, different things that can affect trade and what various software and services that are available to meet their needs for charting and such. One last thing that needs to be included of course is what other Forex traders are doing, allowing the strategy to be planned accordingly.
As you can see a lot needs to be looked at when entering the Forex market. Thoroughly and completely researching all these different aspects is an important way of preparing yourself to do so. Coming up with a Forex trading strategy that benefits the trader in the best way possible is definitely the way to go.
The first thing someone needs when beginning in the Forex market is a well thought out Forex trading strategy. This is because those who do not have a good foreign exchange trading strategy usually end up failing miserably. Of course those who are also in it just for a quick buck, will invariably end up losing in the long run. Those without a clear trading strategy will either lose constantly or just break even.
A lot of times the Forex trading strategy will be different depending on different traders. This is because different kinds of traders needs require different kinds of forex trade strategies. A Forex trading strategy for a day trader will reflect their need to be concerned with day-to-day fluctuations than long-term data. This means that someone who is deciding to become a Forex trader needs to first decide what kind of Forex trader he or she are going to be. Once they decide which kind of trader they are going to be they will better be able to plan their trading strategy.
A very important aspect of every strategy is to be able to lessen any losses or eliminate them altogether. This part of the Forex trading strategy is one that needs to be followed strictly or it can make things a complete mess. Someone who is a day trader will most likely make smaller stops. On the other hand a swing trader will have stops that are less limited. These are both different kinds of foreign exchange trading strategies, but can both lessen losses immensely for either kind of trader.
Another part of a good Forex trading strategy is to plan the size of transactions. This allows many different trades to be made at any time instead of just one huge transaction. This will lessen any loss, by dividing the trades, so not all are affected. This also brings in more discipline to the equation.
Following the trading strategy that you plan out requires discipline and following it to the letter, because the Forex market does not always lend itself to the best opportunities in trading. In the Forex market it is mostly about timing, if not all about timing. Understanding this and incorporating it into your strategy is how you will benefit the most from it.
A few other things that need to be incorporated into a good strategy is first of all acquiring accurate knowledge about the way it works, different things that can affect trade and what various software and services that are available to meet their needs for charting and such. One last thing that needs to be included of course is what other Forex traders are doing, allowing the strategy to be planned accordingly.
As you can see a lot needs to be looked at when entering the Forex market. Thoroughly and completely researching all these different aspects is an important way of preparing yourself to do so. Coming up with a Forex trading strategy that benefits the trader in the best way possible is definitely the way to go.
Forex Trading - Too Much of a Good Thing?
By: Michael Williams
When entering the world of Forex trading, you are beginning to enter a market that is very unpredictable and sometimes volatile. In foreign exchange trading, all trade is conducted in real time and this is what can cause a lot of the risk. This can make trading somewhat of a challenge, even for those who have the benefit of experience on their side. In Forex trading there are a lot of factors and patterns that need to be looked at and analyzed before one makes a trade. This can be somewhat overwhelming and daunting to a beginner in Forex trading, but if time is taken to learn, it is well worth it.
In the early days of Forex trading only large banks of financial institutions participated in the Forex market. Now anyone can participate in FX trading. This has resulted in quite a bit of liquidity to the Forex market. The number of individuals, speculators, traders and brokers has greatly increased over the years.
There are no boundaries in foreign exchange trading and it is not affected by time zones. From Sydney, Australia to the United States, it basically just stays open all the time, never sleeping. Whether it is an individual or an organization there is always someone who can be found doing business with Forex at any time of day or night.
Part of Forex trading and its success is that there is no central location or headquarters. Every single market around the world is seamlessly connected from around the globe. London, New York and Tokyo are major locations when it comes to Forex and when all three are open at once, chaos ensues. Trades and the volume of currency and different kinds being used rises sharply at this time. Other than this, the Forex market is open and operating with many lulls and busy times all the time.
Those who conduct business using Forex, base their trades on certain parameters. A lot of the traders that have been involved in Forex trading will just follow instinct and past experience that they have picked up over the years. Those who are less of risk takers or not as experienced tend to use software that is available to track patterns and chart them, then base their decisions upon this information. These charts are great for figuring out the best times to buy or sell as well. Some of the traders will even use online brokerage firms; brokers or Forex research firms to help them find important information that will help guide them in trading.
In the end the world of Forex can indeed be overwhelming and confusing to newcomers. By understanding and learning about it the best way you can, it can become less so. When deciding to become part of Forex trading the best thing to do is to make sure you always look before you jump.
When entering the world of Forex trading, you are beginning to enter a market that is very unpredictable and sometimes volatile. In foreign exchange trading, all trade is conducted in real time and this is what can cause a lot of the risk. This can make trading somewhat of a challenge, even for those who have the benefit of experience on their side. In Forex trading there are a lot of factors and patterns that need to be looked at and analyzed before one makes a trade. This can be somewhat overwhelming and daunting to a beginner in Forex trading, but if time is taken to learn, it is well worth it.
In the early days of Forex trading only large banks of financial institutions participated in the Forex market. Now anyone can participate in FX trading. This has resulted in quite a bit of liquidity to the Forex market. The number of individuals, speculators, traders and brokers has greatly increased over the years.
There are no boundaries in foreign exchange trading and it is not affected by time zones. From Sydney, Australia to the United States, it basically just stays open all the time, never sleeping. Whether it is an individual or an organization there is always someone who can be found doing business with Forex at any time of day or night.
Part of Forex trading and its success is that there is no central location or headquarters. Every single market around the world is seamlessly connected from around the globe. London, New York and Tokyo are major locations when it comes to Forex and when all three are open at once, chaos ensues. Trades and the volume of currency and different kinds being used rises sharply at this time. Other than this, the Forex market is open and operating with many lulls and busy times all the time.
Those who conduct business using Forex, base their trades on certain parameters. A lot of the traders that have been involved in Forex trading will just follow instinct and past experience that they have picked up over the years. Those who are less of risk takers or not as experienced tend to use software that is available to track patterns and chart them, then base their decisions upon this information. These charts are great for figuring out the best times to buy or sell as well. Some of the traders will even use online brokerage firms; brokers or Forex research firms to help them find important information that will help guide them in trading.
In the end the world of Forex can indeed be overwhelming and confusing to newcomers. By understanding and learning about it the best way you can, it can become less so. When deciding to become part of Forex trading the best thing to do is to make sure you always look before you jump.
FOREX Software: A Critical Element for Success
By: Steve Welker
In most cases when you sign up with a FOREX broker they will provide you with software to execute transactions as well as get market information. Since online trading has been around for quite some time now, the brokers have a pretty solid understanding of what the traders need from trading software. There are two primary classifications of software provided by the brokers; web based and client based.
One of the mandatory services needed by all FOREX software is real time market updates. Since the FOREX market is so fast paced and volatile traders must have data that is accurate to a few seconds to make decisions on when to enter and exit their positions. All brokers make claims that their software will remain updated with a minimum of delay but the reality is that there are a variety of factors that can delay the software displaying updated information.
The users internet connection speed as well as their geographical distance from the broker are probably the two primary issues that can affect the update time. If you wish to be successful trading FOREX it is highly recommended that you have a high speed internet connection and a fairly up to date computer. You might also consider selecting a broker relatively close to you; if you are trading from the US you might want to avoid a broker based out of Australia. During times of extreme market volatility this distance could cause a delay significant enough to cause issues with your trades.
Web Based or Client Based?
Web Based software is not actually installed on your computer it runs on the brokers web site. You only need to have a browser compatible with the software to access and use this software. Client based software is loaded directly on your computer; in most cases you are able to download the software from the brokers site and then install it. Web based software is rapidly growing in popularity as more and more brokers offer it. The primary advantages to web based software are convenience and security. With web based software you can log in to your account and get market updates and place trades from any computer with an internet connection. If you use client based software you are only able to make trades from the computer that you have the software installed on.
As well as being more convenient web based software also offers a higher level of security. During the actual transmission of data both web based and client based software encrypt the transmitted data with a high level encryption. On client software though there is the risk of data being stolen from the client pc by hackers or Trojans.
The most basic software packages will provide you with real time quotes and information as well as allowing you to enter and execute trades. Up to date quotes are provided for most currency pairs and the software will allow you to open or close a position at market prices. The software should also allow you to set up trades with limit orders and stop loss orders. More advanced packages will also offer charting capability that can show you many different viewpoints.
Any good broker will provide you with basic software free of charge just for using them as your broker. Many of your better brokers will offer an advanced version of their software for a fee. The advanced version will give you extra capabilities such as executing trades right from the chart and enhanced analytical ability.
In most cases when you sign up with a FOREX broker they will provide you with software to execute transactions as well as get market information. Since online trading has been around for quite some time now, the brokers have a pretty solid understanding of what the traders need from trading software. There are two primary classifications of software provided by the brokers; web based and client based.
One of the mandatory services needed by all FOREX software is real time market updates. Since the FOREX market is so fast paced and volatile traders must have data that is accurate to a few seconds to make decisions on when to enter and exit their positions. All brokers make claims that their software will remain updated with a minimum of delay but the reality is that there are a variety of factors that can delay the software displaying updated information.
The users internet connection speed as well as their geographical distance from the broker are probably the two primary issues that can affect the update time. If you wish to be successful trading FOREX it is highly recommended that you have a high speed internet connection and a fairly up to date computer. You might also consider selecting a broker relatively close to you; if you are trading from the US you might want to avoid a broker based out of Australia. During times of extreme market volatility this distance could cause a delay significant enough to cause issues with your trades.
Web Based or Client Based?
Web Based software is not actually installed on your computer it runs on the brokers web site. You only need to have a browser compatible with the software to access and use this software. Client based software is loaded directly on your computer; in most cases you are able to download the software from the brokers site and then install it. Web based software is rapidly growing in popularity as more and more brokers offer it. The primary advantages to web based software are convenience and security. With web based software you can log in to your account and get market updates and place trades from any computer with an internet connection. If you use client based software you are only able to make trades from the computer that you have the software installed on.
As well as being more convenient web based software also offers a higher level of security. During the actual transmission of data both web based and client based software encrypt the transmitted data with a high level encryption. On client software though there is the risk of data being stolen from the client pc by hackers or Trojans.
The most basic software packages will provide you with real time quotes and information as well as allowing you to enter and execute trades. Up to date quotes are provided for most currency pairs and the software will allow you to open or close a position at market prices. The software should also allow you to set up trades with limit orders and stop loss orders. More advanced packages will also offer charting capability that can show you many different viewpoints.
Any good broker will provide you with basic software free of charge just for using them as your broker. Many of your better brokers will offer an advanced version of their software for a fee. The advanced version will give you extra capabilities such as executing trades right from the chart and enhanced analytical ability.
Forex - Start To Learn About Online Stock Trading
By: David Neehly
Traditionally, stock market games were only for people with money since only they could afford the fees of brokers who managed their stocks portfolio. However, with the advent of the Internet and online trading sites like Forex it is easier for the middle class individuals inclined towards business to invest in the stock market and reap some good benefits. Forex has made it possible for anyone to begin investing in stock market and earn money as a stock or currency trader.
However, it is the self-directed investors who can make the most of websites like Forex. It is not for the chicken-hearted. If you wish to invest you should be able to take some amount of risk. Forex is predominantly a currency trader, unlike other trading sites that trade in stocks. You get access to the foreign exchange market through an account that allows you to invest in one form of currency or another, and gain profits from the way currency values fluctuate.
Forex acts as a platform from where you can access the foreign exchange and make trades in the foreign currency market. It also helps you make wiser and better informed-decision through its various trade information and decision making tools. However, the point to be remembered here is that the website does not take any responsibility or liability for any losses you incur in the open market trading. Like most of the online trading website, Forex charges a commission or a flat rate for each transaction.
One of the tools available to users of Forex is the learning center. It is full of information about the foreign currency market. This section is written for people who are not familiar with the currency trade, and it is very helpful, as it explains how the market works and how to read the market.
Before you decide what to do you must learn how to watch the market, read quote board, understand the bid and ask and figure out the highs and lows of the market. These special tutorials add on to the knowledge you gain at the learning center and help you understand the working of Forex. This Forex trading section is a very good tool to understand the trends of trading in the foreign currency market.
Forex features a unique tool to get to know the foreign currency market and practice trading in it. The Forex website offers free practice account tool. Using this tool you can open a mock account stocked with practice money. You can read the quotes and the charts, and buy and sell. Then finally analyze your performance of how much money you made or lost. It is a good warm up before you actually foray into the market with actual money. It surely reduces the risk you would be taking.
Finally, it is very nice to have all of the charts and investing tools available on the Forex Web site. Once a member with an active account (which you can open with as little as $250), you have access to the advanced charts and tools offered by the site. Charts include real-time charting and research. Your Forex training will help you read the charts and make use of the research.
You can get direct access to the currency exchange market through Forex and also get some good tutorials on how to deal in the market and earn good money for a vacation or for retirement.
Traditionally, stock market games were only for people with money since only they could afford the fees of brokers who managed their stocks portfolio. However, with the advent of the Internet and online trading sites like Forex it is easier for the middle class individuals inclined towards business to invest in the stock market and reap some good benefits. Forex has made it possible for anyone to begin investing in stock market and earn money as a stock or currency trader.
However, it is the self-directed investors who can make the most of websites like Forex. It is not for the chicken-hearted. If you wish to invest you should be able to take some amount of risk. Forex is predominantly a currency trader, unlike other trading sites that trade in stocks. You get access to the foreign exchange market through an account that allows you to invest in one form of currency or another, and gain profits from the way currency values fluctuate.
Forex acts as a platform from where you can access the foreign exchange and make trades in the foreign currency market. It also helps you make wiser and better informed-decision through its various trade information and decision making tools. However, the point to be remembered here is that the website does not take any responsibility or liability for any losses you incur in the open market trading. Like most of the online trading website, Forex charges a commission or a flat rate for each transaction.
One of the tools available to users of Forex is the learning center. It is full of information about the foreign currency market. This section is written for people who are not familiar with the currency trade, and it is very helpful, as it explains how the market works and how to read the market.
Before you decide what to do you must learn how to watch the market, read quote board, understand the bid and ask and figure out the highs and lows of the market. These special tutorials add on to the knowledge you gain at the learning center and help you understand the working of Forex. This Forex trading section is a very good tool to understand the trends of trading in the foreign currency market.
Forex features a unique tool to get to know the foreign currency market and practice trading in it. The Forex website offers free practice account tool. Using this tool you can open a mock account stocked with practice money. You can read the quotes and the charts, and buy and sell. Then finally analyze your performance of how much money you made or lost. It is a good warm up before you actually foray into the market with actual money. It surely reduces the risk you would be taking.
