This article is for anyone who wants to learn FOREX trading with the view to making big profits. It’s a well-known fact that anyone can learn FOREX trading - but very few traders make big profits. Here we are going to show you how to learn the basics and apply them with the right mindset to succeed. The Six Steps: 1. Attitude Firstly, it’s a well-known fact that the traders who make the money, approach FOREX trading with the attitude they will do what it takes to succeed. This means they don’t listen to guru’s or read tip sheets - they do it for themselves. Too many novice traders think they can follow someone else and be successful - but the only person who can give you success is you! 2. Method If you are going to trade FOREX, you need a method - and this does not involve day trading - it involves long term trend following. The big currency trends last for months or years - and your aim is to lock into these currency trends, and make big profits. The best way to catch these long-term trends is to use a breakout method - this is a PROVEN way to make money, and breakout methods form the basis of many top-trading systems. Good software is available form such vendors as Omni trader, Trade station, and Supercharts – any of these programs will allow you to test a method, and then when you’re confident, trade it. 3. Discipline By developing a method you are confident in, means that you will be apply to apply it to the markets - and stick with it, even through loosing periods. Most traders who follow gurus and tip sheets can’t do this – and as they haven’t developed a method themselves, they soon throw in the towel and discipline goes out the window. 4. Knowledge You can learn a breakout method very quickly - but you still need to overcome the psychological pitfalls of trading. Read some books that focus on this area - some of the best include: · Jack Schwager’s Market Wizards and New Market Wizards · Edwin Le Feurve’s Remisenences of a Stock Operator Also, any books by: Jake Bernstein and Larry Williams. These books are motivational, and will keep you focused on the your task. Trading is all about applying a trading system with discipline - and these books will help you achieve this. 5. Taking a Risk When learning FOREX trading, most traders try and restrict risk above all else. However, they do it to such a degree, that they end up taking losses as they get stopped out the market. In many instances, the direction they chose was right – but they just didn’t give the trade enough room on the downside. If you want to make big money by FOREX trading, keep in mind that with risk goes reward. Taking calculated risks is quite different from being rash - you simply need to wait for the right opportunity, and have the courage of your conviction. 6. Trade in Isolation Trade in isolation to stay focused - keep in mind that if you are subject to the opinions and views of others, which may differ from your own - it will put you off. The fact that you may be doing trades no one else may agree with, is good - Why? Simply, because 90% of traders lose - so the mass opinion is not the one to follow. Learn FOREX Trading If you want to learn FOREX trading, and make big money - you can do it. The proof is an experiment over two weeks, with a group of novice traders. These traders were nicknamed the “turtles” – and they went on to become some of the most famous traders of all time. If you want to learn FOREX trading, don’t fall into the trap of believing that you can follow someone else. Get the knowledge - and then take responsibility for your own financial success. You will then be doing what 90% of traders don’t do - and you can then enter the elite 10% of traders who pile up huge profits consistently. New! A valuable FREE Currency Trader CD containing 9 critical trading reports, tips, strategies and currency trading info. Visit our web site now and grab your CD http://www.tradercurrencies.com. Article Source: http://EzineArticles.com/?expert=Stephen_Todd
Tuesday, September 1, 2009
Learn FOREX Trading in 6 Simple Steps
Mini Forex Trading, The Way To Go When You Start Trading
Once you have entered the world of Forex trading you will immediately find this field is not just about entering trades into your broker’s trading station, but mainly about becoming profitable, as often as possible, with those many trades you enter and think will be the good ones. The only way you can reach your goal of becoming a profitable currency trader is by finding the best sources to learn forex trading and with practice. Lots and lots of practice will make you an expert on the currency markets and a highly profitable trader. You can start practicing with a paper trading account, which is highly recommended, and this will give you the feeling of what a real trading account is as you gain the knowledge and skills you need and without the constant fear of losing your money in a bad move you may make. Once you have been profitable with a paper trading account the next natural step would be to open a mini forex trading account, this time with real money. But even considering you are risking real money this time, it would be just a few dollars on the table that will be at risk; and of course, on the positive side, you will have the chance of gaining