Forex Trading Platforms And Forex
by: Phil Jarvie
Think of the "platform" as the roads and freeway system that connects all traders to the finanical markets including forex. At the base level, everyone must be connected to the Internet. On top of that layer of connection, all programs and systems must be able to talk to each other.
All data must be stored some where, and all users must connect to that some where - which is where the "platform" comes in. So, there are many data-centers around the World, and they all update each other so that there are many copies of the same information in many places.
When anything ever happens - either a trade or a piece of news - all the servers are updated super-fast, and all of us are connected to this information by means of the platform.
Every vendor of a forex trading robot or expert advisor has chosen to make his pruct "talk to" the World via a platform. By a very large margin, MetaTrader 4 is the platform of choice used by almost every company I have found so far.
It overcomes language issues, computer operating system issues, and works across all Internation jurisdictions.
Therefore, MetaTrader 4 is the best and most widely used solution for brokers, the banks and financial companies, dealing centers and of course the vendors of robots/advisors. The main advantages of the system are:
Coverage of financial markets
The trading platform MetaTrader 4 covers all International brokerage and trading activities at Forex, Futures and CFD markets. It is what is used for all reporting and news services.
Multi-currency basis
The system is designed on a multi-currency basis. It means that any currency can serve as a general currency used in the operation of the whole complex in any country and with any national currency.
Economy and productivity
the data transfer and processing protocols used by MetaTrader4 are notable for their economy. This means that low powered server such as a Pentium 4 2 GHz, 512 DDR RAM, 80 GB HDD can handle several thousand traders at the same time. Its new protocols reduce both the demands on datalink and the cost.
Reliability
Everything at the server end is backed up in several places. And these backups are synchronized. So if there ever was damage to the history it allows everything to be restored. Historical databases can be restored within several minutes, with the help of another MetaTrader 4 server.
Safety
To provide safety, all the information exchanged between parts of the complex is encrypted by 128-bit keys. Such solution guarantees safekeeping of information transferred and leaves no chance for a third person to use it. A built-in DDoS attacks guard-system raises the stability of operation of the server and the system as a whole.
DDoS is where a person may use thousands of infected computers to attack the MetaTrader4 server. DDoS-attacks resistance is therefore very important. What they do is hide the IP address of the server, and filter the incoming attacks. Data Centers also have a built-in DDoS-attacks protection systems. So the DDoS protection is at many levels.
Multi-lingual support
MetaTrader 4 supports different languages, and a Multi-Language Pack program is included into distributive packages. It provides translation of all program interfaces into any language. With the help of Multi-Language Pack you can easily create any language and integrate it into the program. This feature of the system brings MetaTrader 4 nearer to end-users in any country of the world.
Application Program Interfaces
Think of it as a "plug-in". MetaTrader 4 Server API makes it possible to customize the role of the platform to meet your requirements. Forex Robot vendors use the API to get their program to communicate with the platform. The API standardises everything and can solve a wide range of problems of:
creating additional analyzers for finding a trend of monthly increase of traders;
* creating applications of integration into other systems;
* extending the functionality of the server;
* implementing its own system work control mechanisms;
and do much more.
Integration with web-services
To provide traders with services of higher quality, the system supports the integration with web services (www, wap). This feature allows real-time publishing of quotations and charts on a website site, dynamic tables containing contest results and much more. This is also a very powerful feature relied upon by Expert Advisor vendors.
Flexibility of the system
The platform possesses a wide range of customizable functions. You can set all the parameters, from trade session times to detailed properties of the financial instruments of each user group.
Subadministration
Subadministration mechanisms allow many Introducing Brokers (IBs) on one server quite easily. For processing all accounts and orders of the clients of the IBs, only one server is needed.
Because of the power and flexibility of MetaTrader 4, that it can be used by all groups of people Internationally, and that all groups of users can talk to the server equally, it is the default choice for most Forex robot expert advisors.
About The Author
Phil Jarvie is a professional forex day trader with vast experience using and testing expert advisor forex robots. Visit http://www.forex-robots-reviewed.info where you will find 40 such robots have been tested and reviewed (good and bad), and also to find other useful articles and training materials.
Article source: http://www.articlecity.com
14 December 2009
03 November 2009
Backtesting Forex, Doggone It!
Good but slightly lengthy video about backtesting forex trades...
Again, patience is your friend in the markets!
Again, patience is your friend in the markets!
20 October 2009
Forex Scalping Like the Pros
Got another one about forex scalping for you today...
Happy trading...keep poppin' those pips!!!!
Got another one about forex scalping for you today...
Happy trading...keep poppin' those pips!!!!
22 September 2009
Forex Scalping Strategy--Check Yo' Self Before You Wreck Yo' Self
Forex Scalping - How To Make Real Fast Money
by Tyler Thomas
Forex scalping is often referred to as quick forex trading. This method is often used by traders who will only want to keep their positions for a matter of a few seconds or even for a minute but never longer than that. Before delving into what Forex scalping truly is, it pays to find out a little bit more about the purpose of scalping.
Purpose of Forex Scalping
The main aim of Forex scalping is to make a small but tidy profit and at the same time ensure that the risk to the trading account is kept to a minimal level. Lowering the risk is achieved through quick opening as well as closing of trades. Scalping would not serve any purpose if traders were not offered a chance to trade with accounts that they can leverage to the maximum extent possible. Unless the trader is able to operate with large sums of money (even if it is virtual money) they will not be able to profit from small moves such as a two to three points movement.
How to Perform a Scalp
A scalper needs to simply open their trading position of one hundred thousand units with a pair of currencies, typically the US dollar and the EURO. Each pip will then help him earn ten dollars and so a five pip movement will net him fifty dollars which is pretty good for doing practically nothing for a minute at most.
Forex Brokers and Scalping
A scalper who is able to consistently make profitable scalps is surely going to make a Forex broker suffer losses. This is why, the dealing desk broker at least will not agree with the style of trading adopted by a scalper and so will normally request the scalper to change his style of functioning or deal with another broker. However, brokers can also apply other methods that can help to slow down the scalper as he performs his scalps.
However, a broker that has good trades that they process with automated platforms will not generally feel threatened by the scalpers.
Forex Scalping Facts The theory behind making successful scalps is that it will only be possible to make huge amounts of money in very little time if the scalper is able to make best use of very high leverage. However, this should not make you want to immediately jump off the cliff. Rather, it makes more sense to actually start with a more reasonable leverage such as 20:1 or even 50:1 and as your skills improve, you can then increase your leverage.