Finally, it is very nice to have all of the charts and investing tools available on the Forex Web site. Once a member with an active account (which you can open with as little as $250), you have access to the advanced charts and tools offered by the site. Charts include real-time charting and research. Your Forex training will help you read the charts and make use of the research.
You can get direct access to the currency exchange market through Forex and also get some good tutorials on how to deal in the market and earn good money for a vacation or for retirement.
Tips For Profitable FOREX Trading
By: Susan Jan
FOREX trading appeals to many traders for several reasons other than its potential for profitable trading:
1. FOREX trading offers a 24-hour market so that any trader can take advantage of profitable market conditions at any time.
2. The FOREX market is the most liquid market in the world so that traders can enter or exit the market whenever they want with minimal execution barriers or risk and no daily trading limit.
3. The FOREX market is always a good market. FOREX trading involves selling or buying one currency against another. In essence, a bull market or a bear market for a currency is defined in terms of the outlook for value against other currencies. If the outlook is positive, you get a bull market where a trader profits by buying the currency against other currencies.
4. The FOREX market is so large and has so many participants that no single trader, even a central bank, can control the market price for an extended period of time.
To be successful in FOREX trading you need experience, capital and a solid trading system. Keeping things simple can also help you better focus on your trading. Here are some tips that can help you during FOREX trading:
1. The first and last ticks are always the most expensive. Get in late and out early.
2. Never add money when you are losing.
3. When everyone else is in, then it is time for you to get out.
4. Always determine a stop and a profit objective before you enter a trade. Place stops that are based on market information, and not your account balance.
5. It is always easier to enter a losing trade.
6. News is only important when the market doesn't react in the direction of the news.
7. In a bull market, you never want to sell a dull market, in a bear market, you should certainly never buy a dull market.
8. There are times, due to a lack of liquidity, or excessive volatility, when you should not trade at all.
9. It helps to read yesterday's paper each day to learn from what the market did.
10. There are at least three types of markets such as up trending, range bound, and down trading, and you should have a different trading strategy for each.
11. Up market and down market patterns are always there, with one always been more dominant. Select trades that move along with the trend.
FOREX trading appeals to many traders for several reasons other than its potential for profitable trading:
1. FOREX trading offers a 24-hour market so that any trader can take advantage of profitable market conditions at any time.
2. The FOREX market is the most liquid market in the world so that traders can enter or exit the market whenever they want with minimal execution barriers or risk and no daily trading limit.
3. The FOREX market is always a good market. FOREX trading involves selling or buying one currency against another. In essence, a bull market or a bear market for a currency is defined in terms of the outlook for value against other currencies. If the outlook is positive, you get a bull market where a trader profits by buying the currency against other currencies.
4. The FOREX market is so large and has so many participants that no single trader, even a central bank, can control the market price for an extended period of time.
To be successful in FOREX trading you need experience, capital and a solid trading system. Keeping things simple can also help you better focus on your trading. Here are some tips that can help you during FOREX trading:
1. The first and last ticks are always the most expensive. Get in late and out early.
2. Never add money when you are losing.
3. When everyone else is in, then it is time for you to get out.
4. Always determine a stop and a profit objective before you enter a trade. Place stops that are based on market information, and not your account balance.
5. It is always easier to enter a losing trade.
6. News is only important when the market doesn't react in the direction of the news.
7. In a bull market, you never want to sell a dull market, in a bear market, you should certainly never buy a dull market.
8. There are times, due to a lack of liquidity, or excessive volatility, when you should not trade at all.
9. It helps to read yesterday's paper each day to learn from what the market did.
10. There are at least three types of markets such as up trending, range bound, and down trading, and you should have a different trading strategy for each.
11. Up market and down market patterns are always there, with one always been more dominant. Select trades that move along with the trend.
Forex Markets - How Do These Work?
By: Michael Williams
There is so much talk about NASDAQ and NYSE, but how many people are aware of another similar market, called Forex Markets? Forex Market has ten times the average daily turnover of many similar global equity markets. Also, foreign exchange markets have thirty the times of the daily volume of NASDAQ and NYSE. Markets are also the most liquid market in the world with one of the highest turnovers ever recorded, estimated at $2 trillion in one day.
Foreign exchange markets, also known as FX or the foreign exchange is actually a decentralized market, commonly known as an Interbank or interdealer market. One of the main duties of FX Markets is to trade. Foreign banks, currency dealers and different Forex investors use the facility as a type of trading post. They use it to exchange foreign currencies, from all over the world. Of course for this to work in the best way, it has no centralized location. This is because all business is conducted online.
For a long time the main people that used Forex Markets were the banks. Recently though, FX Markets acquired the ability to leverage large positions with not very much available capital. This means that it is now a more liquid market and more easily accessible to smaller companies that would like to get involved as well.
From New Zealand, to Australia, to Asia, the Middle East, Europe and America, Forex Markets is open twenty-four hours a day. All the major markets, including London, New York, and Tokyo are part of it. Of course the United Kingdom and the United States account for over fifty percent of the turnover. When the time of day comes for all the major markets to overlap, trading can get pretty heavy.
Besides the major markets there are also five main currencies that are a part of Foreign exchange Markets. These currencies include the United States Dollar, the Euro, the Yen, the Franc and the British Pound. Each of these is traded in what are called pairs. In this particular market they are also called crosses, in what is known in the Forex Markets as the 'spot' market. A lot of this market is determined by supply and demand of certain major currencies and how they affect the current world market and its situations.
For those who have the money and the know how to survive on the world market, this market could be their best option. Being able to really read the current market and the world situation is definitely a plus when it comes to this market. If you have the need or the want to trade on the world market and are comfortable with what you know about it, Forex Markets are definitely the way to go.
There is so much talk about NASDAQ and NYSE, but how many people are aware of another similar market, called Forex Markets? Forex Market has ten times the average daily turnover of many similar global equity markets. Also, foreign exchange markets have thirty the times of the daily volume of NASDAQ and NYSE. Markets are also the most liquid market in the world with one of the highest turnovers ever recorded, estimated at $2 trillion in one day.
Foreign exchange markets, also known as FX or the foreign exchange is actually a decentralized market, commonly known as an Interbank or interdealer market. One of the main duties of FX Markets is to trade. Foreign banks, currency dealers and different Forex investors use the facility as a type of trading post. They use it to exchange foreign currencies, from all over the world. Of course for this to work in the best way, it has no centralized location. This is because all business is conducted online.
For a long time the main people that used Forex Markets were the banks. Recently though, FX Markets acquired the ability to leverage large positions with not very much available capital. This means that it is now a more liquid market and more easily accessible to smaller companies that would like to get involved as well.
From New Zealand, to Australia, to Asia, the Middle East, Europe and America, Forex Markets is open twenty-four hours a day. All the major markets, including London, New York, and Tokyo are part of it. Of course the United Kingdom and the United States account for over fifty percent of the turnover. When the time of day comes for all the major markets to overlap, trading can get pretty heavy.
Besides the major markets there are also five main currencies that are a part of Foreign exchange Markets. These currencies include the United States Dollar, the Euro, the Yen, the Franc and the British Pound. Each of these is traded in what are called pairs. In this particular market they are also called crosses, in what is known in the Forex Markets as the 'spot' market. A lot of this market is determined by supply and demand of certain major currencies and how they affect the current world market and its situations.
For those who have the money and the know how to survive on the world market, this market could be their best option. Being able to really read the current market and the world situation is definitely a plus when it comes to this market. If you have the need or the want to trade on the world market and are comfortable with what you know about it, Forex Markets are definitely the way to go.
Forex Exchange Rate - How Does It Get Calculated?
By: Michael Williams
In the Forex market the value of two separate currencies and how they relate to one another is what is known as the Forex exchange rate. Usually the Forex rate is how much of one currency is needed to buy a unit of another. Knowing the basics regarding the Forex exchange can help you get started in understanding it even better.
Just to give you an example of how the Foreign exchange rate can work and to help you better understands it we can compare the United States dollar with the Japanese yen. Let's say that on a certain day the US dollar is able to buy one hundred and ten Japanese yens, this would indicate that the exchange rate for that day is 1:110 or a one to one hundred and ten ratio. This ratio in the exchange rate is also known as pairing. When you take it vice versa you can use it to indicate how many US dollars a single unit of Japanese yen can buy. Another term that is used in the Foreign exchange rate is 'cross rates'. This term however is only used when it does not involve US dollars; it is only used when relating two foreign currencies.
A few other terms used in the Forex exchange are pips or basis points, which are actually two terms used for the same thing. These terms are used to indicate Forex rates that are calculated up to four decimal points and whether or not these are negative or positive movements. An example of this would be if you were to exchange euros with yen at a value of 135.1030, but then the euro rate goes up to 135.1035, it is called a five-pip improvement.
In using the Forex exchange rate you are required to use two currencies and this means they are quoted as 'two tier' rates. Also in the Forex market its price basis is called a bid/ask. Using the previous ratio between the yen and the US dollar in the Forex market, if this trade is made it is called a ten pip 'spread' and is secured. This term means it indicates the difference between the buying and actual selling price.
A lot of things can change the spread and affect it. These things include market conditions and traders' instincts about the strength of certain currencies, which can fluctuate greatly from day to day. One thing you should remember however when it comes to the Forex is that only Forex traders who are licensed can access official quoted rates. This means therefore that smaller investors may not receive their currency at a very good rate, because they usually receive them from commercial banks.
One last thing concerning the Forex exchange rate is that it is independently determined. This is why it thrives so well, because solely buyers and sellers and their supply and demand of certain currencies determine it. In the end individual governments and banks cannot decide the values.
With the benefits and knowledge of how the Forex exchange works you can decide if entering the Forex market is the right move for you. But with all the advantages of Forex, why wouldn't you want to?
In the Forex market the value of two separate currencies and how they relate to one another is what is known as the Forex exchange rate. Usually the Forex rate is how much of one currency is needed to buy a unit of another. Knowing the basics regarding the Forex exchange can help you get started in understanding it even better.
Just to give you an example of how the Foreign exchange rate can work and to help you better understands it we can compare the United States dollar with the Japanese yen. Let's say that on a certain day the US dollar is able to buy one hundred and ten Japanese yens, this would indicate that the exchange rate for that day is 1:110 or a one to one hundred and ten ratio. This ratio in the exchange rate is also known as pairing. When you take it vice versa you can use it to indicate how many US dollars a single unit of Japanese yen can buy. Another term that is used in the Foreign exchange rate is 'cross rates'. This term however is only used when it does not involve US dollars; it is only used when relating two foreign currencies.
A few other terms used in the Forex exchange are pips or basis points, which are actually two terms used for the same thing. These terms are used to indicate Forex rates that are calculated up to four decimal points and whether or not these are negative or positive movements. An example of this would be if you were to exchange euros with yen at a value of 135.1030, but then the euro rate goes up to 135.1035, it is called a five-pip improvement.
In using the Forex exchange rate you are required to use two currencies and this means they are quoted as 'two tier' rates. Also in the Forex market its price basis is called a bid/ask. Using the previous ratio between the yen and the US dollar in the Forex market, if this trade is made it is called a ten pip 'spread' and is secured. This term means it indicates the difference between the buying and actual selling price.
A lot of things can change the spread and affect it. These things include market conditions and traders' instincts about the strength of certain currencies, which can fluctuate greatly from day to day. One thing you should remember however when it comes to the Forex is that only Forex traders who are licensed can access official quoted rates. This means therefore that smaller investors may not receive their currency at a very good rate, because they usually receive them from commercial banks.
One last thing concerning the Forex exchange rate is that it is independently determined. This is why it thrives so well, because solely buyers and sellers and their supply and demand of certain currencies determine it. In the end individual governments and banks cannot decide the values.
With the benefits and knowledge of how the Forex exchange works you can decide if entering the Forex market is the right move for you. But with all the advantages of Forex, why wouldn't you want to?
Online Currency Trading and the FOREX Market
By:
Online currency trading takes on more than just a speculators or investors role in today's complex markets. If you are running a multi-company trading business, or even if you are 'just' a property investor, moving currencies around different exchanges at the right time can add quite a considerable amount to your bottom line.
As most property transactions are in many hundreds of thousands of dollars, a few points alteration on the exchange rate of the day could actually make or break the profitably of a deal.
However, many people regularly invest on the Foreign Exchange markets as a pure investment. Well, I say many, but actually FOREX is the largest market in the World, but it doesn't have an actual home.
There are a number of workshops available that are ideal if you're new to the Forex market and have some experience trading stocks or other products. Whether you're looking to diversify your portfolio, learn a new skill, or supplement your income, you'll find out if the Forex market is right for you. Have a look at forex.com for more information.
Online currency trading is all done through the Foreign Exchange or FOREX. It is the largest market in the world with about $1.9 trillion going into different hands everyday. Unlike all other financial markets on the planet, FOREX doesn't actually have an actual physical location.
That is because it is all done on the Internet and through banks with individuals trading their local currency for another. Or, if they have come back from a different country, then they might be changing from that currency into their home currency. Because FOREX is all based on the Internet, you can use online currency trading services to work within the market 24 hours a day.
But to be able to use the FOREX service, you have to sign yourself up to one of the many companies that offer these trading accounts to customers. You can open an account with any one of the hundreds of companies available; and then immediately begin trading currencies.
You will not want to use this service if you only exchange currency once a year, as you can do that at your local bank. Although this choice of account is available, large corporations mostly use online currency trading and they are the ones that will use this service the most.
However, in many cases, there are agencies available that you can sign up with ,that for a low percentage return will actually take care of all this for you.
For the really serious investor, there is a lot of money to be made, and often a lot of money held on risk. There is so much information that is now readily available, that with laptops and a wireless connection, anybody can trade basically anywhere in the world.
Also, on these online currency trading websites, you will get up to minute exchange rates from all over the world, so you will know the exact amount that you will get from your money. This also enables you to know the best time to use the online currency trading services. When the rates are just right for you, then that is when you can exchange your money.
However, it is important to note that some currency trading companies will need two days advance notice before you withdraw your money, so it is always wise to plan ahead if your goal is to make money with FOREX trading then use that money to pay bills or to pay for living expenses.
Have a look, you may well find that this is an interesting, and potentially, a very profitable new area of investing for you to look at.
Online currency trading takes on more than just a speculators or investors role in today's complex markets. If you are running a multi-company trading business, or even if you are 'just' a property investor, moving currencies around different exchanges at the right time can add quite a considerable amount to your bottom line.
As most property transactions are in many hundreds of thousands of dollars, a few points alteration on the exchange rate of the day could actually make or break the profitably of a deal.
However, many people regularly invest on the Foreign Exchange markets as a pure investment. Well, I say many, but actually FOREX is the largest market in the World, but it doesn't have an actual home.
There are a number of workshops available that are ideal if you're new to the Forex market and have some experience trading stocks or other products. Whether you're looking to diversify your portfolio, learn a new skill, or supplement your income, you'll find out if the Forex market is right for you. Have a look at forex.com for more information.