real money from your trading skills, which at the end is the ultimate goal of all traders. The following are the main characteristics a mini Forex account would have: - Minimum required account deposit (it can vary from broker to broker) = $300 Contrary to what you may be tempted to think, there is no downside to trading a Forex mini account compared to a regular account. Apart from the lot sizes, you will be enjoying all the benefits that full-size forex account holders enjoy; including, same state-of-the art trading software from your broker, charts, resources, and tools. This mini accounts are ideal for a new Forex trader to develop a disciplined, rational forex trading strategy and technique without excessively focusing on the fear naturally arising from thinking too much about how much you can lose in a bad trade. One more great new for the starting trader is that there is no maximum trade volume when you use a mini forex trading account. Although the standard trade size is 10,000 units, you are not limited to trading one lot. For instance, you can trade 10,000 units or even 200,000 units. This way as you become more seasoned and build up your confidence you can slowly increase the size of your positions to maximize profits. This ability to customize the size of the trade will allow you to have a better risk management of your money as you build the skills the will make you think about opening a full-size regular trading account. Adrian Pablo is a Forex freelance writer with articles published in a number of places. Get a free report on Fibonacci Trading and learn more about the world of forex trading , visit: Article Source: http://EzineArticles.com/?expert=Adrian_Pablo
- Recommended required account deposit = $2,000
- Traded in 10,000-unit currency lots
- Default Margin: set at 0.5% ($50 per mini-lot)
- Leverage up to = 200:1
Forex Trading Education And A Successful Trading Career
Everyday more and more people decide to enter the world of Forex Trading with the high expectations of having an income source that will allow them to work from anywhere in the world they may choose to live, to maintain and even improve their current life style and get all this without being attached to a cubicle and fixed schedule traditional job. The forex markets are easily accessible these days thanks to the wide spread use of the internet around the world and the great number of brokers letting you place trades commission free and with narrow spreads. This means the profitability of forex trading is potentially very high and accessible to any one, but in order to reach that profitable stage you must first learn the ropes of forex trading, this is, you need an education. For example you must learn what a “pips” are. If you have been interested in forex for a while, at this stage you may have heard or read already how many pips a day you can make using a particular trading system. You can learn what they are with this quick explanation. In short, currency pairs prices will go out to 4 significant digits. For example; if one currency pair is trading for 1.3451 then an increase to 1.3452 would be a “one-pip” increase in the price of this particular currency. This is an increase of one hundredth of a percent of the value of the currency pair you are trading. And depending the type of account you have, regular or mini, each pip will have a value of $10 or $1. So if you make 10 pips a day with a regular account you would have made $100 and with a mini-account $10. So now you have an idea of what a pip is. Other of the basic concepts you must understand are those of buying and selling. Buying refers to the acquisition of a particular currency pair to open a trade, it’s quite straight to understand. Selling short refers to the selling of a particular currency to open a trade. When you Buy, you are expecting the price of the currency pair to increase with time, i.e., you buy cheap to sell high. In the case of Selling short, it looks a bit more complicated for many new traders. Here the way to make money is to initially sell a currency pair that you think will lose value in a given period of time and then, once it happened, you will buy it back at the new price but now you can sell it at the previous greater price the currency had when you opened the trade, so you earn the difference in prices. I know it seems kind of tricky, but once you are in front of your trading station, that by the way is given you free of charge by most forex brokers, it will look much simpler. These are only a few basic concepts but there are many more things out there you must learn in order to have a good forex trading education and become a profitable trader. In short, knowledge is the key to making money in the currency markets. Adrian Pablo is a Forex freelance writer with articles published in a number of places. Get a free report on Fibonacci Trading and learn more about the world of forex trading , visit: Article Source: http://EzineArticles.com/?expert=Adrian_Pablo
Fx Trading -A Wonderful Income Opportunity For Internet Marketers