At the same time it also pays to keep in mind the fact that you have to learn to trade with higher leverage but without doing anything that will result in a total loss of your investment. For this, be sure to limit your trades to not more than 10 or 15 with a very tight stop loss.
You need to also be careful about deciding on the size of your trading lot and you must do some math to calculate your worst case scenario. So, if you suffer ten consecutive losses, you will need to stop at once.
How Effective Is It? Although the Forex market functions 24 x 7, not every hour of trading is suitable for Forex scalping. You need to pick those hours when trading is most volatile and you must also be aware of the behavior of your currency pair and the most active trading sessions.
Once you enter into a trade, be sure to move stops to break even as soon as is possible. Take profits at reasonable levels and get out of the trade if the prices freeze for longer than expected.
For only the very Best in Forex Marketing strategies, I HIGHLY recommend checking out http://www.unclesamsforex.com
About the Author
Tyler is an 8 year marketer based in Washington DC.
Article source: http://www.goarticles.com/
by Tyler Thomas
Forex scalping is often referred to as quick forex trading. This method is often used by traders who will only want to keep their positions for a matter of a few seconds or even for a minute but never longer than that. Before delving into what Forex scalping truly is, it pays to find out a little bit more about the purpose of scalping.
Purpose of Forex Scalping
The main aim of Forex scalping is to make a small but tidy profit and at the same time ensure that the risk to the trading account is kept to a minimal level. Lowering the risk is achieved through quick opening as well as closing of trades. Scalping would not serve any purpose if traders were not offered a chance to trade with accounts that they can leverage to the maximum extent possible. Unless the trader is able to operate with large sums of money (even if it is virtual money) they will not be able to profit from small moves such as a two to three points movement.
How to Perform a Scalp
A scalper needs to simply open their trading position of one hundred thousand units with a pair of currencies, typically the US dollar and the EURO. Each pip will then help him earn ten dollars and so a five pip movement will net him fifty dollars which is pretty good for doing practically nothing for a minute at most.
Forex Brokers and Scalping
A scalper who is able to consistently make profitable scalps is surely going to make a Forex broker suffer losses. This is why, the dealing desk broker at least will not agree with the style of trading adopted by a scalper and so will normally request the scalper to change his style of functioning or deal with another broker. However, brokers can also apply other methods that can help to slow down the scalper as he performs his scalps.
However, a broker that has good trades that they process with automated platforms will not generally feel threatened by the scalpers.
Forex Scalping Facts The theory behind making successful scalps is that it will only be possible to make huge amounts of money in very little time if the scalper is able to make best use of very high leverage. However, this should not make you want to immediately jump off the cliff. Rather, it makes more sense to actually start with a more reasonable leverage such as 20:1 or even 50:1 and as your skills improve, you can then increase your leverage.
At the same time it also pays to keep in mind the fact that you have to learn to trade with higher leverage but without doing anything that will result in a total loss of your investment. For this, be sure to limit your trades to not more than 10 or 15 with a very tight stop loss.
You need to also be careful about deciding on the size of your trading lot and you must do some math to calculate your worst case scenario. So, if you suffer ten consecutive losses, you will need to stop at once.
How Effective Is It? Although the Forex market functions 24 x 7, not every hour of trading is suitable for Forex scalping. You need to pick those hours when trading is most volatile and you must also be aware of the behavior of your currency pair and the most active trading sessions.
Once you enter into a trade, be sure to move stops to break even as soon as is possible. Take profits at reasonable levels and get out of the trade if the prices freeze for longer than expected.
For only the very Best in Forex Marketing strategies, I HIGHLY recommend checking out http://www.unclesamsforex.com
About the Author
Tyler is an 8 year marketer based in Washington DC.
Article source: http://www.goarticles.com/
09 August 2009
Day Trading Forex Signals
Forex Day Trading Signal And It's Importance
by Umee
If you want to make quick decisions that are accurate, then a real-time forex day trading signal provider is what you need. These data will help you survive in the fast world of foreign exchange market. More importantly, it will be helpful to your successful transactions.
Foreign exchange trading is similar to investing in other strategies for generating profit. There is no guessing in the trade. You need accurate and reliable information to gain a trade. You certainly need that.
Simply, these signals are messages or codes used by traders to be their guide in the Forex. It will help create quick decisions during the day of surgery.
A Forex signal characteristics of reliable information. This is very important to produce accurate decisions. A close examination of these signals provide a full range payout percentages, which makes your business very profitable.
For trades profitable, you need a signal provider that you could trust. In general, to make it very effective whenever you trade, you need to add this to your tools Forex Key.
With the use of data specific day trading signal, you can minimize the possibility of losing your money and opportunities. You can have as many profitable businesses as possible before the Trade Day farm.
In addition, this set of signals will help you make decisions beneficial, even if day trading is not favorable. It will guide you to avoid the risk of losing trades.
A reliable trading day forex signal provider is a key to success. Without them, beside you, your chances of winning = a time delay. I hope this article will help you to find out best forex signal service for high profit and save from losses in the future. You must be understand forex signal provider is playing very vital role in forex market and it is very important for us.
About the Author
Read This Candid Review About The Best Forex Trade Signals Online For Making Big Profits In Forex Market. Accurate Forex Signals Are Delivered In Your Inbox That Maximize Your Profits In This Tricky Market.
Article source: http://www.articlecity.com/
Day Trading Forex Signals
by Umee
If you want to make quick decisions that are accurate, then a real-time forex day trading signal provider is what you need. These data will help you survive in the fast world of foreign exchange market. More importantly, it will be helpful to your successful transactions.
Foreign exchange trading is similar to investing in other strategies for generating profit. There is no guessing in the trade. You need accurate and reliable information to gain a trade. You certainly need that.
Simply, these signals are messages or codes used by traders to be their guide in the Forex. It will help create quick decisions during the day of surgery.
A Forex signal characteristics of reliable information. This is very important to produce accurate decisions. A close examination of these signals provide a full range payout percentages, which makes your business very profitable.
For trades profitable, you need a signal provider that you could trust. In general, to make it very effective whenever you trade, you need to add this to your tools Forex Key.
With the use of data specific day trading signal, you can minimize the possibility of losing your money and opportunities. You can have as many profitable businesses as possible before the Trade Day farm.