Online currency trading is all done through the Foreign Exchange or FOREX. It is the largest market in the world with about $1.9 trillion going into different hands everyday. Unlike all other financial markets on the planet, FOREX doesn't actually have an actual physical location.
That is because it is all done on the Internet and through banks with individuals trading their local currency for another. Or, if they have come back from a different country, then they might be changing from that currency into their home currency. Because FOREX is all based on the Internet, you can use online currency trading services to work within the market 24 hours a day.
But to be able to use the FOREX service, you have to sign yourself up to one of the many companies that offer these trading accounts to customers. You can open an account with any one of the hundreds of companies available; and then immediately begin trading currencies.
You will not want to use this service if you only exchange currency once a year, as you can do that at your local bank. Although this choice of account is available, large corporations mostly use online currency trading and they are the ones that will use this service the most.
However, in many cases, there are agencies available that you can sign up with ,that for a low percentage return will actually take care of all this for you.
For the really serious investor, there is a lot of money to be made, and often a lot of money held on risk. There is so much information that is now readily available, that with laptops and a wireless connection, anybody can trade basically anywhere in the world.
Also, on these online currency trading websites, you will get up to minute exchange rates from all over the world, so you will know the exact amount that you will get from your money. This also enables you to know the best time to use the online currency trading services. When the rates are just right for you, then that is when you can exchange your money.
However, it is important to note that some currency trading companies will need two days advance notice before you withdraw your money, so it is always wise to plan ahead if your goal is to make money with FOREX trading then use that money to pay bills or to pay for living expenses.
Have a look, you may well find that this is an interesting, and potentially, a very profitable new area of investing for you to look at.
Forex currency trading basics: what are you a bull or a bear
By: terryt
Forex currency trading is booming around the world and is quickly becoming the preferred choice of many online and offline investors, but what is Forex and how can you get involved in this attractive new investment arena.
First of all lets explain what Forex actual stands for and what it involves.
Forex stands for Foreign Exchange and is the trading of one currency value at a given time in relation to another currency value, so you are trading in the market of money or cash.
The Forex market is also known as the bull market or spot market.
Similar to trading stocks where you buy a particular stock at a given price and then anticipate the value of that stock increasing in value so you can realise a profit on your investment, traders in the Forex buy and sell units of currency.
A unit of currency that you intend to trade in is called a “lot” and is equivalent to $10,000 in a mini traders account and $100,000 in a standard or 100k account.
When trading currencies you are required to open an account with the Forex broker and make an initial deposit into what is called a margin account, this is because you do not actually pay instantly for the full cash value of your currency but do deals by use a leverage of multiplication on the money you invest.
Movement of a currency value is measured in units called pips, for instance if the value of the British Pound against the Dollar was 1.8720 and it moved in the Forex market to a value of 1.8721 this would be a one pip movement.
A mini traders account usually works on a leverage of 10 to 1, whereas a standard traders account works on a leverage of 100 to 1, meaning that on a mini traders account for each pip move on your currency lot either upwards or downwards you would be either making a $1 profit or losing a $1 off your account balance.
In a standard account this same one pip movement would be either making you a $10 profit or a $10 loss.
The mini traders account is ideally suited for new or novice traders who want to try the Forex market and see if its investment potential is suitable for them.
An interesting aspect of the Forex market is that not only can you buy a lot of currency expecting it to rise in value but you can also sell a lot of currency first with the belief that it may fall in value, and as such you can then buy the equivalent to close the trade and realise a profit.
It should be realised that dealing in the Forex market is an investment strategy and markets can move violently in either direction, this gives the opportunity to make money but conversely you should be aware that you could lose money without proper Forex trading education and preparing a strict and sensible strategy.
Forex currency trading is booming around the world and is quickly becoming the preferred choice of many online and offline investors, but what is Forex and how can you get involved in this attractive new investment arena.
First of all lets explain what Forex actual stands for and what it involves.
Forex stands for Foreign Exchange and is the trading of one currency value at a given time in relation to another currency value, so you are trading in the market of money or cash.
The Forex market is also known as the bull market or spot market.
Similar to trading stocks where you buy a particular stock at a given price and then anticipate the value of that stock increasing in value so you can realise a profit on your investment, traders in the Forex buy and sell units of currency.
A unit of currency that you intend to trade in is called a “lot” and is equivalent to $10,000 in a mini traders account and $100,000 in a standard or 100k account.
When trading currencies you are required to open an account with the Forex broker and make an initial deposit into what is called a margin account, this is because you do not actually pay instantly for the full cash value of your currency but do deals by use a leverage of multiplication on the money you invest.
Movement of a currency value is measured in units called pips, for instance if the value of the British Pound against the Dollar was 1.8720 and it moved in the Forex market to a value of 1.8721 this would be a one pip movement.
A mini traders account usually works on a leverage of 10 to 1, whereas a standard traders account works on a leverage of 100 to 1, meaning that on a mini traders account for each pip move on your currency lot either upwards or downwards you would be either making a $1 profit or losing a $1 off your account balance.
In a standard account this same one pip movement would be either making you a $10 profit or a $10 loss.
The mini traders account is ideally suited for new or novice traders who want to try the Forex market and see if its investment potential is suitable for them.
An interesting aspect of the Forex market is that not only can you buy a lot of currency expecting it to rise in value but you can also sell a lot of currency first with the belief that it may fall in value, and as such you can then buy the equivalent to close the trade and realise a profit.
It should be realised that dealing in the Forex market is an investment strategy and markets can move violently in either direction, this gives the opportunity to make money but conversely you should be aware that you could lose money without proper Forex trading education and preparing a strict and sensible strategy.
How To Choose a Forex Trading System That Works and Suits You
By: Bret Freak
There are so many different trading systems you could use to trade the forex market, some better suited to certain people than others. For example some people may find it easier to comprehend and take into account fundamental factors as opposed to looking at a screen covered in technical indicators, and vice-versa.
The first logical step in determining what type of trading system would best suit you is actually being aware and understand the widely known methods of analysis used in trading the currency market. Once you are aware of the tools that are available, you can generally tell what type of analysis suits you. For example some of the main technical analysis methods which are popular include:
• Pivot points
• Chart patterns
• Fibonacci retracements
• Candlestick patterns
And some fundamental factors which are widely used include analyzing:
• Interest rates
• Trade balances
• Unemployment rates
• Gross domestic product (GDP)
You may now actually be able to develop your own system by combining certain methods of analysis together, giving you a method which you are comfortable with. On the other hand you may decide that you would like to trade someone else’s system, either way, that brings us to the next step which is determining the profitability of a trading system.
Determining Profitability
Most people would think that back testing is the best way to determine a systems profitability. However back testing doesn’t always give you a true idea of how profitable a system is. The reason for this is because when you’re back testing your system on historical charts, you are only seeing the obvious setups which have occurred, and not always seeing the ones that are less obvious. These less obvious ones sometimes can produce losses, which is why back testing isn’t always the best method to implement.
A better method of determining profitability is by trading your system in real-time with a demo account. This would give you a true understanding of what your system is capable of. This would also allow you to familiarize yourself with your trading platform at the same time. When determining profitability you must look at it in terms of expectancy and opportunity.
Expectancy & Opportunity
These two factors together will be able to tell you what you could expect to make over a period of time. Expectancy is calculated with the following formula:
(Probability of winning × average win) – (Probability of losing × average loss)
This will give you a figure which is the average amount you can expect to make per trade. This shouldn’t be a negative amount, if it is you should look at some other method of trading since you cannot make money on a system that produces a negative expectancy. Obviously the higher this figure is the better. Now to the opportunity factor.
The opportunity factor is how often you are able to trade using your system. By multiplying your expectancy figure with your opportunity factor it will tell you how much you could expect to make over a period of time. The more opportunity you have to trade, the more money you should expect to make. This now brings us to the last component of a trading system, money management.
Money Management
Without proper money management you will end up as a statistic. In other words one of those 90%+ of traders who loose their money. Money management tells you how much of your account balance to risk per trade. The whole point of money management is to ensure your survival over the long term, and to preserve your capital.
The most common form of money management is the percent risk model which tells you not to risk more than x percent of your account balance on any one trade. A range between 1-3% is generally an accepted amount which has been a reliable percentage to use in order to make money in the long term.
Conclusion
By taking into consideration the above factors you will be able to determine if a trading system best suits you, and with some simple mathematical calculations you will be able to determine its profitability.
There are so many different trading systems you could use to trade the forex market, some better suited to certain people than others. For example some people may find it easier to comprehend and take into account fundamental factors as opposed to looking at a screen covered in technical indicators, and vice-versa.
The first logical step in determining what type of trading system would best suit you is actually being aware and understand the widely known methods of analysis used in trading the currency market. Once you are aware of the tools that are available, you can generally tell what type of analysis suits you. For example some of the main technical analysis methods which are popular include:
• Pivot points
• Chart patterns
• Fibonacci retracements
• Candlestick patterns
And some fundamental factors which are widely used include analyzing:
• Interest rates
• Trade balances
• Unemployment rates
• Gross domestic product (GDP)
You may now actually be able to develop your own system by combining certain methods of analysis together, giving you a method which you are comfortable with. On the other hand you may decide that you would like to trade someone else’s system, either way, that brings us to the next step which is determining the profitability of a trading system.
Determining Profitability
Most people would think that back testing is the best way to determine a systems profitability. However back testing doesn’t always give you a true idea of how profitable a system is. The reason for this is because when you’re back testing your system on historical charts, you are only seeing the obvious setups which have occurred, and not always seeing the ones that are less obvious. These less obvious ones sometimes can produce losses, which is why back testing isn’t always the best method to implement.
A better method of determining profitability is by trading your system in real-time with a demo account. This would give you a true understanding of what your system is capable of. This would also allow you to familiarize yourself with your trading platform at the same time. When determining profitability you must look at it in terms of expectancy and opportunity.
Expectancy & Opportunity
These two factors together will be able to tell you what you could expect to make over a period of time. Expectancy is calculated with the following formula:
(Probability of winning × average win) – (Probability of losing × average loss)
This will give you a figure which is the average amount you can expect to make per trade. This shouldn’t be a negative amount, if it is you should look at some other method of trading since you cannot make money on a system that produces a negative expectancy. Obviously the higher this figure is the better. Now to the opportunity factor.
The opportunity factor is how often you are able to trade using your system. By multiplying your expectancy figure with your opportunity factor it will tell you how much you could expect to make over a period of time. The more opportunity you have to trade, the more money you should expect to make. This now brings us to the last component of a trading system, money management.
Money Management
Without proper money management you will end up as a statistic. In other words one of those 90%+ of traders who loose their money. Money management tells you how much of your account balance to risk per trade. The whole point of money management is to ensure your survival over the long term, and to preserve your capital.
The most common form of money management is the percent risk model which tells you not to risk more than x percent of your account balance on any one trade. A range between 1-3% is generally an accepted amount which has been a reliable percentage to use in order to make money in the long term.
Conclusion
By taking into consideration the above factors you will be able to determine if a trading system best suits you, and with some simple mathematical calculations you will be able to determine its profitability.
Hedge trading on the forex currency market
By: terryt
Trading on the forex currency market can be a volatile yet exciting form of investment and certainly has the potential of bringing vast rewards if done so properly.
However it should be accepted that forex currency trading could also be a very risky investment as the market can swing both in an upward and downward movement in a split second depending on the market conditions.
Some people, and indeed institutions, try to control these volatile market swings by hedge trading their investments.
For instance it is possible with some forex trading systems to hold both a long and short position on a currency pair, which means that you have both bought a lot of currency with a view to profiting from the rise and the fall of a currency pair.
For example a currency pair could be the Great British Pound as related in value to the US Dollar or GBP/USD, and the rise in this market would be referred to as a long position as opposed to a fall in this currency market, which would be referred to as a short position.
In practice what this would mean is that either way the market moves you are gaining on one position while you lose the equivalent amount on the other position.
The net result of this on first sight would suggest that you cant particularly loss money but also you cant gain any money so how can this be of any particular use in an effort to successfully trade on the forex.
Well of course no money can be made until you close one of the positions, which would be the one that is losing money while leaving the other currency position open that is gaining profit to move further and gain you an overall profit.
You could for example close the losing position at a 20 pips loss and then close the profiting position at a 40 pips gain, giving you an overall profit of 20 pips.
Pips are the single value point movement of the currency and where the GBP/USD moves from 1.8800 to 1.8840 would be a 40 pips difference.
It should be remembered of course that a currency pair could well move in one direction and exceed your 20 pips level to close the position but then reverse in direction and never reach your targeted gain level of 40 pips so even hedge trading is not a guarantee of certain success.
The 20 pips loss level and 40 pips gain level are only used here as an example and if you use this method of trading you would be well advised to set your own levels that you feel are right and acceptable to your own currency trading experience and acceptable risk strategy.
All that can be said is that it does offer an alternative method of currency trading but should still be ventured into with predetermined loss limits and careful study of the currency market.
With most online forex currency trading sites a demo account can be opened first to help you experience what forex currency trading is all about and this is an ideal way to first get involved without any loss of real money.
Trading on the forex currency market can be a volatile yet exciting form of investment and certainly has the potential of bringing vast rewards if done so properly.
However it should be accepted that forex currency trading could also be a very risky investment as the market can swing both in an upward and downward movement in a split second depending on the market conditions.
Some people, and indeed institutions, try to control these volatile market swings by hedge trading their investments.
For instance it is possible with some forex trading systems to hold both a long and short position on a currency pair, which means that you have both bought a lot of currency with a view to profiting from the rise and the fall of a currency pair.
For example a currency pair could be the Great British Pound as related in value to the US Dollar or GBP/USD, and the rise in this market would be referred to as a long position as opposed to a fall in this currency market, which would be referred to as a short position.
In practice what this would mean is that either way the market moves you are gaining on one position while you lose the equivalent amount on the other position.
The net result of this on first sight would suggest that you cant particularly loss money but also you cant gain any money so how can this be of any particular use in an effort to successfully trade on the forex.
Well of course no money can be made until you close one of the positions, which would be the one that is losing money while leaving the other currency position open that is gaining profit to move further and gain you an overall profit.
You could for example close the losing position at a 20 pips loss and then close the profiting position at a 40 pips gain, giving you an overall profit of 20 pips.
Pips are the single value point movement of the currency and where the GBP/USD moves from 1.8800 to 1.8840 would be a 40 pips difference.
It should be remembered of course that a currency pair could well move in one direction and exceed your 20 pips level to close the position but then reverse in direction and never reach your targeted gain level of 40 pips so even hedge trading is not a guarantee of certain success.