Most internet marketers and online entrepreneurs shy away from trading fx trading- or forex trading. This aversion is not so much a natural trend among online entrepreneurs, but rather stems from a lack of information on the benefits that are in line with their nature of work online as internet marketers. Consider this huge benefit: The forex market never sleeps! The online marketer has the benefit of time on his hands, and the ability to refer to online charts to monitor price movements of currency pairs that they are trading. Therefore, an online entrepreneur can trade at any time that he choses. It will be suitable for the person who wants to trade part time, or in fact, at any time! Another reason, why internet marketers shy away from trading forex as an income source is one of "fear." Consider the many sad stories of people who have lost it all in the stock markets, especially in day trading. It is because the security of a sustained income for most internet marketers is foremost in their minds. With this type of mindset, internet marketers are apt to avoid trading the forex which they perceive as even more dangerous than the stock markets. This fear is in fact exagggerated. This is because in forex, you can trade a currency pair and that reduces the risk or danger of ruin. In fact, this is by far the most exciting advantage of FX trading- and that is the abilityto generate profits whether a currency pair is 'up' or 'down'. A trader can profit by taking a 'long' position, (buying the currency pair at one price and selling it later at a higher price), or a 'short' position, (selling the currency pair and buying it back at a lower price). As long as the trader picks the right direction, a potential for profit always exists. One more misconception among internet marketers that proves to be an obstacle to them being involved in forex trading is that of capital. Many believe they require a huge sum of money to trade the forex. The truth is that you can start off in a small way, and you can even start off with zero capital, because you can begin trading on a trade simulator, to gain experience and then you can start small and build up your profits into a massive capital base. Considering these factors, forex trading can become a good alternative income source for internet marketers and in fact, for anyone who is prepared to study and learn and master the trade. Specially for the internet marketer who has been neglecting forex trading as a possible income source, you can fast start into trading forex and to create a 5 figure income trading forex. For more details, visit the author's website http://www.forextrading-platform.blogspot.com Article Source: http://EzineArticles.com/?expert=Peter_Lim
Demo Accounts - One Of The Best Ways To Get Started In Forex
One of the best ways to check out Forex trading and see if it is truly something that you like and feel that you can make money in is to open a Forex demo account. This strategy allows you to view the account online and see how the account would perform if it were a real account. It's kind of like how the military plays war games where they can test strategies without losing any soldiers. In the same way, you can use a demo account to make "pretend" purchases and sells just as if you were really doing them. Through the wonders of modern technology, the software used for these accounts brings realism to the account and shows whether you would have profited or lost at the end of your trading day. Here's a closer look at how this method works. Let's say that you start with an imaginary amount of five thousand dollars in your demo margin account. After watching the news reports closely and studying the currency markets, you think the U.S. dollar will increase in value versus the Yen. Since your margin account allows you to buy at a ten to one margin you buy (theoretically) fifty thousand worth of USD and sell fifty thousand dollars worth of the Yen. The difference between the two called the spread is what gives you your profit. So why would someone want to have a demo account instead of just jumping right in? It's quite simple really; it makes it easier and less stressful to learn the strategies and techniques without risking real money. It's like playing with Monopoly money! Why do you think pilots are trained in flight simulators instead of real airplanes before they are allowed to get at the controls of an actual aircraft? I can't think of anyone who would want to attempt to fly a plane without spending quite a bit of time in a flight simulator first, can you? Look at learning Forex trading the same way. You wouldn't want to risk your money on something that you know nothing about. So operating a demo account allows you to learn the business without losing money. Achieving success in the Forex trading market depends upon your own instincts and abilities. After trying a demo account, you may find that you don't have what it takes to be successful at this business. Or you may find you excel at it. It is far better to find out with a demo account how you would fare with real money. The vast majority of reputable brokerage houses offering Forex Trading make these accounts available because they know that if you study and learn how to trade effectively you will be comfortable making larger trades, which in turn will make them more money. Some charge for the service and some offer them for free but even if you have to pay a small fee while you are learning it is a small price to pay if you are able to learn the skills to earn huge profits in the Forex market. Gregg Hall is an author living in Navarre Beach, Florida. Find more about this as well asonline Forex trading at http://www.FXTradingStrategies.com Article Source: http://EzineArticles.com/?expert=Gregg_Hall