In addition, this set of signals will help you make decisions beneficial, even if day trading is not favorable. It will guide you to avoid the risk of losing trades.
A reliable trading day forex signal provider is a key to success. Without them, beside you, your chances of winning = a time delay. I hope this article will help you to find out best forex signal service for high profit and save from losses in the future. You must be understand forex signal provider is playing very vital role in forex market and it is very important for us.
About the Author
Read This Candid Review About The Best Forex Trade Signals Online For Making Big Profits In Forex Market. Accurate Forex Signals Are Delivered In Your Inbox That Maximize Your Profits In This Tricky Market.
Article source: http://www.articlecity.com/
Day Trading Forex Signals
16 July 2009
Forex Trading Success Stories
Finding Stories Of Successful Forex Traders
by Cedric Welsch
Stories of successful Forex traders are out there if you look. One of the problems with figuring out whether or not the stories are true is that any good writer can make them up, sometimes even without ever having traded once in their life. So how do you find the real stories that not only inspire but also educate?
Forex trading is a skill that is learned over time. Systems are helpful and they can help teach you the ins and outs that would cost you a fortune to figure out by yourself. Yet no system can teach you exactly how you're going to respond to certain situations.
For instance, if you're using a system that has you starting off with pretend money, you're developing a much needed skill. You're learning and finding out what works, what doesn't, and whether or not you've interpreted the material correctly. What it doesn't teach you is how you'll react when you are risking real money and things aren't going as planned.
Stories of successful Forex traders can be very beneficial for helping you learn the broader scope of trading. They come from a different place than where you're trading from because they are dealing with their own hard earned cash and that changes the whole ball game. You want to hear various stories that will be inclined to focus on this part of the trading, not the part where you're trading pretend money.
The more you start to understand the Forex trading world, the easier it will be for you to find legitimate stories and draw real experience from them. You'll be able to spot the made up stories that offer the same concept over and over. That concept is outlined with the success with pretend money, a stumble with the real money, and then success again.
When you take on Forex trading you're entering a new world of self discovery and financial ups and downs. It's not the same picture that you'll see when you read promo blogs. There are some very interesting wins and very hard losses that can take place. The wins can really teach you just as much as the losses. Your goal here is to understand a new realm. This doesn't happen with just one loss.
It's not easy to transition from any career into another. What makes the transition into Forex trading so difficult is that it is usually so far removed from the career you are transitioning from. Thus, it's a lot like going back to the beginning and starting all over again and learning a whole new career. Think about how long it takes doctors, lawyers, and car mechanics to become truly proficient at their jobs. Now you'll understand what you're looking for when you read stories of successful Forex traders online.
About the Author
Do you want to really make profits with forex? Make sure you get fresh updates ahead of everybody else here: Forex News
Also, you need to know how to read and analyze the trading market well. Learn Currency Trading News
by Cedric Welsch
Stories of successful Forex traders are out there if you look. One of the problems with figuring out whether or not the stories are true is that any good writer can make them up, sometimes even without ever having traded once in their life. So how do you find the real stories that not only inspire but also educate?
Forex trading is a skill that is learned over time. Systems are helpful and they can help teach you the ins and outs that would cost you a fortune to figure out by yourself. Yet no system can teach you exactly how you're going to respond to certain situations.
For instance, if you're using a system that has you starting off with pretend money, you're developing a much needed skill. You're learning and finding out what works, what doesn't, and whether or not you've interpreted the material correctly. What it doesn't teach you is how you'll react when you are risking real money and things aren't going as planned.
Stories of successful Forex traders can be very beneficial for helping you learn the broader scope of trading. They come from a different place than where you're trading from because they are dealing with their own hard earned cash and that changes the whole ball game. You want to hear various stories that will be inclined to focus on this part of the trading, not the part where you're trading pretend money.
The more you start to understand the Forex trading world, the easier it will be for you to find legitimate stories and draw real experience from them. You'll be able to spot the made up stories that offer the same concept over and over. That concept is outlined with the success with pretend money, a stumble with the real money, and then success again.
When you take on Forex trading you're entering a new world of self discovery and financial ups and downs. It's not the same picture that you'll see when you read promo blogs. There are some very interesting wins and very hard losses that can take place. The wins can really teach you just as much as the losses. Your goal here is to understand a new realm. This doesn't happen with just one loss.
It's not easy to transition from any career into another. What makes the transition into Forex trading so difficult is that it is usually so far removed from the career you are transitioning from. Thus, it's a lot like going back to the beginning and starting all over again and learning a whole new career. Think about how long it takes doctors, lawyers, and car mechanics to become truly proficient at their jobs. Now you'll understand what you're looking for when you read stories of successful Forex traders online.
About the Author
Do you want to really make profits with forex? Make sure you get fresh updates ahead of everybody else here: Forex News
Also, you need to know how to read and analyze the trading market well. Learn Currency Trading News
11 June 2009
Forex Trading Strategy Video
Forex Trading Tutorial Video
Got another forex trading tutorial video for you...peep it...
Price action is always king!!!
Got another forex trading tutorial video for you...peep it...
Price action is always king!!!
04 May 2009
Psychological Price Levels in Forex Trading
Importance of Big Figures in Forex Trading
by: John M Bland
Those who have followed me over the years know the importance I place on “big figures” (otherwise referred to as “round numbers”) in forex trading. There is a technical, fundamental and psychological component to big figures that make them significant. While this isn’t always quantifiable, pivotal big figures are often the ones that drive expectations and currency forecasts.
What is a big figure in forex trading? A big figure (or “round number”) is a forex rate that ends in 00, such as x.xx00 or xx.00. Examples are EUR/USD 1.3400, 1.3500, 1.3600, etc and USD/JPY 89.00, 90.00, 91.00, etc. Market convention is to drop the 00 and refer to big figures without them, such as EUR/USD 1.34, 1.35, 1.36 or USD/JPY 89, 90, 91.
Not all big figures should be treated the same. Some big figures have more significance than others in forex trading. I refer to these as pivotal big figures, which are ones that end in 2, 5, 8 and 0. For example, EUR/USD 1.32, 1.35, 1.38 and 1.40 are more significant than EUR/USD 1.31, 1.33, 1.34, 1.36, 1.37 and 1.39. The pivotal big figures ending in 0 and 5 are most significant. The way I look at it, if a pivotal big figure is broken, the risk is for the next round number as long as it trades below it. For example, if EUR/USD 1.40 is broken, next target would be 1.38. If that level is broken, I then divide the 1.35-1.38 range in half and use 1.3650 as the next target with the broader risk for 1.35. Note these are not support or resistance levels so I give leeway around pivotal big figures and look for whether they are established as support or resistance.