The 20 pips loss level and 40 pips gain level are only used here as an example and if you use this method of trading you would be well advised to set your own levels that you feel are right and acceptable to your own currency trading experience and acceptable risk strategy.
All that can be said is that it does offer an alternative method of currency trading but should still be ventured into with predetermined loss limits and careful study of the currency market.
With most online forex currency trading sites a demo account can be opened first to help you experience what forex currency trading is all about and this is an ideal way to first get involved without any loss of real money.
How to choose a good quality forex broker
By: Bret Freak
How to choose a good quality forex broker
After you are confident in the way you will go about trading the forex market, along with the money management rules you will implement, it might be time to find a good forex broker.
There are many brokers out there to choose from so, it is worth while doing some initial research before choosing a forex broker. Some things to look out for when choosing a forex broker include:
Low Spreads
The spread is the main way forex brokers generate their profits. The spread is the difference between the price at which you can buy a currency, and the price at which it can be sold at any particular point in time. When looking for a broker, keep an eye out on their spread costs. The less the spread, the more money you will save and the faster you will be making a profit in a trade.
Quality registered institution
In the United States, forex brokers should be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) http://www.cftc.gov. They should also be a member of the National Futures Association. You can verify the brokers CFTC registration and NFA membership status at http://www.nfa.futures.org/basicnet/. If the broker is not backed up by a reliable institution, don’t bother with them it’s not worth the risk.
A wide range of leverage options
Leverage is needed to trade currencies due to the fact that price movements are only fractions of a cent. In general, leverage is expressed as a ratio between the amount of capital you provide to the amount a forex broker will lend you. For example, take the example of the ratio of 200:1. What this means is that the forex broker will lend you 200 times the amount of money you provide. Just keep in mind the more leverage you use, the more risk there is in getting a margin call, however you also have the potential for larger profits and vice-versa. In general, when starting out with a small amount of capital, make sure that the forex broker you are using offers a wide range of leverage options. This will give you more control over the risk exposure you should be prepared to take.
A wide range of tools
The majority of the larger forex brokers offer a range of trading tools to their clients. Most brokers can provide you with real-time currency prices along with other various tools. Ensure that your forex broker provides all the tools you need to trade successfully. Other tools could include:
•Real-time currency price charting
•Technical analysis tools
•Fundamental analysis
commentarEconomic calendars
The good forex brokers offer two or more types of accounts. For example the smallest account size is known as a mini account. Mini accounts require you to provide at least say $500, and with that you are offered a high amount of leverage. Leverage is required to profit from such small amounts of trading capital. Standard accounts also have a minimum capital requirement, usually somewhere between $1,000 and $2,000. In the end it’s important to choose a broker that has the right leverage and services that suit your needs to go with the amount of capital you have dedicated to trading the currency market.
Customer Support
Forex is a 24-hour market; therefore 24-hour support is essential. Can you contact the firm by phone, email, chat, etc? Do the customer support representatives seem to know what their on about? The quality of customer support can vary considerably from broker to broker, so be sure to check it out before opening an account.
One thing you could do is contact a number of forex brokers to get a feel of how quickly they can respond to enquiries. If they don’t respond quickly, and with a reasonable answer don’t give them your business.
Miscellaneous
It’s a good idea to talk to other forex traders in an effort to find out who are the better forex brokers out there. As in any industry or business, there are some dodgy ones. Forex brokers are no exception. There are many forums on the internet these days that are dedicated to discussing all areas of forex trading, including the discussion of forex brokers. These are great resources you can use allowing you to find some valuable information that could just save you being ripped off by some unscrupulous forex broker.
Conclusion
By taking the time and effort to do some initial research, you will be able to choose a reliable forex broker. This might just save you a lot of stress and troubles you may encounter if you were to choose any old forex broker.
How to choose a good quality forex broker
After you are confident in the way you will go about trading the forex market, along with the money management rules you will implement, it might be time to find a good forex broker.
There are many brokers out there to choose from so, it is worth while doing some initial research before choosing a forex broker. Some things to look out for when choosing a forex broker include:
Low Spreads
The spread is the main way forex brokers generate their profits. The spread is the difference between the price at which you can buy a currency, and the price at which it can be sold at any particular point in time. When looking for a broker, keep an eye out on their spread costs. The less the spread, the more money you will save and the faster you will be making a profit in a trade.
Quality registered institution
In the United States, forex brokers should be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) http://www.cftc.gov. They should also be a member of the National Futures Association. You can verify the brokers CFTC registration and NFA membership status at http://www.nfa.futures.org/basicnet/. If the broker is not backed up by a reliable institution, don’t bother with them it’s not worth the risk.
A wide range of leverage options
Leverage is needed to trade currencies due to the fact that price movements are only fractions of a cent. In general, leverage is expressed as a ratio between the amount of capital you provide to the amount a forex broker will lend you. For example, take the example of the ratio of 200:1. What this means is that the forex broker will lend you 200 times the amount of money you provide. Just keep in mind the more leverage you use, the more risk there is in getting a margin call, however you also have the potential for larger profits and vice-versa. In general, when starting out with a small amount of capital, make sure that the forex broker you are using offers a wide range of leverage options. This will give you more control over the risk exposure you should be prepared to take.
A wide range of tools
The majority of the larger forex brokers offer a range of trading tools to their clients. Most brokers can provide you with real-time currency prices along with other various tools. Ensure that your forex broker provides all the tools you need to trade successfully. Other tools could include:
•Real-time currency price charting
•Technical analysis tools
•Fundamental analysis
commentarEconomic calendars
The good forex brokers offer two or more types of accounts. For example the smallest account size is known as a mini account. Mini accounts require you to provide at least say $500, and with that you are offered a high amount of leverage. Leverage is required to profit from such small amounts of trading capital. Standard accounts also have a minimum capital requirement, usually somewhere between $1,000 and $2,000. In the end it’s important to choose a broker that has the right leverage and services that suit your needs to go with the amount of capital you have dedicated to trading the currency market.
Customer Support
Forex is a 24-hour market; therefore 24-hour support is essential. Can you contact the firm by phone, email, chat, etc? Do the customer support representatives seem to know what their on about? The quality of customer support can vary considerably from broker to broker, so be sure to check it out before opening an account.
One thing you could do is contact a number of forex brokers to get a feel of how quickly they can respond to enquiries. If they don’t respond quickly, and with a reasonable answer don’t give them your business.
Miscellaneous
It’s a good idea to talk to other forex traders in an effort to find out who are the better forex brokers out there. As in any industry or business, there are some dodgy ones. Forex brokers are no exception. There are many forums on the internet these days that are dedicated to discussing all areas of forex trading, including the discussion of forex brokers. These are great resources you can use allowing you to find some valuable information that could just save you being ripped off by some unscrupulous forex broker.
Conclusion
By taking the time and effort to do some initial research, you will be able to choose a reliable forex broker. This might just save you a lot of stress and troubles you may encounter if you were to choose any old forex broker.
Killer Forex Trading Strategy for Beginners
By: Chris Robertson
If you've just begun trading Forex, you probably want all the help you can get. Though Forex trading can be very lucrative, you'll want a Forex winning system that will work for you. There are several Forex killer systems available just as there are in marketing, sales, and other forms of business. You must find the Forex strategy that works for you, and develop good trading habits for long-term success. Here's a brief Forex winning guide for getting started.
Develop a Forex Trading System that You Can Stick With
Not only do you need a Forex strategy - you also need a system. You can have the best strategy in the world, but if you don't do it systematically, you could lose. Create a schedule of when you will do your Forex trading. Then, create a budget to manage your money coming in and going out. Just like operating any business, you'll have good and bad times. Stay with your Forex trading strategy through up-times and slumps for the best results.
Develop a Forex Trading Plan in Advance
Before the Forex market opens, you should already have a plan as to how you will trade. Don't get caught up in the moment. Carefully plan your investment as if you were making a big decision such as buying a home or a car. Even if the Forex trading amount seems small, treat it as if it were a million dollars. It could turn into that amount one day.
Expect Small Losses
If you plan to do Forex trading for the long haul, expect and accept small losses. They will occur no matter how well you know the market. A Forex winning system is one where you are prepared to accept the small losses in hopes of acquiring something greater in the future.
Be Patient
Remember, steady and slow is the key to any long-term Forex success. Don't sit staring at the quotes all day long! Take a break, enjoy life, and don't see a loss as the end of the world.
Avoid Forex Trading Strategies You Don't Understand
When developing a Forex winning strategy, avoid using methods you don't fully understand. Use helpful Forex guides and tutorials, but beware of Forex scams. There are many out there today - especially email scams. Be leery of companies who want to do your Forex trading for you. Develop a plan with the help of Forex experts, but please do your own trading or choose a reputable broker.
Develop an Exit Plan
Know when it's time to take your money and run! Don't hope for the best when all evidence points toward the worse. It's better to exit your trading with some of your money than to lose it all in a risky trade. Before you begin trading, set limits on how much you will invest - and stick with your limits.
Use this quick Forex guide to develop a strategy that works well for you. Forex trading doesn't have to be stressful. You can realize Forex trading success sooner than you think!
If you've just begun trading Forex, you probably want all the help you can get. Though Forex trading can be very lucrative, you'll want a Forex winning system that will work for you. There are several Forex killer systems available just as there are in marketing, sales, and other forms of business. You must find the Forex strategy that works for you, and develop good trading habits for long-term success. Here's a brief Forex winning guide for getting started.
Develop a Forex Trading System that You Can Stick With
Not only do you need a Forex strategy - you also need a system. You can have the best strategy in the world, but if you don't do it systematically, you could lose. Create a schedule of when you will do your Forex trading. Then, create a budget to manage your money coming in and going out. Just like operating any business, you'll have good and bad times. Stay with your Forex trading strategy through up-times and slumps for the best results.
Develop a Forex Trading Plan in Advance
Before the Forex market opens, you should already have a plan as to how you will trade. Don't get caught up in the moment. Carefully plan your investment as if you were making a big decision such as buying a home or a car. Even if the Forex trading amount seems small, treat it as if it were a million dollars. It could turn into that amount one day.
Expect Small Losses
If you plan to do Forex trading for the long haul, expect and accept small losses. They will occur no matter how well you know the market. A Forex winning system is one where you are prepared to accept the small losses in hopes of acquiring something greater in the future.
Be Patient
Remember, steady and slow is the key to any long-term Forex success. Don't sit staring at the quotes all day long! Take a break, enjoy life, and don't see a loss as the end of the world.
Avoid Forex Trading Strategies You Don't Understand
When developing a Forex winning strategy, avoid using methods you don't fully understand. Use helpful Forex guides and tutorials, but beware of Forex scams. There are many out there today - especially email scams. Be leery of companies who want to do your Forex trading for you. Develop a plan with the help of Forex experts, but please do your own trading or choose a reputable broker.
Develop an Exit Plan
Know when it's time to take your money and run! Don't hope for the best when all evidence points toward the worse. It's better to exit your trading with some of your money than to lose it all in a risky trade. Before you begin trading, set limits on how much you will invest - and stick with your limits.
Use this quick Forex guide to develop a strategy that works well for you. Forex trading doesn't have to be stressful. You can realize Forex trading success sooner than you think!
Using Fibonacci In Your Forex Trading System
By: Bret Freak
Fibonacci retracement analysis is a very widely known and used technical analysis tool, used by traders to mainly calculate possible targets for entry and exit points, and in determining potential levels of support and resistance. The thought behind Fibonacci retracements suggests that the price of whatever currency or market you’re observing will often retrace a certain percentage of a previous move, and find support or resistance at the main Fibonacci levels before continuing in its original direction.
What makes this particular indicator superior to most, is that it’s known as a ‘leading’ indicator, not lagging. In other words it has predictive powers, unlike other technical indicators that are informative of change in trend, after it has already occurred, fibonacci retracement levels show you possible turning points before they occur.
These levels are formed by drawing a trend line between two extreme levels (high & low) of a main market move, then dividing the vertical distance by the main Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8%, 78.6% and 100%.
The majority of good charting packages have the ability to do this automatically for you. For example in Metatrader, all you have to do is this: First you choose a main market move, select the Fibonacci button (the one that has a couple of horizontal lines on it, along with the letter “F”), hold your mouse button down, and drag the line from the bottom of the main move, to the most recent top (for uptrends). In market moves that are moving downwards you would apply the Fibonacci tool starting at the peak of the move. Metatrader then automatically draws in horizontal lines at the main Fibonacci retracement levels.
You may have heard of a famous trader by the name of William. D. Gann who implemented fibonacci levels in his trading, he also mentions them throughout his books and courses. Of all the levels he talked about, he put the greatest significance on the 50% retracement level. He even went as far as to saying: “you can make a fortune trading this one level alone”. (How to Make Profits in Commodities). Hearing this from such a widely known and very successful trader shouldn’t be taken lightheartedly. Although this book was about trading commodities, many traders use the same principals today, in markets around the world, including the forex market.
How can Fibonacci retracement levels be used?
So the question now is, can you trade forex based on Fibonacci levels alone? The fact is that it is very hard to determine at which Fibonacci retracement level prices will retrace. That’s why forex trading systems that use Fibonacci also incorporate the use of other indicators, or price action. For example, if you were to observe that two other indicators are indicating a reversal, while price is near the 61.8% retracement level, this may give you extra confidence that a change in trend is about to occur.
Or alternatively, you could observe a candlestick reversal pattern occurring at a key fibonacci retracement level. For example if a shooting star was formed at a 61.8% retracement level, this would indicate that prices have reached a natural resistance level, and price action is telling you it’s time for a reversal.
Conclusion
Just like pivot points, Fibonacci retracement levels can act as a very helpful guide in determining possible reversal points. But, keep in mind that this is just a tool, and shouldn’t be used alone. By combining the power of fibonacci retracement levels, along with your other technical tools, you should be able to develop a sound forex trading system and add confidence to execute a trade.
Fibonacci retracement analysis is a very widely known and used technical analysis tool, used by traders to mainly calculate possible targets for entry and exit points, and in determining potential levels of support and resistance. The thought behind Fibonacci retracements suggests that the price of whatever currency or market you’re observing will often retrace a certain percentage of a previous move, and find support or resistance at the main Fibonacci levels before continuing in its original direction.
What makes this particular indicator superior to most, is that it’s known as a ‘leading’ indicator, not lagging. In other words it has predictive powers, unlike other technical indicators that are informative of change in trend, after it has already occurred, fibonacci retracement levels show you possible turning points before they occur.
These levels are formed by drawing a trend line between two extreme levels (high & low) of a main market move, then dividing the vertical distance by the main Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8%, 78.6% and 100%.