Earn Thousands Hourly (with a Forex Simulator)
Test-driving an online forex demo account is the preferred method of potential traders to minimize risk. A demo account readily allows a cautious person to go online and observe exactly how a paid account would work. Think of it like playing the popular wargame Command and Conquer: you send in the troops (gobs of fictitious money), make a few tactical maneuvers (invest in speculative exchanges) and conquer territories (reap profit). It can be addictive. Without investing and risking any real money, the investor plays with ghost money in an account and initiates buys and sells the same way it would be done in reality. The software used for these demo accounts parallels what the real trading platform does. Real figures are pulled from exchanges, trend charts are generated, and profits are calculated from buy/sell maneuvers., A trader sees at the end of the day the net loss or gain should real money had been used in the transactions. Even a novice can trade. Let’s assume an investor pretends to open a margin account with ten thousand dollars. He watches trends in the currency markets and believes that the dollar will go up in value against the British pound. The demo software empowers him to purchase at a ten to one margin; he then authorizes a buy of one hundred thousand dollars of dollars and sells one hundred thousand dollars of Pounds. There will be a spread, or difference, which accumulates to the gains, or “profit”. Why invest time with demo accounts? Simple. It’s safe to learn the currency trade without having real money to lose. Think of it like crashing your car in driving simulators or doing crazy rolls in an F-14 - on a Playstation. You stretch your creativity, test your reflexes and build your skills all behind the safety of a highly immersive computer screen. Your mind gets a full reflex workout without incurring damage to property and incurring lawsuits! The same holds true for forex trading. Spending time with a demo account allows the potential trader to gain skills and learn the ins and outs of the game and the market place. A person is then able to see if they truly have the instincts necessary for the market and have sufficient knowledge to “play with the big boys.” Almost all online companies involved in forex trading offer demo accounts, sometimes free and sometimes for a small fee. Even if a fee is paid, it is usually worth it because a forex trader can flex his skills and knowledge for vast profits after spending some time practicing with the forex demo software. Setting up a demo account requires nothing more than a valid email address and your name. Upon activation, you will have access to the usual charts, graphs, ordering system and even prediction tools. The latter are quite interesting, particularly predictive implements based on Fibonnacci… but take care that such tools can never predict swings in the market. Too many social, political and environmental variables cause erratic fluctuations and no software can ever take those into consideration. Richard Peyton, my good friend, benefited from a forex demo account. After months of study of the forex market, Jackson was convinced that he could make a go of it as a day trader in the forex market. His girlfriend, however wasn’t convinced and feared the inherent risk. She considered forex nothing more than sophisticated gambling. Richard went to a brokerage company online that he felt held good reputation. He set up a demo forex account and began to make trades as though he were using real money. After several days, on paper, Richard garnered consistent profit. He continued learning and his confidence increased that he grew anxious to open a real forex account and invest a percentage of disposable income. His girlfriend also saw how on paper he had made a nice profit and relaxed, withdrew her objections. Today Richard and his family do very well financially through forex trading, With a demo account, he leapt into a world of vast financial potential and built a fortune. He retired his day job. An expert at persuasion influence, Joseph R. Plazo conducts leadership executive coaching and runs a free content article directory on total human empowerment. Joseph achieved financial independence at 22, authored five NLP books, mentored hundreds and indulges in his passion for radionics. Always to take the initiative, his battle cry is "Ducunt volentem fata, nolentem trahunt." Article Source: http://EzineArticles.com/?expert=Joseph_Plazo
Foreign exchange market
The foreign exchange market (currency, forex, or FX) trades currencies. It lets banks and other institutions easily buy and sell currencies. [1]
The purpose of the foreign exchange market is to help international trade and investment. A foreign exchange market helps businesses convert one currency to another. For example, it permits a U.S. business to import European goods and pay Euros, even though the business's income is in U.S. dollars.