There are several reasons why pivotal big figures are important:
1) Psychological – There is a strong psychological component to pivotal big figures. This is hard to quantify but there is clearly an emotional impact. Think about your trading and how your sentiment changes when a big figure ending in 2, 5, 8 or 0 is firmly broken or holds. As an example in the current market, the EUR/USD failure at 1.38 (correction high was 1.3790) was followed by 1.35 coming under attack. This pivotal big figure was briefly broken (low of 1.3444) but so far not conclusively as EUR/USD has been unable to stay below it. A firm 1.35 break would raise a risk for 1.32 and 1.30 while a move back above 1.38 would put 1.40 in play again. In another example, a recent failure above USD/JPY 92 has seen the upside stall and 90 subsequently tested. Note, the use of pivotal big figures is just one tool and should be used in conjunction with other tools and indicators that make up your analysis.
2) Options Barriers – Options barriers are often placed at big figures and this often leads to talk of a defense of these levels. When a barrier is at a pivotal big figure it often has a bigger attraction as stops are also often placed at those levels. I am not sure why anyone would use a big figure as an options strike but this is often the case. A discussion of options and the impact on spot forex trading will be left to a future article. The point here is that options strikes are often set at big figures.
3) 10 Big Figure Ranges – Central bank and finance officials often talk in terms of 10 big figure ranges. This is especially true in USD/JPY and in the EUR/USD as well. These ranges usually start and end with a 0 or 5, such as USD/JPY 85-95, 90-100, 95-105. This may be a reason why pivotal big figures ending in 0 and 5 have taken on more significance over the years. In the years when central banks were more openly interventionist, the market assumed a defense of these ranges and often put this to a test. In the current market, the Swiss National Bank (SNB) openly defended EUR/CHF 1.50 (pivotal big figure) as the bottom of the range for many months. The SNB then abandoned a defense of this level and this saw EUR/CHF drop below it. The market is now focused on 1.45 (another pivotal big figure) as the next line of defense and the SNB appears to be currently defending 1.46 to prevent a run at 1.45.
4) Stops – Despite big figures being obvious targets for the market, there are still traders who place stops at or just above/below these levels. This is an invitation to getting stopped out of a position as these round numbers can be like waving a red flag at a charging bull. We refer to stops as JUBBS, which are stops at obvious levels. For a description of a JUBBS stop, visit the Global-View.com website and search under JUBBS. Sometimes the market feels compelled to test big figures, especially pivotal ones, to see if there are stops or bid/offers at these levels.
5) Congestion Around Pivotal Big Figures – Sometimes congestion around a pivotal big figure will take place as the market battles in a tug-of-war to establish on one side or the other. This often sees a narrowing range as the market trades on both sides of a pivotal big figure each day. Those on GVI Forex have seen me point out these patterns when a big figure, especially a pivotal one, prints each day. This offers a chance to trade on both sides as long as this pattern persists. However, the longer this pattern goes on, the more momentum is drained from the market and the greater the risk of a directional move once this pattern is broken.
To sum up, pivotal big figures can be a useful tool for forex trading. Pivotal big figures can be a good guide to the market bias and to potential targets. Central banks and financial officials often think in terms of round number ranges and this helps guide market expectations as well. The use of pivotal big figures can offer trading opportunities during periods of congestion and then signal directional moves when the pattern is broken. Whatever the case, it pays to be aware of pivotal big figures and the ways it can impact trading.
About The Author
John M. Bland has been involved in the forex market for more than 30 years . He is a co-founder of www.global-view.com,the leading forex discussion site and home of the original forex forums. Global-view is a place where forex traders come for currency trading, the latest rumor , breaking news and forex trading flows.
Article source: http://www.articlecity.com/
by: John M Bland
Those who have followed me over the years know the importance I place on “big figures” (otherwise referred to as “round numbers”) in forex trading. There is a technical, fundamental and psychological component to big figures that make them significant. While this isn’t always quantifiable, pivotal big figures are often the ones that drive expectations and currency forecasts.
What is a big figure in forex trading? A big figure (or “round number”) is a forex rate that ends in 00, such as x.xx00 or xx.00. Examples are EUR/USD 1.3400, 1.3500, 1.3600, etc and USD/JPY 89.00, 90.00, 91.00, etc. Market convention is to drop the 00 and refer to big figures without them, such as EUR/USD 1.34, 1.35, 1.36 or USD/JPY 89, 90, 91.
Not all big figures should be treated the same. Some big figures have more significance than others in forex trading. I refer to these as pivotal big figures, which are ones that end in 2, 5, 8 and 0. For example, EUR/USD 1.32, 1.35, 1.38 and 1.40 are more significant than EUR/USD 1.31, 1.33, 1.34, 1.36, 1.37 and 1.39. The pivotal big figures ending in 0 and 5 are most significant. The way I look at it, if a pivotal big figure is broken, the risk is for the next round number as long as it trades below it. For example, if EUR/USD 1.40 is broken, next target would be 1.38. If that level is broken, I then divide the 1.35-1.38 range in half and use 1.3650 as the next target with the broader risk for 1.35. Note these are not support or resistance levels so I give leeway around pivotal big figures and look for whether they are established as support or resistance.
There are several reasons why pivotal big figures are important:
1) Psychological – There is a strong psychological component to pivotal big figures. This is hard to quantify but there is clearly an emotional impact. Think about your trading and how your sentiment changes when a big figure ending in 2, 5, 8 or 0 is firmly broken or holds. As an example in the current market, the EUR/USD failure at 1.38 (correction high was 1.3790) was followed by 1.35 coming under attack. This pivotal big figure was briefly broken (low of 1.3444) but so far not conclusively as EUR/USD has been unable to stay below it. A firm 1.35 break would raise a risk for 1.32 and 1.30 while a move back above 1.38 would put 1.40 in play again. In another example, a recent failure above USD/JPY 92 has seen the upside stall and 90 subsequently tested. Note, the use of pivotal big figures is just one tool and should be used in conjunction with other tools and indicators that make up your analysis.