The majority of good charting packages have the ability to do this automatically for you. For example in Metatrader, all you have to do is this: First you choose a main market move, select the Fibonacci button (the one that has a couple of horizontal lines on it, along with the letter “F”), hold your mouse button down, and drag the line from the bottom of the main move, to the most recent top (for uptrends). In market moves that are moving downwards you would apply the Fibonacci tool starting at the peak of the move. Metatrader then automatically draws in horizontal lines at the main Fibonacci retracement levels.
You may have heard of a famous trader by the name of William. D. Gann who implemented fibonacci levels in his trading, he also mentions them throughout his books and courses. Of all the levels he talked about, he put the greatest significance on the 50% retracement level. He even went as far as to saying: “you can make a fortune trading this one level alone”. (How to Make Profits in Commodities). Hearing this from such a widely known and very successful trader shouldn’t be taken lightheartedly. Although this book was about trading commodities, many traders use the same principals today, in markets around the world, including the forex market.
How can Fibonacci retracement levels be used?
So the question now is, can you trade forex based on Fibonacci levels alone? The fact is that it is very hard to determine at which Fibonacci retracement level prices will retrace. That’s why forex trading systems that use Fibonacci also incorporate the use of other indicators, or price action. For example, if you were to observe that two other indicators are indicating a reversal, while price is near the 61.8% retracement level, this may give you extra confidence that a change in trend is about to occur.
Or alternatively, you could observe a candlestick reversal pattern occurring at a key fibonacci retracement level. For example if a shooting star was formed at a 61.8% retracement level, this would indicate that prices have reached a natural resistance level, and price action is telling you it’s time for a reversal.
Conclusion
Just like pivot points, Fibonacci retracement levels can act as a very helpful guide in determining possible reversal points. But, keep in mind that this is just a tool, and shouldn’t be used alone. By combining the power of fibonacci retracement levels, along with your other technical tools, you should be able to develop a sound forex trading system and add confidence to execute a trade.
Forex Makes Online Currency Trading Easier Than Ever!
By: Belinda Kadar
Gone are the days when stock market was limited to the rich who paid brokers to manage their portfolios. Thanks to online investing, now there is a multitude of business savvy middle class individuals who indulge in the trading game. Web sites like Forex offer opportunities to nearly anyone to start investing in the stock market and earn money as a stock or currency trader.
Forex is not a place for the weak hearted ones. Only those who wish to take a certain degree of risk in order to earn big bucks must trade at Forex. It is a website used by the investors, mainly currency traders to play the game at the foreign exchange. You get access to the Foreign Exchange through an account from where you can invest in one form of currency or another whichever you feel is lucrative. In the process you make money off the currency values fluctuations.
While the main point of Forex is to allow access to the foreign currency market and allow you to make trades, the Web site does provide many tools to help you make better-informed decisions. That said, it is important to realize that trading Web sites will not take responsibility for losses, and most of them charge commission or charge a flat rate for each transaction.
Forex has a learning center for users. It provides exhaustive information about the foreign currency market. It is particularly useful for people who are not familiar with the currency trade. It helps them by explaining how the market works and how to read the market.
Another more advanced tool is the Forex trading section. This builds on the knowledge gained from the learning center and helps you learn specifically how to use Forex. In addition, Forex offers tools such as tutorials on how to read the quote board, how to understand bid and ask, and the method to figure out the high and low. The training is comprehensive enough to help you watch and understand the market trends and decide what to do.
Forex features a unique tool to get to know the foreign currency market and practice trading in it. The Forex website offers free practice account tool. Using this tool you can open a mock account stocked with practice money. You can read the quotes and the charts, and buy and sell. Then finally analyze your performance of how much money you made or lost. It is a good warm up before you actually foray into the market with actual money. It surely reduces the risk you would be taking.
The Forex website makes available all the charts and investing tools to the investor along with comprehensive real-time charting and research to get on with the investment process. The training tools at the Forex help you better understand and use the charts and the research. You can set up an account with Forex with amount as little as $250 in your account and once you become member of the website you get access to more advanced charts and tools to foray in the market.
If you are looking to learn how to trade better and earn money for a vacation, or even for retirement, you can do so with the help of Forex and its direct access to the currency exchange.
Gone are the days when stock market was limited to the rich who paid brokers to manage their portfolios. Thanks to online investing, now there is a multitude of business savvy middle class individuals who indulge in the trading game. Web sites like Forex offer opportunities to nearly anyone to start investing in the stock market and earn money as a stock or currency trader.
Forex is not a place for the weak hearted ones. Only those who wish to take a certain degree of risk in order to earn big bucks must trade at Forex. It is a website used by the investors, mainly currency traders to play the game at the foreign exchange. You get access to the Foreign Exchange through an account from where you can invest in one form of currency or another whichever you feel is lucrative. In the process you make money off the currency values fluctuations.
While the main point of Forex is to allow access to the foreign currency market and allow you to make trades, the Web site does provide many tools to help you make better-informed decisions. That said, it is important to realize that trading Web sites will not take responsibility for losses, and most of them charge commission or charge a flat rate for each transaction.
Forex has a learning center for users. It provides exhaustive information about the foreign currency market. It is particularly useful for people who are not familiar with the currency trade. It helps them by explaining how the market works and how to read the market.
Another more advanced tool is the Forex trading section. This builds on the knowledge gained from the learning center and helps you learn specifically how to use Forex. In addition, Forex offers tools such as tutorials on how to read the quote board, how to understand bid and ask, and the method to figure out the high and low. The training is comprehensive enough to help you watch and understand the market trends and decide what to do.
Forex features a unique tool to get to know the foreign currency market and practice trading in it. The Forex website offers free practice account tool. Using this tool you can open a mock account stocked with practice money. You can read the quotes and the charts, and buy and sell. Then finally analyze your performance of how much money you made or lost. It is a good warm up before you actually foray into the market with actual money. It surely reduces the risk you would be taking.
The Forex website makes available all the charts and investing tools to the investor along with comprehensive real-time charting and research to get on with the investment process. The training tools at the Forex help you better understand and use the charts and the research. You can set up an account with Forex with amount as little as $250 in your account and once you become member of the website you get access to more advanced charts and tools to foray in the market.
If you are looking to learn how to trade better and earn money for a vacation, or even for retirement, you can do so with the help of Forex and its direct access to the currency exchange.
Quality Forex training is the key to success.
By: Andrew Norman
Quality Forex training is the key to success for any budding Forex trader. But sometimes I think Forex training is too regulated then at other times I think that there isn't enough oversight. The reason that Forex training is so important and vital is because the Forex market is extremely competitive, volatile and fragile. Training is an essential step to become an experienced trader. Forex training is in demand as many people look for ways to profit from the currency trading marketplace.
Some things to consider when looking for free Forex training. Many websites offer a free demo account and free Forex trading System training. You can get free, live Forex training over the web from professional traders. Go to one of these websites and try a free practice account and learn how currency trading works.
Choosing which of the many Forex courses you want to take is not an easy task. There are literally hundreds of courses and materials out there for proper Forex training. Some training courses are specifically designed for home study use. But is it necessary for new Forex traders to study more about Forex trading courses or just join a Forex training program. The good news is that lots of courses will show you winning entry techniques and you should take the time to find and digest as many training courses as you can before you begin. Due to this fact, more and more people are either enrolling into FOREX courses or purchasing different kind of books regarding FOREX trading. Online education courses are a great way to learn and there are many to chose from on the internet today.
Without the proper preparation and expertise, a trader's chances of succeeding are reduced. With the correct training and mentoring a new trader can then intelligently develop a strategy that is suitable for him. Get to know the tools of the trade, as well as what will be expected of you to become a successful trader. If you'd like to learn how to become a successful Forex trader, consider a professional Forex mentoring course. With this kind of one on one assistance, a new trader can acquire and improve their necessary professional trading skills. With a little research, you can learn how to avoid common Forex trader mistakes and how to learn to move on. Have you heard the wise saying that a trader who fails to plan, plans to fail.
You may ask, “Do I have what it takes to be a currency trader” ask yourself do you have the drive and tenacity to succeed . I can tell you that as a well trained currency trader you can earn average profits of 5% to 25% or more per month. As a competent Forex trader you must study and understand daily foreign exchange rates. Becoming a successful trader will take work and a little stress, but the rewards are great. But I would say that fear and greed are, without a doubt, the enemies of the successful Forex trader and proper training is very important if you seriously want to get into the world of Forex trading.
So to sum it up quality Forex training is the key to success. The reason that Forex training is so important and vital is because the Forex market is extremely competitive, volatile and fragile. Forex training is essential to become an experienced trader. Forex training is very much in great demand as many people are looking for ways to profit from the currency trading marketplace. Training is widely available on the internet, including online courses, advanced trading workshops, books and more. If you search the internet you'll discover a lot of companies offering Forex training along with some great free Forex resources.
Quality Forex training is the key to success for any budding Forex trader. But sometimes I think Forex training is too regulated then at other times I think that there isn't enough oversight. The reason that Forex training is so important and vital is because the Forex market is extremely competitive, volatile and fragile. Training is an essential step to become an experienced trader. Forex training is in demand as many people look for ways to profit from the currency trading marketplace.
Some things to consider when looking for free Forex training. Many websites offer a free demo account and free Forex trading System training. You can get free, live Forex training over the web from professional traders. Go to one of these websites and try a free practice account and learn how currency trading works.
Choosing which of the many Forex courses you want to take is not an easy task. There are literally hundreds of courses and materials out there for proper Forex training. Some training courses are specifically designed for home study use. But is it necessary for new Forex traders to study more about Forex trading courses or just join a Forex training program. The good news is that lots of courses will show you winning entry techniques and you should take the time to find and digest as many training courses as you can before you begin. Due to this fact, more and more people are either enrolling into FOREX courses or purchasing different kind of books regarding FOREX trading. Online education courses are a great way to learn and there are many to chose from on the internet today.
Without the proper preparation and expertise, a trader's chances of succeeding are reduced. With the correct training and mentoring a new trader can then intelligently develop a strategy that is suitable for him. Get to know the tools of the trade, as well as what will be expected of you to become a successful trader. If you'd like to learn how to become a successful Forex trader, consider a professional Forex mentoring course. With this kind of one on one assistance, a new trader can acquire and improve their necessary professional trading skills. With a little research, you can learn how to avoid common Forex trader mistakes and how to learn to move on. Have you heard the wise saying that a trader who fails to plan, plans to fail.
You may ask, “Do I have what it takes to be a currency trader” ask yourself do you have the drive and tenacity to succeed . I can tell you that as a well trained currency trader you can earn average profits of 5% to 25% or more per month. As a competent Forex trader you must study and understand daily foreign exchange rates. Becoming a successful trader will take work and a little stress, but the rewards are great. But I would say that fear and greed are, without a doubt, the enemies of the successful Forex trader and proper training is very important if you seriously want to get into the world of Forex trading.
So to sum it up quality Forex training is the key to success. The reason that Forex training is so important and vital is because the Forex market is extremely competitive, volatile and fragile. Forex training is essential to become an experienced trader. Forex training is very much in great demand as many people are looking for ways to profit from the currency trading marketplace. Training is widely available on the internet, including online courses, advanced trading workshops, books and more. If you search the internet you'll discover a lot of companies offering Forex training along with some great free Forex resources.
Developing A Sound Forex Trading System
By: Bret Freak
Before going head first into trading the forex market, you may want to consider whether or not your forex trading system is actually based on sound concepts that will make you money over the long term. The most important aspect of your forex trading system should be the expectancy it produces. The expectancy of your trading system will give you an idea of how much you could expect to make over a certain period of time. This is explained further below.
Although you should aim at producing a high expectancy trading system, you should also consider exactly what your system is made up of. Most traders would agree that your trading system shouldn’t just be composed of mainly ’lagging’ technical indicators, but rather include ‘leading’ indicators such as price action, and chart patterns.
The Mathematics Of A Trading System
The whole point of a forex trading system is to make you as much profits as possible while keeping your risk down to an absolute minimum. To determine whether or not your trading system does this, a few mathematical calculations can be made to determine how much your system will make on average, over a period of time. This is often referred to as the ‘Expectancy’ of a system.
To calculate the expectancy of your trading system, you will need to take into account the following:
1. How often is your system correct? 2. How much are your profits compared to your losses? 3. How often are you able to trade your system? And 4) What does it cost to trade?
The following is an example taking these factors into account to determine its expectancy. Assuming the following:
1. The system is correct 70% of the time. 2) On average your profits are 2 times the amount you loose (make 80 pips, loose 40 – assume spread cost is taken into account). 3) you are able to trade 3 times per week.
The formula to calculate expectancy is:
(probability of a win × average win) less the (probability of a loss × average loss) × opportunity
Using the above values we would conclude:
(0.70 × 80 pips) minus (0.30 × 40 pips) × 3
= 132 pips. This means you could expect to make on average 132 pips every week.
Combining Leading & Lagging Indicators
So why include leading indicators in your trading system? The fact is, leading indicators have more predictive power, and can predict market moves before they occur. Lagging indicators cannot do this, however they can still complement other leading indicators. Some well known leading indicators include: pivot points, chart patterns, fibonacci retracements, and candlestick patterns.
In fact candlesticks are probably one of the most powerful leading indicators, since you are observing price action itself. Traders around the world have found that candlesticks can add an extra dimension to their trading system. The reason for this can be largely contributed to Steve Nison’s book Japanese Candlestick Charting Techniques. Here is a quote from the book:
“If you are a seasoned technician, you will discover how joining Japanese candlesticks with your other technical tools can create a powerful synergy of techniques.”
Of course there are many different ways you can incorporate the use of leading indicators in your forex trading system. Here I have aimed at giving you a taste of what is possible. I also recommend that you check out investopedia’s lesson on how to develop a medium term forex trading system. This lesson also puts forward some interesting concepts which include combining leading indicators with other technical tools.
Conclusion
By including the use of leading indicators in your trading system, you will be able to add an edge to your system that will enable you to catch trends earlier, and hence make more money. And by understanding the basic mathematics involved in determining a trading systems profitability, you should be able to determine whether or not you have a good forex trading system.
Before going head first into trading the forex market, you may want to consider whether or not your forex trading system is actually based on sound concepts that will make you money over the long term. The most important aspect of your forex trading system should be the expectancy it produces. The expectancy of your trading system will give you an idea of how much you could expect to make over a certain period of time. This is explained further below.
Although you should aim at producing a high expectancy trading system, you should also consider exactly what your system is made up of. Most traders would agree that your trading system shouldn’t just be composed of mainly ’lagging’ technical indicators, but rather include ‘leading’ indicators such as price action, and chart patterns.
The Mathematics Of A Trading System
The whole point of a forex trading system is to make you as much profits as possible while keeping your risk down to an absolute minimum. To determine whether or not your trading system does this, a few mathematical calculations can be made to determine how much your system will make on average, over a period of time. This is often referred to as the ‘Expectancy’ of a system.