In a typical foreign exchange transaction a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market started forming during the 1970s when countries gradually switched to floating exchange rates from the previous exchange rate regime, which remained fixed as per the Bretton Woods system.
The foreign exchange market is unique because of
its trading volumes,
the extreme liquidity of the market,
its geographical dispersion,
its long trading hours: 24 hours a day except on weekends (from 22:00 UTC on Sunday until 22:00 UTC Friday),
the variety of factors that affect exchange rates.
the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)
the use of leverage
$1.005 trillion in spot transactions $362 billion in outright forwards
$1.714 trillion in foreign exchange swaps
$129 billion estimated gaps in reporting
Market size and liquidity
Presently, the foreign exchange market is one of the largest and most liquid financial markets in the world. Traders include large banks, central banks, currency speculators, corporations, governments, and other financial institutions. The average daily volume in the global foreign exchange and related markets is continuously growing. Daily turnover was reported to be over US$3.2 trillion in April 2007 by the Bank for International Settlements. [2] Since then, the market has continued to grow. According to Euromoney's annual FX Poll, volumes grew a further 41% between 2007 and 2008.[3]
Of the $3.98 trillion daily global turnover, trading in London accounted for around $1.36 trillion, or 34.1% of the total, making London by far the global center for foreign exchange. In second and third places respectively, trading in New York accounted for 16.6%, and Tokyo accounted for 6.0%.[4] In addition to "traditional" turnover, $2.1 trillion was traded in derivatives.
Exchange-traded FX futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts.
Several other developed countries also permit the trading of FX derivative products (like currency futures and options on currency futures) on their exchanges. All these developed countries already have fully convertible capital accounts. Most emerging countries do not permit FX derivative products on their exchanges in view of prevalent controls on the capital accounts. However, a few select emerging countries (e.g., Korea, South Africa, India—[1]; [2]) have already successfully experimented with the currency futures exchanges, despite having some controls on the capital account.
FX futures volume has grown rapidly in recent years, and accounts for about 7% of the total foreign exchange market volume, according to The Wall Street Journal Europe (5/5/06, p. 20).
| Rank | Name | Volume |
|---|---|---|
| 1 | Deutsche Bank | 21.70% |
| 2 | UBS AG | 15.80% |
| 3 | Barclays Capital | 9.12% |
| 4 | Citi | 7.49% |
| 5 | Royal Bank of Scotland | 7.30% |
| 6 | JPMorgan | 4.19% |
| 7 | HSBC | 4.10% |
| 8 | Lehman Brothers | 3.58% |
| 9 | Goldman Sachs | 3.47% |
| 10 | Morgan Stanley | 2.86% |
Foreign exchange trading increased by 38% between April 2005 and April 2006 and has more than doubled since 2001. This is largely due to the growing importance of foreign exchange as an asset class and an increase in fund management assets, particularly of hedge funds and pension funds. The diverse selection of execution venues have made it easier for retail traders to trade in the foreign exchange market. In 2006, retail traders constituted over 2% of the whole FX market volumes with an average daily trade volume of over US$50-60 billion (see retail trading platforms).[6] Because foreign exchange is an OTC market where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house. The biggest geographic trading centre is the UK, primarily London, which according to IFSL estimates has increased its share of global turnover in traditional transactions from 31.3% in April 2004 to 34.1% in April 2007. The ten most active traders account for almost 80% of trading volume, according to the 2008 Euromoney FX survey.[3] These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually 0–3 pips. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203 on a retail broker. Minimum trading size for most deals is usually 100,000 units of base currency, which is a standard "lot".
These spreads might not apply to retail customers at banks, which will routinely mark up the difference to say 1.2100/1.2300 for transfers, or say 1.2000/1.2400 for banknotes or travelers' checks. Spot prices at market makers vary, but on EUR/USD are usually no more than 3 pips wide (i.e., 0.0003). Competition is greatly increased with larger transactions, and pip spreads shrink on the major pairs to as little as 1 to 2 pips.