2) Options Barriers – Options barriers are often placed at big figures and this often leads to talk of a defense of these levels. When a barrier is at a pivotal big figure it often has a bigger attraction as stops are also often placed at those levels. I am not sure why anyone would use a big figure as an options strike but this is often the case. A discussion of options and the impact on spot forex trading will be left to a future article. The point here is that options strikes are often set at big figures.
3) 10 Big Figure Ranges – Central bank and finance officials often talk in terms of 10 big figure ranges. This is especially true in USD/JPY and in the EUR/USD as well. These ranges usually start and end with a 0 or 5, such as USD/JPY 85-95, 90-100, 95-105. This may be a reason why pivotal big figures ending in 0 and 5 have taken on more significance over the years. In the years when central banks were more openly interventionist, the market assumed a defense of these ranges and often put this to a test. In the current market, the Swiss National Bank (SNB) openly defended EUR/CHF 1.50 (pivotal big figure) as the bottom of the range for many months. The SNB then abandoned a defense of this level and this saw EUR/CHF drop below it. The market is now focused on 1.45 (another pivotal big figure) as the next line of defense and the SNB appears to be currently defending 1.46 to prevent a run at 1.45.
4) Stops – Despite big figures being obvious targets for the market, there are still traders who place stops at or just above/below these levels. This is an invitation to getting stopped out of a position as these round numbers can be like waving a red flag at a charging bull. We refer to stops as JUBBS, which are stops at obvious levels. For a description of a JUBBS stop, visit the Global-View.com website and search under JUBBS. Sometimes the market feels compelled to test big figures, especially pivotal ones, to see if there are stops or bid/offers at these levels.
5) Congestion Around Pivotal Big Figures – Sometimes congestion around a pivotal big figure will take place as the market battles in a tug-of-war to establish on one side or the other. This often sees a narrowing range as the market trades on both sides of a pivotal big figure each day. Those on GVI Forex have seen me point out these patterns when a big figure, especially a pivotal one, prints each day. This offers a chance to trade on both sides as long as this pattern persists. However, the longer this pattern goes on, the more momentum is drained from the market and the greater the risk of a directional move once this pattern is broken.
To sum up, pivotal big figures can be a useful tool for forex trading. Pivotal big figures can be a good guide to the market bias and to potential targets. Central banks and financial officials often think in terms of round number ranges and this helps guide market expectations as well. The use of pivotal big figures can offer trading opportunities during periods of congestion and then signal directional moves when the pattern is broken. Whatever the case, it pays to be aware of pivotal big figures and the ways it can impact trading.
About The Author
John M. Bland has been involved in the forex market for more than 30 years . He is a co-founder of www.global-view.com,the leading forex discussion site and home of the original forex forums. Global-view is a place where forex traders come for currency trading, the latest rumor , breaking news and forex trading flows.
Article source: http://www.articlecity.com/
20 April 2009
Forex Currency Brokers and the Traders Who Love Them
The Role The Forex Market Plays in Regards to Currency Brokers
by: Andy Richards
Many have asked the common question of the role that the Forex market plays in terms of Currency Brokers. When one trades in the stock market, the market that is used will very depending on the country where your shares are based in. For example a company in the UK will most probably be found in the FTSE market. Now when looking at the market in terms of currency trading, everyone trades in the Forex market. The Forex market is the universal currency trading market that is used all over the world.
When you do decide to go ahead with Currency Brokers, you will most probably have a discussion session of the Forex market and how it works. All major currencies are traded on the Forex which Currency Brokers will highlight for you. The trading occurs for five days a week through out the entire day and night. Trading closes on the weekends as expected.
Now it was a common trend for many people to try their luck in Forex by trading themselves. This was fine when the market was fairly stable, however with the current economic downturn; this has led the market to become quite volatile. As a result it is important that you get an expert to deal with your currency trading which is a service provided by Currency Brokers.
To make the most of Currency Brokers in the current economical climate, it is very important that you take your time in finding one that has a proven track record. After all you want to give your money to invest to someone that you know has given results in the past. The last thing you want is giving your money to someone to invest that has around about the same experience as yourself.
Need help? Visit currency brokers comparisons, reviews and resources visit http://www.yourbrokerguide.com
About the Author
Hi my name is Andy, I hope to be able to contribute to this site through my posts and look forward to talking with you all. I am interested in a variety of things, such as investing, and stock market stuff, computers and internet, obviously, as well as sailing,water skiing, pretty much any types of water sports actually.
Article source: http://www.articlecity.com/
by: Andy Richards
Many have asked the common question of the role that the Forex market plays in terms of Currency Brokers. When one trades in the stock market, the market that is used will very depending on the country where your shares are based in. For example a company in the UK will most probably be found in the FTSE market. Now when looking at the market in terms of currency trading, everyone trades in the Forex market. The Forex market is the universal currency trading market that is used all over the world.
When you do decide to go ahead with Currency Brokers, you will most probably have a discussion session of the Forex market and how it works. All major currencies are traded on the Forex which Currency Brokers will highlight for you. The trading occurs for five days a week through out the entire day and night. Trading closes on the weekends as expected.
Now it was a common trend for many people to try their luck in Forex by trading themselves. This was fine when the market was fairly stable, however with the current economic downturn; this has led the market to become quite volatile. As a result it is important that you get an expert to deal with your currency trading which is a service provided by Currency Brokers.
To make the most of Currency Brokers in the current economical climate, it is very important that you take your time in finding one that has a proven track record. After all you want to give your money to invest to someone that you know has given results in the past. The last thing you want is giving your money to someone to invest that has around about the same experience as yourself.
Need help? Visit currency brokers comparisons, reviews and resources visit http://www.yourbrokerguide.com
About the Author
Hi my name is Andy, I hope to be able to contribute to this site through my posts and look forward to talking with you all. I am interested in a variety of things, such as investing, and stock market stuff, computers and internet, obviously, as well as sailing,water skiing, pretty much any types of water sports actually.
Article source: http://www.articlecity.com/
16 April 2009
Stop Loss Orders are MAD Important in Forex Trading--Here's a How-To Video
If you're not trading with stops, you will eventually have to stop trading. Hey, I just made that up! Pretty catchy, huh?
Anyway, here's a Forex trading instructional video about stop-loss orders. Good info.
Use those stop-loss orders when trading forex!!!