To calculate the expectancy of your trading system, you will need to take into account the following:
1. How often is your system correct? 2. How much are your profits compared to your losses? 3. How often are you able to trade your system? And 4) What does it cost to trade?
The following is an example taking these factors into account to determine its expectancy. Assuming the following:
1. The system is correct 70% of the time. 2) On average your profits are 2 times the amount you loose (make 80 pips, loose 40 – assume spread cost is taken into account). 3) you are able to trade 3 times per week.
The formula to calculate expectancy is:
(probability of a win × average win) less the (probability of a loss × average loss) × opportunity
Using the above values we would conclude:
(0.70 × 80 pips) minus (0.30 × 40 pips) × 3
= 132 pips. This means you could expect to make on average 132 pips every week.
Combining Leading & Lagging Indicators
So why include leading indicators in your trading system? The fact is, leading indicators have more predictive power, and can predict market moves before they occur. Lagging indicators cannot do this, however they can still complement other leading indicators. Some well known leading indicators include: pivot points, chart patterns, fibonacci retracements, and candlestick patterns.
In fact candlesticks are probably one of the most powerful leading indicators, since you are observing price action itself. Traders around the world have found that candlesticks can add an extra dimension to their trading system. The reason for this can be largely contributed to Steve Nison’s book Japanese Candlestick Charting Techniques. Here is a quote from the book:
“If you are a seasoned technician, you will discover how joining Japanese candlesticks with your other technical tools can create a powerful synergy of techniques.”
Of course there are many different ways you can incorporate the use of leading indicators in your forex trading system. Here I have aimed at giving you a taste of what is possible. I also recommend that you check out investopedia’s lesson on how to develop a medium term forex trading system. This lesson also puts forward some interesting concepts which include combining leading indicators with other technical tools.
Conclusion
By including the use of leading indicators in your trading system, you will be able to add an edge to your system that will enable you to catch trends earlier, and hence make more money. And by understanding the basic mathematics involved in determining a trading systems profitability, you should be able to determine whether or not you have a good forex trading system.
Making Money Through Forex Trading
By: Kip Goldhammer
There is loads of cash to make from foreign currency trading. And people are earning huge profits from it all the time. Every fluctuation in the currency markets poses an opportunity to earn money for someone who has a good grasp on foreign currency trading. There are several factors that influence the currency markets and sometimes there are big events (e.g. introduction of euro) too.
The forex trading system involves buying and selling foreign currency. Unlike the stock market there is no fixed market for the forex trading system. A good and effective forex trading system allows the traders to transact easily and provide more chances to increase the earnings. Forex, foreign exchange market, is a market place where a currency of one country is sold for another country's currency for some profit. Currencies are traded in pares, like, US Dollar and Japanese Yen or US Dollar and Euro.
Foreign exchange tradings are a great money making opportunity for those who know their way around, for newbie it's a dream world where they either fall hard, sail well or fly high, its not easy to be a successful trader in the forex trading system., it's a mix of luck and experience that must work to find success. There are a lot of companies and individuals over the internet and offline willing to help you earn money from the forex trading system but only a handful of these are true and can actually help.
Nowadays most of the calculations are done by easy to use software that need minimum input from the user. You will need help initially, and may take some time for you to get to know the forex trading system. The high degree off leverage can sweep you either way, in the forex trading system one has to assess the risk for self, think of the chance one may have individually or with the help of a broker and/ or signal provider one may have and the amount which one can safely risk without putting yourself into financial trouble. It's a law of nature, where there's potential to earn there' potential to loose so just be prepared before you dive in.
To make good profits from foreign currency trading, you need to keep a close eye on the foreign currency markets. You need to do your own analysis of foreign currency trading and you need to know what other people are thinking about the emerging trends in foreign currency markets. You also need to keep track of the news items that could move the foreign currency markets. Each fluctuation presents an earning opportunity. You need to time your moves well. You need to develop strategies and execute them well.
There is loads of cash to make from foreign currency trading. And people are earning huge profits from it all the time. Every fluctuation in the currency markets poses an opportunity to earn money for someone who has a good grasp on foreign currency trading. There are several factors that influence the currency markets and sometimes there are big events (e.g. introduction of euro) too.
The forex trading system involves buying and selling foreign currency. Unlike the stock market there is no fixed market for the forex trading system. A good and effective forex trading system allows the traders to transact easily and provide more chances to increase the earnings. Forex, foreign exchange market, is a market place where a currency of one country is sold for another country's currency for some profit. Currencies are traded in pares, like, US Dollar and Japanese Yen or US Dollar and Euro.
Foreign exchange tradings are a great money making opportunity for those who know their way around, for newbie it's a dream world where they either fall hard, sail well or fly high, its not easy to be a successful trader in the forex trading system., it's a mix of luck and experience that must work to find success. There are a lot of companies and individuals over the internet and offline willing to help you earn money from the forex trading system but only a handful of these are true and can actually help.
Nowadays most of the calculations are done by easy to use software that need minimum input from the user. You will need help initially, and may take some time for you to get to know the forex trading system. The high degree off leverage can sweep you either way, in the forex trading system one has to assess the risk for self, think of the chance one may have individually or with the help of a broker and/ or signal provider one may have and the amount which one can safely risk without putting yourself into financial trouble. It's a law of nature, where there's potential to earn there' potential to loose so just be prepared before you dive in.
To make good profits from foreign currency trading, you need to keep a close eye on the foreign currency markets. You need to do your own analysis of foreign currency trading and you need to know what other people are thinking about the emerging trends in foreign currency markets. You also need to keep track of the news items that could move the foreign currency markets. Each fluctuation presents an earning opportunity. You need to time your moves well. You need to develop strategies and execute them well.
The Elliott Wave Principle And Hurst Envelope Analysis Support Chart Patterns
By: Bret Freak
Still wondering whether chart patterns are a valid form of analysis to trade the forex market? Well, just recently I have realized that both Elliott Wave, and. Hurst Envelope analysis support the validity of chart patterns, and even go as far to explaining why they occur! What’s interesting is the fact that both Elliott Wave & Hurst Envelope analysis are two very different analysis techniques, yet both explain exactly why these patterns continue to repeat time and time again.
Here is a quote from the Elliott Wave Principle on chart patterns:
“The Elliott Wave Principle not only supports the validity of chart analysis, but it can help the technician decide which formations are most likely of real significance” It goes onto explaining how chart patterns relate to Elliott Wave analysis and how you can use it in your trading.
And here is a quote from James Hurst’s book entitled: “Profit Magic of Stock Transaction Timing”
“If the “X” motivation concept is valid, it must be able to explain the existence and, reoccurrences of common chart patterns and, why they impart information to the investor.” And:
“The second purpose of the chapter is to show you how the price motion model can be used to resolve chart patterns. Such patterns can be used to determine which way and when price motion will go at pattern termination.”
Although the above may sound very confusing to those who haven’t read Hurst’s book, it’s still an interesting fact that the validity of chart patterns have been confirmed and supported by two very different market timing techniques. Now this brings us to another question: Can both Elliott Wave and Hurst Envelope analysis be somehow combined together to take chart analysis to a new level? Perhaps.
It’s not however my aim here to go into any details on how this may be achieved, but rather, allow those interested to follow up on this interesting idea themselves, and give those who are unsure if chart patterns are really a valid form of trading analysis, some confidence in their value in trading the forex market.
A Parting Comment:
Before you go out and buy a copy of Hurst’s book “Profit Magic of Stock Transaction Timing” I would like to warn you in advance that the content presented in this book can be at times hard to understand. And on top of this, the market timing technique Hurst presents in that book can be very time consuming. Since it involves manually drawing in “Envelopes” around price action. It is still however an interesting read, especially for those who are interested in how Hurst’s timing technique can be used to add accuracy to chart pattern recognition.
I believe the Majority of traders would be content on using the Elliott Wave Principle to further analyze chart patterns. Since it is more widely known than Hurst’s Envelope technique, and has more extensive information and education available on it than Hurst’s technique.
Conclusion
By understanding the Elliott Wave Principle, and Hurst Envelope analysis, you are able to take chart pattern recognition to a new level of accuracy, and therefore profitability. So, if you are the type of person who is interested in trading chart patterns more successfully you may be interested in doing some further research into Hurst Envelope analysis, and the Elliott Wave Principle.
Still wondering whether chart patterns are a valid form of analysis to trade the forex market? Well, just recently I have realized that both Elliott Wave, and. Hurst Envelope analysis support the validity of chart patterns, and even go as far to explaining why they occur! What’s interesting is the fact that both Elliott Wave & Hurst Envelope analysis are two very different analysis techniques, yet both explain exactly why these patterns continue to repeat time and time again.
Here is a quote from the Elliott Wave Principle on chart patterns:
“The Elliott Wave Principle not only supports the validity of chart analysis, but it can help the technician decide which formations are most likely of real significance” It goes onto explaining how chart patterns relate to Elliott Wave analysis and how you can use it in your trading.
And here is a quote from James Hurst’s book entitled: “Profit Magic of Stock Transaction Timing”
“If the “X” motivation concept is valid, it must be able to explain the existence and, reoccurrences of common chart patterns and, why they impart information to the investor.” And:
“The second purpose of the chapter is to show you how the price motion model can be used to resolve chart patterns. Such patterns can be used to determine which way and when price motion will go at pattern termination.”
Although the above may sound very confusing to those who haven’t read Hurst’s book, it’s still an interesting fact that the validity of chart patterns have been confirmed and supported by two very different market timing techniques. Now this brings us to another question: Can both Elliott Wave and Hurst Envelope analysis be somehow combined together to take chart analysis to a new level? Perhaps.
It’s not however my aim here to go into any details on how this may be achieved, but rather, allow those interested to follow up on this interesting idea themselves, and give those who are unsure if chart patterns are really a valid form of trading analysis, some confidence in their value in trading the forex market.
A Parting Comment:
Before you go out and buy a copy of Hurst’s book “Profit Magic of Stock Transaction Timing” I would like to warn you in advance that the content presented in this book can be at times hard to understand. And on top of this, the market timing technique Hurst presents in that book can be very time consuming. Since it involves manually drawing in “Envelopes” around price action. It is still however an interesting read, especially for those who are interested in how Hurst’s timing technique can be used to add accuracy to chart pattern recognition.
I believe the Majority of traders would be content on using the Elliott Wave Principle to further analyze chart patterns. Since it is more widely known than Hurst’s Envelope technique, and has more extensive information and education available on it than Hurst’s technique.
Conclusion
By understanding the Elliott Wave Principle, and Hurst Envelope analysis, you are able to take chart pattern recognition to a new level of accuracy, and therefore profitability. So, if you are the type of person who is interested in trading chart patterns more successfully you may be interested in doing some further research into Hurst Envelope analysis, and the Elliott Wave Principle.
Understanding Foreign Currency Pairs
By: Martin Chandra
Trading the forex market has many benefits over other financial markets, among the most important are: superior liquidity, 24hrs market, better execution, and others. Traders and investor see the forex market as a new speculation or diversifying opportunity because of these benefits.
Simply said, no other trading instrument comes even closely to forex market when it comes to liquidity, 24hr market environment and last but not the least, profit potential. Forex (currency) market is the largest (most liquid) financial market in the world, with an average daily volume of more than US$ 1.5 trillion, which is more than all of the global equity markets combined.
Foreign exchange market is where the currency of one nation is traded for that of another. Therefore, forex trading is always traded in pairs.
However, the way currencies are quoted against each other can initially seem a little confusing, especially for beginner. Basically, there are two rules of thumb - and three exceptions to the first rule.
Rule No. 1: All currency rate quotes are expressed as units per dollar. For example, the rate between the Japanesse yen (JPY) and the U.S. Dollar (USD) is expressed as 103.14 Japanese yen per dollar. The technical term for this is that USD is the "base currency" against which JPY is quoted.
A higher quote, such as 104.33, means that the dollar has appreciated in value compared to the yen, because it now takes more JPY to the same amount of USD. When charted, this means that a continuously stronger dollar will result in an uptrend on the chart. If you believe USD will continue to trend higher, which means JPY will trend lower, then you would sell JPY.
The exceptions to the first rule are the British poundsterling (GBP), European euro (EUR), and Australian dollar (AUD). These currencies are the base currencies against the USD. When rates between the USD and any of these currencies are charted, a continously stronger dollar will appear as a downtrend on the chary. If USD has appreciated relative to GBP from yesterday to today, today's quote between GBP and USD is lower than yesterday's quote. If you believe USD will continue to trend lower, and consequently GBP to trend higher, you should sell GBP.
Rule No. 2: All quote denominations are backwards with the base currency stated first. For example, the Swiss franc (CHF) and USD is denominated as USD/CHF. The quote between USD and EUR is denominated EUR/USD. Another example of denominations are USD/JPY, USD/CAD, GBP/USD, AUD/USD, etc.
Trading the forex market has many benefits over other financial markets, among the most important are: superior liquidity, 24hrs market, better execution, and others. Traders and investor see the forex market as a new speculation or diversifying opportunity because of these benefits.
Simply said, no other trading instrument comes even closely to forex market when it comes to liquidity, 24hr market environment and last but not the least, profit potential. Forex (currency) market is the largest (most liquid) financial market in the world, with an average daily volume of more than US$ 1.5 trillion, which is more than all of the global equity markets combined.
Foreign exchange market is where the currency of one nation is traded for that of another. Therefore, forex trading is always traded in pairs.
However, the way currencies are quoted against each other can initially seem a little confusing, especially for beginner. Basically, there are two rules of thumb - and three exceptions to the first rule.
Rule No. 1: All currency rate quotes are expressed as units per dollar. For example, the rate between the Japanesse yen (JPY) and the U.S. Dollar (USD) is expressed as 103.14 Japanese yen per dollar. The technical term for this is that USD is the "base currency" against which JPY is quoted.
A higher quote, such as 104.33, means that the dollar has appreciated in value compared to the yen, because it now takes more JPY to the same amount of USD. When charted, this means that a continuously stronger dollar will result in an uptrend on the chart. If you believe USD will continue to trend higher, which means JPY will trend lower, then you would sell JPY.
The exceptions to the first rule are the British poundsterling (GBP), European euro (EUR), and Australian dollar (AUD). These currencies are the base currencies against the USD. When rates between the USD and any of these currencies are charted, a continously stronger dollar will appear as a downtrend on the chary. If USD has appreciated relative to GBP from yesterday to today, today's quote between GBP and USD is lower than yesterday's quote. If you believe USD will continue to trend lower, and consequently GBP to trend higher, you should sell GBP.
Rule No. 2: All quote denominations are backwards with the base currency stated first. For example, the Swiss franc (CHF) and USD is denominated as USD/CHF. The quote between USD and EUR is denominated EUR/USD. Another example of denominations are USD/JPY, USD/CAD, GBP/USD, AUD/USD, etc.