Anyway, here's a Forex trading instructional video about stop-loss orders. Good info.
Use those stop-loss orders when trading forex!!!
09 March 2009
Trading Forex in a Beastly Manner Through Price Action Strategies
Wanted to share this insightful video with you...some solid information on forex trading strategies and so forth.
Take heed! He who does not have a trading plan will be wiped out!
Take heed! He who does not have a trading plan will be wiped out!
06 February 2009
MAD Potential in Forex Trading
Forex Trading: A Real Potential
by Shankar Kukreja
Today the Forex trading practice has become quite popular in comparison to what he was earlier. Many people have finally managed to realise the Forex trading is a great way to make enough money. The best part about Forex trading is that it brings in enough flexibility to its users. There are so many people who are are using Forex trading to make money from their homes. However to ensure that you follow the right means and the right methodology to earn profits you need to be well aware of the Forex trading tips.
The first and most essential amongst the few Forex trading tips is go by a procedure that is simple and easy. Jumping into something complicated might make this whole setup more of a hassle to you. More so the individual in such a mess might lose out on an actual opportunity. One has to be a little realistic when it comes to a trading of this stature. Many wish to hit the bull's eye in the very first time, but being unrealistic is close to being childish which will not favour you in any way.
Patience always is called upon when you wish to succeed in any field. The same applies to Forex trading. You need to start off at a slow pace and get settled in. As and when you are getting to know more about Forex trading you can progress ahead. It is advised not to invest all of your money in one go just to make large profits. Money management skills are essential and if you are polished with that skill then you can be very good at this means of trading.
Third and most important tip is that when you using sources like internet to know more about Forex trading, be sure of the reliability of that website. Chances are that you are being duped with false information just to earn money. Many who are new to this field would try and gain as much knowledge as they can about Forex and end up looking up for online Forex trading tips. Some websites can come up with genuine piece of information and news.
Thanks to Forex trading the economic scenario has changed and it is for the betterment of its people. India as a nation has relatively got itself blended in the colours of Forex trading. There number of Forex traders in India is on the rise, realizing of what it has to offer, many are taking utmost advantage of such a form of trading. People are well versed with the kind of trading Forex is, and more so there are many who keep a good track of the stocks and shares. Information related to those shares, their rise and falls etc. With the amount of potential India showcases, Forex traders in India can be very well reap the benefits.
If you are a beginner you must be sure of what Forex trading comprises of. You need to come up with a trading or a demat account and based on that you need to introduce yourself as a stock broker. As soon as you become a broker, by staying in touch with the figures of the National Stock Exchange and Bombay Stock Exchange, you can have a better grip over the processes of Forex trading. Apart from that being updated with the information and general tips is always a plus point. In most cases people actually fail to come up with Forex trading is because of their lack of knowledge, without which they end up investing more than required and with lack of skills of management they tend to lose out all on it.
About the Author
FXCENTRAL is a leading Forex traders in India established with the goal of providing a wide array of trading products to individual traders, fund managers and institutional customers, also provides Forex trading tips, online forex trading tips. Also they are Best forex Broker in India.
Article source: http://www.goarticles.com
by Shankar Kukreja
Today the Forex trading practice has become quite popular in comparison to what he was earlier. Many people have finally managed to realise the Forex trading is a great way to make enough money. The best part about Forex trading is that it brings in enough flexibility to its users. There are so many people who are are using Forex trading to make money from their homes. However to ensure that you follow the right means and the right methodology to earn profits you need to be well aware of the Forex trading tips.
The first and most essential amongst the few Forex trading tips is go by a procedure that is simple and easy. Jumping into something complicated might make this whole setup more of a hassle to you. More so the individual in such a mess might lose out on an actual opportunity. One has to be a little realistic when it comes to a trading of this stature. Many wish to hit the bull's eye in the very first time, but being unrealistic is close to being childish which will not favour you in any way.
Patience always is called upon when you wish to succeed in any field. The same applies to Forex trading. You need to start off at a slow pace and get settled in. As and when you are getting to know more about Forex trading you can progress ahead. It is advised not to invest all of your money in one go just to make large profits. Money management skills are essential and if you are polished with that skill then you can be very good at this means of trading.
Third and most important tip is that when you using sources like internet to know more about Forex trading, be sure of the reliability of that website. Chances are that you are being duped with false information just to earn money. Many who are new to this field would try and gain as much knowledge as they can about Forex and end up looking up for online Forex trading tips. Some websites can come up with genuine piece of information and news.
Thanks to Forex trading the economic scenario has changed and it is for the betterment of its people. India as a nation has relatively got itself blended in the colours of Forex trading. There number of Forex traders in India is on the rise, realizing of what it has to offer, many are taking utmost advantage of such a form of trading. People are well versed with the kind of trading Forex is, and more so there are many who keep a good track of the stocks and shares. Information related to those shares, their rise and falls etc. With the amount of potential India showcases, Forex traders in India can be very well reap the benefits.
If you are a beginner you must be sure of what Forex trading comprises of. You need to come up with a trading or a demat account and based on that you need to introduce yourself as a stock broker. As soon as you become a broker, by staying in touch with the figures of the National Stock Exchange and Bombay Stock Exchange, you can have a better grip over the processes of Forex trading. Apart from that being updated with the information and general tips is always a plus point. In most cases people actually fail to come up with Forex trading is because of their lack of knowledge, without which they end up investing more than required and with lack of skills of management they tend to lose out all on it.
About the Author
FXCENTRAL is a leading Forex traders in India established with the goal of providing a wide array of trading products to individual traders, fund managers and institutional customers, also provides Forex trading tips, online forex trading tips. Also they are Best forex Broker in India.
Article source: http://www.goarticles.com
19 January 2009
Introduction To Online Forex Trading
Today and average person can learn forex trading. The sale or trading of currency is at the heart of what forex is all about. As exchange rates fluctuate and the economies of countries go up and down, these investments in cash behave in value very much like the regular stock market. When you are in the Forex trading market you will find it operates 24 hours a day giving you access to trades when ever you want. Unlike with other markets, such as the stock exchange, you can continue dealing with the currency trading market without worries over it closing at the end of the day.
The beauty of forex websites is that they allow you to monitor the market in real time when ever you choose. This really helps in the learning process. You'll also be provided with tools that will help you understand the mechanics of trading. This is a clear advantage because you can hone your trading skills before laying down your own money in the market. When you think of it, the forex firms are training you to become skilled at trading for free by providing guidance, demos and news at no additonal cost. It won't take long to feel comfortable in trading. Soon you'll be making money investing as little as $300. Thanks to the internet, learning the currency market has made it easier for even a regular guy to successfully earn money. Currency representatives, called forex brokers, will most likely provide you with access to the forex market.
Similar to stock brokers, forex brokers are there to help. They can consult with you and provide market information and trading strategies. The advice extends to everything needed to become successful trading forex which includes technical analysis and fundamental analysis data. It is only natural that large financial institutions try to monopolize the market because it provides such a solid return on investment.
Profitable results are there for the taking even for an individual investor with a few dollars, because of the easy access to the internet. As I stated earlier, the online forex companies have been making powerful free tools available to educate and improve the knowledge of new investors. The best way to choose a forex broker is to decide on what you need at the moment. Many forex internet sites provide a bevy of tools for the beginning trader including detailed research, online trading simulators, and expert technical advice. You will find that some sites offer access to experienced professional forex traders that make themselves available for questions and advice to forex traders at various skill levels. All of these tools are available to beginners to try out.
While many people who actively trade today have had to learn to use the tools available on the internet in the midst of doing business, these tools will be second nature to those who will come after them. Future generations of forex traders will know how to use the full power of forex trading tools that are available to them and they will be the most powerful group of investors that any economy in any market has ever seen.
About The Author
Jim Wilson gives you more free information at A Forex Capital Market. Search other helpful articles at- A Forex Capital Market Articles. Click here http://www.forexminitrading.com
Article source: http://www.articlecity.com
The beauty of forex websites is that they allow you to monitor the market in real time when ever you choose. This really helps in the learning process. You'll also be provided with tools that will help you understand the mechanics of trading. This is a clear advantage because you can hone your trading skills before laying down your own money in the market. When you think of it, the forex firms are training you to become skilled at trading for free by providing guidance, demos and news at no additonal cost. It won't take long to feel comfortable in trading. Soon you'll be making money investing as little as $300. Thanks to the internet, learning the currency market has made it easier for even a regular guy to successfully earn money. Currency representatives, called forex brokers, will most likely provide you with access to the forex market.
Similar to stock brokers, forex brokers are there to help. They can consult with you and provide market information and trading strategies. The advice extends to everything needed to become successful trading forex which includes technical analysis and fundamental analysis data. It is only natural that large financial institutions try to monopolize the market because it provides such a solid return on investment.
Profitable results are there for the taking even for an individual investor with a few dollars, because of the easy access to the internet. As I stated earlier, the online forex companies have been making powerful free tools available to educate and improve the knowledge of new investors. The best way to choose a forex broker is to decide on what you need at the moment. Many forex internet sites provide a bevy of tools for the beginning trader including detailed research, online trading simulators, and expert technical advice. You will find that some sites offer access to experienced professional forex traders that make themselves available for questions and advice to forex traders at various skill levels. All of these tools are available to beginners to try out.
While many people who actively trade today have had to learn to use the tools available on the internet in the midst of doing business, these tools will be second nature to those who will come after them. Future generations of forex traders will know how to use the full power of forex trading tools that are available to them and they will be the most powerful group of investors that any economy in any market has ever seen.
About The Author
Jim Wilson gives you more free information at A Forex Capital Market. Search other helpful articles at- A Forex Capital Market Articles. Click here http://www.forexminitrading.com
Article source: http://www.articlecity.com
18 January 2009
Forex Trading and Risk-Return Ratio
Forex trading is fast becoming the top method of making money on the internet and plenty of average people are trying their hand at becoming millionaires. For most people, forex trading is a much needed source of a second income, to supplement their current single income from their main profession. However, the true potential to become very wealthy is not tapped by most such investors and they earn mere pennies on the dollar, compared with what they could be earning. While everyone has their own forex currency trading system, this will be in proportion to your risk appetite and will only bring the returns that you strive for.
While there are many ways to invest your money in currency, most people play safe by either investing small amounts or spreading their money very thin across the various currencies they are invested in. This makes for a very small return but practically no risk potential, since the bases are mostly covered so that if one currency depreciates, the other appreciates and the losses are minimal. However, clearly this will never make the forex trader a millionaire.
Life is short, and most forex trading millionaires made their money fast off the forex market. These individuals are generally highly leveraged, because they know that money makes money, and the more money they invest, the greater the risk and the greater the potential reward. Also, betting on unlikely currencies is risky and can have a huge potential upside.
So what exactly will leveraging yourself mean for you? You can start with a portfolio, meaning that you put your investment towards buying a part of the forex trading. Then, you buy shares of the forex trading the world over, depending on what countries appeal to you. The prices of these shares may rise slowly to increase your portfolio, and you are still playing safe. Once your total portfolio value goes over the 5000 dollar mark, you as a forex trader can apply for something known as a console, which now puts you in the position to act as an agent for others. At this point, you can process exchanges for small investors who want to buy and sell currencies through you. For each transaction processed, you will earn a fee of 6% and this can roll into your portfolio, increasing further, making your status as a forex trader more credible.
Other than an unlikely event such as a war or natural calamity, nothing on the forex market will give you a sudden unexpected windfall. Do not expect to become a millionaire over night. You will have to plan and strategize, and most importantly, leverage yourself, to truly make a lot of money. The forex market will generally move like the stock market, in small digits and only when you have plenty of money spread out on the forex market do you stand a chance of making a great deal of profit.
While this type of trading is not for the faint hearted, experience in forex trading will bring some confidence to your forex trading strategy, especially as you learn which systems work for you and which don't. As your level of confidence grows, the process will seem much less daunting. However, it is great to be cautious and be sure of any risks you take. That said, do remember that millionaires are always highly leveraged in the forex market – take calculated risks.
About The Author
Andrew Daigle is the owner, creator and author of many successful websites including ForexBoost at http://www.forexboost.com/ , a free forex training resource and http://www.cashcurve.com/ for learning about many different online business opportunities.
Article source: http://www.articlecity.com/
While there are many ways to invest your money in currency, most people play safe by either investing small amounts or spreading their money very thin across the various currencies they are invested in. This makes for a very small return but practically no risk potential, since the bases are mostly covered so that if one currency depreciates, the other appreciates and the losses are minimal. However, clearly this will never make the forex trader a millionaire.