Forex Currency Trading System Possibilities
By: Bret Freak
So many people continue to discuss the use of common technical indicators in trading systems, without realizing or perhaps just not bothering to look at more predictive trading tools that are available to trade the forex market.
And so the purpose of this article is to present to you a few alternatives to using lagging indicators and instead incorporate leading indicators in your system, and that means looking directly at price action which some refer to as trading naked.
What I’m about to explain here, is a number of analysis techniques which I have combined together giving you an idea of what is possible. Now just because I have combined the use of all four market timing techniques in this article, doesn’t mean you have to use them together in your trading system, rather incorporate the use of one or more of these tools in your own forex trading system to suit yourself.
The first thing to do, is to identify a main market move, then apply fibonacci retracement levels to that move. These fibonacci resistance levels will now act as a reference point. We will now refer to other tools to indicate a possible reversal around one of these resistance levels.
We now wait for a candlestick reversal signal to occur around one of the main fibonacci resistance levels to indicate a possible reversal trend. When you think about it, fibonacci and candlestick reversal patterns are a great combination of analysis tools to use. Think about it for a moment. Once you observe a natural level of resistance in the form of a fibonacci, and at the same time you notice a candlestick reversal signal occurring aroung this level, for example a shooting star pattern, it gives you added confidence that a change in trend to the downside may be about to occur.
This brings me to our third indicator which gives further indication of a reversal occuring. This third analysis technique is called Elliott Wave. Now it is not my purpose here to go into detail about the Elliott Wave Principle, but rather show you the possibility of the tools you could use in your forex trading system.
To give you an idea of what Elliott Wave is all about, I quote from the Elliott Wave Principle book:
“In the 1930’s, Ralph Nelson Elliott discovered that stock market prices trend and reverse in recognizable patterns, the patterns he discovered are repetitive in form but not necessarily in time of amplitude. Elliott isolated five such patterns or waves that recur in market data. He named, defined, and illustrated these patterns and their variations. He then described how they link together to form larger variations. He then described how they in turn link to form the same patterns of the next larger size and soon producing structured progression.”
And further on into the book it goes onto saying:
“The primary value of the wave principle is that it provides a context for market analysis.”
And that is exactly how you should use it in your own forex trading system, in context with your other indicators or tools such as Fibonacci retracements, and candlestick reversal patterns.
Now to the fourth and final market timing technique you could incorporate in your forex trading system, or use with the other technical tools I have presented here in this article. This last market timing technique is called the Delta Phenomenon. More information about this technique and all the others presented here in this article can be found on my website listed below.
Basically the Delta Phenomenon is a cyclic phenomenon that was observed to be common in all financial markets around the world. Here is a quote from the book:
“Once one discovers the number of points that repeat and where the repeat begins, he is able to predict where in time each of these points will occur as far in the future or the past as he may want to go.”
The interesting thing here is the fact that this sounds similar to the paragraph I read out of the Elliott Wave Principle book which stated that, Elliott Wave patterns are repetitive in form but not necessarily in time or amplitude. This is where the Delta Phenomenon could complement EW, since DP gives you an idea of the time period to expect a reversal.
I would also like to mention here that the delta phenomenon is one of those market timing techniques that can be incorporated with any trading system, and it’s definitely worth looking into further if you’re interested in increasing both profitability and accuracy in your forex trading system.
Conclusion
It is up to you which market timing techniques you choose to use in your trading system.
However you should be able to add an extra layer of both confidence and accuracy, by incorporating the use of any of these four market timing techniques in your own forex trading system.
So many people continue to discuss the use of common technical indicators in trading systems, without realizing or perhaps just not bothering to look at more predictive trading tools that are available to trade the forex market.
And so the purpose of this article is to present to you a few alternatives to using lagging indicators and instead incorporate leading indicators in your system, and that means looking directly at price action which some refer to as trading naked.
What I’m about to explain here, is a number of analysis techniques which I have combined together giving you an idea of what is possible. Now just because I have combined the use of all four market timing techniques in this article, doesn’t mean you have to use them together in your trading system, rather incorporate the use of one or more of these tools in your own forex trading system to suit yourself.
The first thing to do, is to identify a main market move, then apply fibonacci retracement levels to that move. These fibonacci resistance levels will now act as a reference point. We will now refer to other tools to indicate a possible reversal around one of these resistance levels.
We now wait for a candlestick reversal signal to occur around one of the main fibonacci resistance levels to indicate a possible reversal trend. When you think about it, fibonacci and candlestick reversal patterns are a great combination of analysis tools to use. Think about it for a moment. Once you observe a natural level of resistance in the form of a fibonacci, and at the same time you notice a candlestick reversal signal occurring aroung this level, for example a shooting star pattern, it gives you added confidence that a change in trend to the downside may be about to occur.
This brings me to our third indicator which gives further indication of a reversal occuring. This third analysis technique is called Elliott Wave. Now it is not my purpose here to go into detail about the Elliott Wave Principle, but rather show you the possibility of the tools you could use in your forex trading system.
To give you an idea of what Elliott Wave is all about, I quote from the Elliott Wave Principle book:
“In the 1930’s, Ralph Nelson Elliott discovered that stock market prices trend and reverse in recognizable patterns, the patterns he discovered are repetitive in form but not necessarily in time of amplitude. Elliott isolated five such patterns or waves that recur in market data. He named, defined, and illustrated these patterns and their variations. He then described how they link together to form larger variations. He then described how they in turn link to form the same patterns of the next larger size and soon producing structured progression.”
And further on into the book it goes onto saying:
“The primary value of the wave principle is that it provides a context for market analysis.”
And that is exactly how you should use it in your own forex trading system, in context with your other indicators or tools such as Fibonacci retracements, and candlestick reversal patterns.
Now to the fourth and final market timing technique you could incorporate in your forex trading system, or use with the other technical tools I have presented here in this article. This last market timing technique is called the Delta Phenomenon. More information about this technique and all the others presented here in this article can be found on my website listed below.
Basically the Delta Phenomenon is a cyclic phenomenon that was observed to be common in all financial markets around the world. Here is a quote from the book:
“Once one discovers the number of points that repeat and where the repeat begins, he is able to predict where in time each of these points will occur as far in the future or the past as he may want to go.”
The interesting thing here is the fact that this sounds similar to the paragraph I read out of the Elliott Wave Principle book which stated that, Elliott Wave patterns are repetitive in form but not necessarily in time or amplitude. This is where the Delta Phenomenon could complement EW, since DP gives you an idea of the time period to expect a reversal.
I would also like to mention here that the delta phenomenon is one of those market timing techniques that can be incorporated with any trading system, and it’s definitely worth looking into further if you’re interested in increasing both profitability and accuracy in your forex trading system.
Conclusion
It is up to you which market timing techniques you choose to use in your trading system.
However you should be able to add an extra layer of both confidence and accuracy, by incorporating the use of any of these four market timing techniques in your own forex trading system.
Elliott Wave Principle
By: Bret Freak
The chances are, you have probably heard of the Elliott Wave Principle, however without spending some time to carefully study this market timing technique, it can be a difficult principle to understand and apply. The Elliott Wave concept is a very interesting method of identifying cycles in the financial markets. Keeping in mind that it is not yet fully understood exactly why it works, this hasn’t stopped traders around the world from applying and profiting from this unique principle.
The Elliott wave principle or wave principle as some refer to it is a form of market timing that traders and investors use to forecast possible trends in the financial markets. Ralph Nelson Elliott developed a financial market model which he called The Wave Principle. Ralph published his views and ideas of how the market behaved in his book titled: The Wave Principle (1938). Elliott suggested that market movements unfold in specific patterns which he called waves. Today practitioners and traders refer to this principle as the Elliott Wave.
The best place to learn about the Elliott wave principle absolutely *FREE* is the Elliott Wave International website. I also suggest you get the Elliott Wave Principle book by Frost and Prechter, it only costs $29.00 USD plus shipping if you get it from Elliott Wave International, which is a small investment compared to what the Elliott Wave Principle is capable of achieving when used correctly.
To give you an idea as to what to expect from the book, here are some quotes from the Elliott Wave Principle Key to Market Behavior by A.J. Frost and Robert R. Jr. Prechter
“In this book, we have tried to produce a work that gives a complete treatment of the subject in a manner which we hope will succeed in introducing both experienced analysts and interested laymen to the fascinating field of Elliott. We trust our readers will be encouraged to do their own research by keeping a chart of hourly fluctuations of the Dow until they can say with enthusiasm, “I see it!” Once you grasp the Wave Principle, you will have at your command a new and fascinating approach to market analysis, and even beyond that, a mathematical philosophy that can be applied in other spheres of life. It will not be the answer to all your problems, but it will give you perspective and at the same time enable you to appreciate the strange psychology of human behavior, especially market behavior. Elliott’s concepts reflect a principle you can readily prove to yourself and evermore see the stock market in a new light.”
“In the 1930s, Ralph Nelson Elliott discovered that stock market prices trend and reverse in recognizable patterns. The patterns he discerned are repetitive in form but not necessarily in time or amplitude. Elliott isolated five such patterns, or “waves,” that recur in market price data. He named, defined and illustrated these patterns and their variations. He then described how they link together to form larger versions of themselves how they in turn link to form the same patterns of the next larger size, and so on, producing a structured progression. He called this phenomenon The Wave Principle.”
And further on down the page it goes on to say:
“The primary value of the Wave Principle is that it provides a context for market analysis.”
And:
“At times, its accuracy in identifying, and even anticipating, changes in direction is almost unbelievable.”
(Quotes taken from the Elliott Wave Principle Key to Market Behavior by A.J. Frost and Robert R. Jr. Prechter)
Conclusion
The Elliott Wave Principle is definitely a viable method of market timing. However as stated in the Elliott Wave Principle book, it should be used “In context” with your other technical tools. So consider the added accuracy and profitability that can be added to your own trading system with the help of the Elliott Wave Principle.
The chances are, you have probably heard of the Elliott Wave Principle, however without spending some time to carefully study this market timing technique, it can be a difficult principle to understand and apply. The Elliott Wave concept is a very interesting method of identifying cycles in the financial markets. Keeping in mind that it is not yet fully understood exactly why it works, this hasn’t stopped traders around the world from applying and profiting from this unique principle.
The Elliott wave principle or wave principle as some refer to it is a form of market timing that traders and investors use to forecast possible trends in the financial markets. Ralph Nelson Elliott developed a financial market model which he called The Wave Principle. Ralph published his views and ideas of how the market behaved in his book titled: The Wave Principle (1938). Elliott suggested that market movements unfold in specific patterns which he called waves. Today practitioners and traders refer to this principle as the Elliott Wave.
The best place to learn about the Elliott wave principle absolutely *FREE* is the Elliott Wave International website. I also suggest you get the Elliott Wave Principle book by Frost and Prechter, it only costs $29.00 USD plus shipping if you get it from Elliott Wave International, which is a small investment compared to what the Elliott Wave Principle is capable of achieving when used correctly.
To give you an idea as to what to expect from the book, here are some quotes from the Elliott Wave Principle Key to Market Behavior by A.J. Frost and Robert R. Jr. Prechter
“In this book, we have tried to produce a work that gives a complete treatment of the subject in a manner which we hope will succeed in introducing both experienced analysts and interested laymen to the fascinating field of Elliott. We trust our readers will be encouraged to do their own research by keeping a chart of hourly fluctuations of the Dow until they can say with enthusiasm, “I see it!” Once you grasp the Wave Principle, you will have at your command a new and fascinating approach to market analysis, and even beyond that, a mathematical philosophy that can be applied in other spheres of life. It will not be the answer to all your problems, but it will give you perspective and at the same time enable you to appreciate the strange psychology of human behavior, especially market behavior. Elliott’s concepts reflect a principle you can readily prove to yourself and evermore see the stock market in a new light.”
“In the 1930s, Ralph Nelson Elliott discovered that stock market prices trend and reverse in recognizable patterns. The patterns he discerned are repetitive in form but not necessarily in time or amplitude. Elliott isolated five such patterns, or “waves,” that recur in market price data. He named, defined and illustrated these patterns and their variations. He then described how they link together to form larger versions of themselves how they in turn link to form the same patterns of the next larger size, and so on, producing a structured progression. He called this phenomenon The Wave Principle.”
And further on down the page it goes on to say:
“The primary value of the Wave Principle is that it provides a context for market analysis.”
And:
“At times, its accuracy in identifying, and even anticipating, changes in direction is almost unbelievable.”
(Quotes taken from the Elliott Wave Principle Key to Market Behavior by A.J. Frost and Robert R. Jr. Prechter)
Conclusion
The Elliott Wave Principle is definitely a viable method of market timing. However as stated in the Elliott Wave Principle book, it should be used “In context” with your other technical tools. So consider the added accuracy and profitability that can be added to your own trading system with the help of the Elliott Wave Principle.
How does the Forex market work?
By: Andrew Daigle
The forex market is a huge international exchange where different currencies are traded, i.e. both bought and sold. It is estimated to be the largest financial market in the world, and is not governed by the rules of any one country. In addition to this, while it is open from Sunday to Friday, it is a 24 hour market and does not experience a daily closing like a traditional stock market. It is, thus, not regulated and there are no international panels to settle disputes nor are there any clearing houses to stand as guarantors of trades on the exchange. There is nothing more binding than a credit agreement between the buyer and seller in the forex market, and it works.
While this seems very nebulous to most stock market investors, forex traders are forced by competition and the need for cooperation to remain honest. There is no way for a trader to survive in the forex market unless he or she keeps up their end of the deal. Most countries will have their own body or association that serve to regulate the forex traders or brokers in that country and ensure that clients' rights are protected. This association will insist on its members accepting the decisions of their arbitration panel in case of disputes. In the United States, this organization is generally considered to be the National Futures Association or the NFA.
Another important aspect of the forex market to keep in mind is that on the market itself, there are no commissions, and thus it works on principal amount only. The so called forex brokers make money not by taking a commission from the trading parties, but by facilitating the trade itself and making their bit on the bid ask spread, i.e. the difference between the selling and buying prices. The implication is that they are not brokers in the traditional sense of the word, but more like forex traders themselves.
The single most attractive aspect of the forex market is that it is practically impossible for any investor, group of investors or financial institutions to misuse it. It is such a large market, with money flowing through it daily in estimated trillions of dollars, that no single entity, however large, can gain a statistically significant control over the forex market. This means that it is completely free of any influences, beyond the true fundamental driving forces that move it. The implication here is that this market offers every investor the same opportunity, regardless of size or influence, making it a free and fair market place, possibly the only one in the world. This aspect is very attractive to small investors in particular, since they are often the ones to suffer the most from stock market scams and fraudulent activity.
While these factors make the forex market more appealing to invest money on, it is also hard to make money on this market due to the fact that the forex trader has to always do better than the bid ask spread, which makes the opportunities for arbitrage profit limited. However, with no extra commissions and charges, the forex trader is left to enjoy every last bit of profit that he or she does make, once they are past the bid ask spread mark. Overall, the forex market is the place for a smart, vigilant and well trained investor.
The forex market is a huge international exchange where different currencies are traded, i.e. both bought and sold. It is estimated to be the largest financial market in the world, and is not governed by the rules of any one country. In addition to this, while it is open from Sunday to Friday, it is a 24 hour market and does not experience a daily closing like a traditional stock market. It is, thus, not regulated and there are no international panels to settle disputes nor are there any clearing houses to stand as guarantors of trades on the exchange. There is nothing more binding than a credit agreement between the buyer and seller in the forex market, and it works.
While this seems very nebulous to most stock market investors, forex traders are forced by competition and the need for cooperation to remain honest. There is no way for a trader to survive in the forex market unless he or she keeps up their end of the deal. Most countries will have their own body or association that serve to regulate the forex traders or brokers in that country and ensure that clients' rights are protected. This association will insist on its members accepting the decisions of their arbitration panel in case of disputes. In the United States, this organization is generally considered to be the National Futures Association or the NFA.
Another important aspect of the forex market to keep in mind is that on the market itself, there are no commissions, and thus it works on principal amount only. The so called forex brokers make money not by taking a commission from the trading parties, but by facilitating the trade itself and making their bit on the bid ask spread, i.e. the difference between the selling and buying prices. The implication is that they are not brokers in the traditional sense of the word, but more like forex traders themselves.
The single most attractive aspect of the forex market is that it is practically impossible for any investor, group of investors or financial institutions to misuse it. It is such a large market, with money flowing through it daily in estimated trillions of dollars, that no single entity, however large, can gain a statistically significant control over the forex market. This means that it is completely free of any influences, beyond the true fundamental driving forces that move it. The implication here is that this market offers every investor the same opportunity, regardless of size or influence, making it a free and fair market place, possibly the only one in the world. This aspect is very attractive to small investors in particular, since they are often the ones to suffer the most from stock market scams and fraudulent activity.
While these factors make the forex market more appealing to invest money on, it is also hard to make money on this market due to the fact that the forex trader has to always do better than the bid ask spread, which makes the opportunities for arbitrage profit limited. However, with no extra commissions and charges, the forex trader is left to enjoy every last bit of profit that he or she does make, once they are past the bid ask spread mark. Overall, the forex market is the place for a smart, vigilant and well trained investor.
Is Forex Trading for Everyone?
By: David Stevenson
Successfully trading the Forex market requires you to have the discipline to follow some rules. If you can "stay the course" and follow your system, regardless of what the market is doing, you can make money trading Forex.
As with most forms of financial investing - stocks, futures, etc., there are risks. There are no crystal balls to show you what is going to happen next, so your exposure to these risks is largely controlled by your money management practices.
Casinos operate, normally with extensive profits, based entirely on risk management. They have learned how to take advantage of probability, which is the same concept traders rely upon, and turn the tables in their favor. They have learned that the longer they can keep a gambler in their facility, the better the odds they will end up with the gambler's money.
Many new or inexperienced Forex traders fall victim to the hype surrounding foreign exchange trading. The electronic trading platforms used by retail Forex traders today, with their ability to display hundreds of "indicators" and present price data instantly, confuse many traders and actually lure them into making poor trading decisions.
Like futures, Forex trading offers high leverage. The readily available leverage of up to 400:1 has destroyed many potential trading careers. New traders, unaccustomed to the volatile nature of Forex, often fall into the trap of over-leveraged positions, which easily wipe out trading accounts.
Forex generally has some of the most predictable trends of all the markets over the longer term. However, many traders lose sight of the long term picture and try to trade based upon shorter term price charts. They believe shorter trends offer easy opportunities for profit, when in truth, most seasoned traders won't even look at charts of less than 1 hour.
The volatility of Forex means that a tight stop-loss order will usually result in being stopped-out of many trades. Too many trades ending in this fashion result in your trading account being slowly eroded away. Traders need to keep their "real leverage" (amount of currency controlled divided by their actual account size) at 3:1 or less. This will allow you to relax your stop-loss settings and enjoy more successful trades.
In the currency market, you don't have to worry (normally) about countries going broke. Typically the prices move in large waves, and if you had deep enough pockets, you could wait for the price to recover to profitable levels. The reality is this process could take years, so money management is again key.
Another benefit of this huge market is it's liquid nature. It's trading volume of approximately 2 trillion dollars per day ensure there can be no insider activities. Even the largest of central banks lack sufficient funds to seriously sway the market. Market moving data is released for all to see at the same time. No one has advance information of pending releases.
In conclusion, trading the Forex currency market is no more difficult than the stocks or futures markets and in fact has several advantages. To trade profitably in the currency market, you need to stick to leverage of no more than 3% to 5% and think "longer term". The lower leverage will allow you to ride the fluctuations which are common to Forex, while enjoying the benefits of long term trending.
Successfully trading the Forex market requires you to have the discipline to follow some rules. If you can "stay the course" and follow your system, regardless of what the market is doing, you can make money trading Forex.
As with most forms of financial investing - stocks, futures, etc., there are risks. There are no crystal balls to show you what is going to happen next, so your exposure to these risks is largely controlled by your money management practices.
Casinos operate, normally with extensive profits, based entirely on risk management. They have learned how to take advantage of probability, which is the same concept traders rely upon, and turn the tables in their favor. They have learned that the longer they can keep a gambler in their facility, the better the odds they will end up with the gambler's money.
Many new or inexperienced Forex traders fall victim to the hype surrounding foreign exchange trading. The electronic trading platforms used by retail Forex traders today, with their ability to display hundreds of "indicators" and present price data instantly, confuse many traders and actually lure them into making poor trading decisions.
Like futures, Forex trading offers high leverage. The readily available leverage of up to 400:1 has destroyed many potential trading careers. New traders, unaccustomed to the volatile nature of Forex, often fall into the trap of over-leveraged positions, which easily wipe out trading accounts.
Forex generally has some of the most predictable trends of all the markets over the longer term. However, many traders lose sight of the long term picture and try to trade based upon shorter term price charts. They believe shorter trends offer easy opportunities for profit, when in truth, most seasoned traders won't even look at charts of less than 1 hour.
The volatility of Forex means that a tight stop-loss order will usually result in being stopped-out of many trades. Too many trades ending in this fashion result in your trading account being slowly eroded away. Traders need to keep their "real leverage" (amount of currency controlled divided by their actual account size) at 3:1 or less. This will allow you to relax your stop-loss settings and enjoy more successful trades.
In the currency market, you don't have to worry (normally) about countries going broke. Typically the prices move in large waves, and if you had deep enough pockets, you could wait for the price to recover to profitable levels. The reality is this process could take years, so money management is again key.
Another benefit of this huge market is it's liquid nature. It's trading volume of approximately 2 trillion dollars per day ensure there can be no insider activities. Even the largest of central banks lack sufficient funds to seriously sway the market. Market moving data is released for all to see at the same time. No one has advance information of pending releases.
In conclusion, trading the Forex currency market is no more difficult than the stocks or futures markets and in fact has several advantages. To trade profitably in the currency market, you need to stick to leverage of no more than 3% to 5% and think "longer term". The lower leverage will allow you to ride the fluctuations which are common to Forex, while enjoying the benefits of long term trending.
10 Forex Trading Essentials
By: David Stevenson
These 10 Forex trading essentials are a high-level peek at the pitfalls that catch many traders. Compare your trading style with these simple fixes and if you are not employing some or all of them, you are placing yourself at a higher risk level.
1) Increase your time perspective - If you are not a well seasoned Forex trader, you shouldn't even look at a price chart of less than 60 minutes. The randomness of the normal transactions which occur in Forex will distort your judgment of the true picture. Use longer time frames, such as 60 minute, 4 hour and daily charts when planning your trades.
2) Reduce your position size to 5% Maximum - Having more than 3 to 5 percent of your trading capital on the table is a major no no. High leverage makes it very easy to get in away over your head. This combination snares many traders and can rapidly destroy your account. You need to have the ability to ride the volatility waves common in Forex.
3) Give your trade time to work - You can only use this option effectively if your position is sized safely... as per 2) above. Prices will fluctuate dramatically in Forex, and you need to be sure that a loss really is a loss before you close a trade that is moving against your plan. A 30 pip stop loss will often kick you out of a trade, just as it's about to turn in your direction. You need to allow for larger price swings... if you have determined the major price trend, be patient and let the odds work in your favor.
4) Reduce your dependence on technical indicators - Due to the fact that technical indicators get their data from past events, the reality is they have no ability to predict the future. Pro's that enjoy success using these indicators, often profit from the knowledge of how the masses are likely to react to this data, rather than the information itself. You need to determine the major trend (a simple moving average will show you this) and hop aboard. Use a longer time frame, as in 1). The largest players in Forex rely about 25% on technical indicators when making their trading decisions.
5) Trade only one or two currency pairs - And stick to the majors... not the crosses. Currency prices are driven primarily by fundamental data. In order to anticipate what is likely coming down the road, you need to follow some basic data for each of the countries involved. Trading too many currencies will make it difficult to keep up to date. There is equal opportunity to profit from each of the pairs, so wait until your experience level has matured and the information tends to sink in without as much effort on your part before you start to trade more currencies.
6) Average in and out of your trades - If your trading account is less than $50,000 have your broker enable mini-lots for your account. This will allow you to average in and out of your trades... a great way to add more flexibility to your account. If this applies to you and your broker doesn't offer mini lots, find a new broker... this is an important need to do.
7) Follow the data for your currency pair(s) - Know what data is pending for release. Volatility often increases dramatically when these releases occur. The safe strategy is to exit your positions prior to major releases... this is the way many of the larger accounts handle these situations. Data releases can often cause a change to the trend. Take them seriously.
8) Determine the trend and get aboard - As with any type of trading, the safest bet is to determine which way prices are trending, and then trade in that direction. You don't need anything fancy... a simple moving average on your candlestick chart is sufficient. Zoom your chart out to be sure you have the big picture. Compare where the price is now, relative to where is has been for a significant amount of time (at least a month). Use caution if the current price is near upper or lower extremes, as there may be a trend change once that extreme is reached.
9) Know when to take a profit - A winning position can quickly turn into a loser if you set your sights too high. Don't be afraid to take your profit - or a part of your profit at 20 or 30 pips. The price waves in Forex make it ideally suited to averaging into and out of positions by using multiple entry and exit points for each position. This is exactly where your mini lots can help! The benefit of spreading out your position is that your overall risk is reduced.
10) Stop listening to "Gurus" - Don't fall into the trap of believing everything, or even most things, you hear. The trading world is overflowing with gurus only too willing to offer their opinion on the future. It will only be an opinion, nothing more. They may seem to have convincing data, but trust your own brain. You need to weigh the economic data from your countries... that is what drives currency prices. The enormous size and nature of Forex ensure there is no insider information. You have access to the same data as everyone else in the game. In time, your own instinct will guide you to your goals, and that is what you need to trust.
These 10 Forex trading essentials are a high-level peek at the pitfalls that catch many traders. Compare your trading style with these simple fixes and if you are not employing some or all of them, you are placing yourself at a higher risk level.
1) Increase your time perspective - If you are not a well seasoned Forex trader, you shouldn't even look at a price chart of less than 60 minutes. The randomness of the normal transactions which occur in Forex will distort your judgment of the true picture. Use longer time frames, such as 60 minute, 4 hour and daily charts when planning your trades.
2) Reduce your position size to 5% Maximum - Having more than 3 to 5 percent of your trading capital on the table is a major no no. High leverage makes it very easy to get in away over your head. This combination snares many traders and can rapidly destroy your account. You need to have the ability to ride the volatility waves common in Forex.
3) Give your trade time to work - You can only use this option effectively if your position is sized safely... as per 2) above. Prices will fluctuate dramatically in Forex, and you need to be sure that a loss really is a loss before you close a trade that is moving against your plan. A 30 pip stop loss will often kick you out of a trade, just as it's about to turn in your direction. You need to allow for larger price swings... if you have determined the major price trend, be patient and let the odds work in your favor.
4) Reduce your dependence on technical indicators - Due to the fact that technical indicators get their data from past events, the reality is they have no ability to predict the future. Pro's that enjoy success using these indicators, often profit from the knowledge of how the masses are likely to react to this data, rather than the information itself. You need to determine the major trend (a simple moving average will show you this) and hop aboard. Use a longer time frame, as in 1). The largest players in Forex rely about 25% on technical indicators when making their trading decisions.
5) Trade only one or two currency pairs - And stick to the majors... not the crosses. Currency prices are driven primarily by fundamental data. In order to anticipate what is likely coming down the road, you need to follow some basic data for each of the countries involved. Trading too many currencies will make it difficult to keep up to date. There is equal opportunity to profit from each of the pairs, so wait until your experience level has matured and the information tends to sink in without as much effort on your part before you start to trade more currencies.
6) Average in and out of your trades - If your trading account is less than $50,000 have your broker enable mini-lots for your account. This will allow you to average in and out of your trades... a great way to add more flexibility to your account. If this applies to you and your broker doesn't offer mini lots, find a new broker... this is an important need to do.
7) Follow the data for your currency pair(s) - Know what data is pending for release. Volatility often increases dramatically when these releases occur. The safe strategy is to exit your positions prior to major releases... this is the way many of the larger accounts handle these situations. Data releases can often cause a change to the trend. Take them seriously.
8) Determine the trend and get aboard - As with any type of trading, the safest bet is to determine which way prices are trending, and then trade in that direction. You don't need anything fancy... a simple moving average on your candlestick chart is sufficient. Zoom your chart out to be sure you have the big picture. Compare where the price is now, relative to where is has been for a significant amount of time (at least a month). Use caution if the current price is near upper or lower extremes, as there may be a trend change once that extreme is reached.
9) Know when to take a profit - A winning position can quickly turn into a loser if you set your sights too high. Don't be afraid to take your profit - or a part of your profit at 20 or 30 pips. The price waves in Forex make it ideally suited to averaging into and out of positions by using multiple entry and exit points for each position. This is exactly where your mini lots can help! The benefit of spreading out your position is that your overall risk is reduced.
10) Stop listening to "Gurus" - Don't fall into the trap of believing everything, or even most things, you hear. The trading world is overflowing with gurus only too willing to offer their opinion on the future. It will only be an opinion, nothing more. They may seem to have convincing data, but trust your own brain. You need to weigh the economic data from your countries... that is what drives currency prices. The enormous size and nature of Forex ensure there is no insider information. You have access to the same data as everyone else in the game. In time, your own instinct will guide you to your goals, and that is what you need to trust.
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