Life is short, and most forex trading millionaires made their money fast off the forex market. These individuals are generally highly leveraged, because they know that money makes money, and the more money they invest, the greater the risk and the greater the potential reward. Also, betting on unlikely currencies is risky and can have a huge potential upside.
So what exactly will leveraging yourself mean for you? You can start with a portfolio, meaning that you put your investment towards buying a part of the forex trading. Then, you buy shares of the forex trading the world over, depending on what countries appeal to you. The prices of these shares may rise slowly to increase your portfolio, and you are still playing safe. Once your total portfolio value goes over the 5000 dollar mark, you as a forex trader can apply for something known as a console, which now puts you in the position to act as an agent for others. At this point, you can process exchanges for small investors who want to buy and sell currencies through you. For each transaction processed, you will earn a fee of 6% and this can roll into your portfolio, increasing further, making your status as a forex trader more credible.
Other than an unlikely event such as a war or natural calamity, nothing on the forex market will give you a sudden unexpected windfall. Do not expect to become a millionaire over night. You will have to plan and strategize, and most importantly, leverage yourself, to truly make a lot of money. The forex market will generally move like the stock market, in small digits and only when you have plenty of money spread out on the forex market do you stand a chance of making a great deal of profit.
While this type of trading is not for the faint hearted, experience in forex trading will bring some confidence to your forex trading strategy, especially as you learn which systems work for you and which don't. As your level of confidence grows, the process will seem much less daunting. However, it is great to be cautious and be sure of any risks you take. That said, do remember that millionaires are always highly leveraged in the forex market – take calculated risks.
About The Author
Andrew Daigle is the owner, creator and author of many successful websites including ForexBoost at http://www.forexboost.com/ , a free forex training resource and http://www.cashcurve.com/ for learning about many different online business opportunities.
Article source: http://www.articlecity.com/
FOREX Trading Philosophy
Keen on starting FOREX trading? Why would you not be… Many beginning FOREX traders are captivated by the allure of easy money. FOREX websites offer 'risk-free' trading, 'high returns' and 'low investment' – these claims have a grain of truth in them, but the reality of FOREX is a bit more complex. As with anything in life, what you put in will determine what you get out.
There are two common mistakes that many beginner traders make – trading without a strategy and letting emotions rule their decisions. After opening a FOREX account it may be tempting to dive right in and start trading. Watching the movements of EUR/USD for example, you may feel that you are letting an opportunity pass you by if you don't enter the market immediately. You buy and watch the market move against you. You panic and sell, only to see the market recover.
This kind of undisciplined approach to FOREX is guaranteed to lose you money, and have you waste your time. FOREX traders need to have a rational trading strategy and not allow emotions to rule their trading decisions.
The two emotions prevalent in the above example is greed (entering the market immediately) and fear (selling when the market temporarily moves against you). Investing and these two emotions do not gel at all. Keep them out of your trading and you will see results.
To make rational trading decisions the FOREX trader must be well-educated in market movements. He must be able to apply technical studies to charts and plot out entry and exit points. He must take advantage of the various types of orders to minimize his risk and maximize his profit.
The first step in becoming a successful FOREX trader is to understand the market and the forces behind it. Who trades FOREX and why? Who is successful and why are they successful? This knowledge will allow you to identify successful trading strategies and use them as models for your own.
There are 5 major groups of investors who participate in FOREX – Governments, Banks, Corporations, Investment Funds, and traders. Each group has varying objectives, but the one thing that all the groups (except traders) have in common is external control. Every organization has rules and guidelines for trading currencies and can be held accountable for their trading decisions. Individual traders, on the other hand, are accountable only to themselves.
If you do not keep yourself in check, nobody else will. Why should they worry if you aimlessly waste your money?
This means that the trader who lacks rules and guidelines is playing a losing game. Large organizations and educated traders approach the FOREX with strategies, and if you hope to succeed as a FOREX trader you must play by the same rules. That is studying these strategies and rules before starting to trade is so important.
FOREX Trading Philosophy - Money Management
Money management is part and parcel of any trading strategy. Besides knowing which currencies to trade and recognizing entry and exit signals, the successful trader has to manage his resources and integrate money management into his trading plan. Position size, margin, recent profits and losses, and contingency plans all need to be considered before entering the market.
This may sound like Greek now! If it does, you have more reason to get to know these terms. Knowledge will empower you on any investment market, including FOREX.
There are various strategies for approaching money management. Many of them rely on the calculation of core equity. Core equity is your starting balance minus the money used in open positions. If the starting balance is $10,000 and you have $1000 in open positions your core equity is $9000.
When entering a position try to limit risk to 1% to 3% of each trade. This means that if you are trading a standard FOREX lot of $100,000 you should limit your risk to $1000 to $3000 – preferably $1000. You do this by placing a stop loss order 100 pips (when 1 pip = $10) above or below your entry position.
As your core equity rises or falls you can adjust the dollar amount of your risk. With a starting balance of $10,000 and one open position your core equity is $9000. If you wish to add a second open position, your core equity would fall to $8000 and you should limit your risk to $900. Risk in a third position should be limited to $800.
By the same principal you can also raise your risk level as your core equity rises. If you have been trading successfully and made a $5000 profit, your core equity is now $15,000. You could raise your risk to $1500 per transaction. Alternatively, you could risk more from the profit than from the original starting balance. Some traders may risk up to 5% against their realized profits ($5,000 on a $100,000 lot) for greater profit potential.
As you can see, the novice needs to get through quite a bit of education, understanding and planning before those 'risk-free' trading, 'high returns' and 'low investment' promises will come into play. What are you waiting for? Get yourself a decent FOREX Trading Education. If you need more information, feel free to visit http://www.investing-smarter.com/.
About The Author
Dries Cronje is has completed his BSc (Actuarial Science) degree and has been working as an Actuarial Consultant for four and a half years. He is currently studying to be an actuary.
For more information, please visit http://www.investing-smarter.com/.
There are two common mistakes that many beginner traders make – trading without a strategy and letting emotions rule their decisions. After opening a FOREX account it may be tempting to dive right in and start trading. Watching the movements of EUR/USD for example, you may feel that you are letting an opportunity pass you by if you don't enter the market immediately. You buy and watch the market move against you. You panic and sell, only to see the market recover.
This kind of undisciplined approach to FOREX is guaranteed to lose you money, and have you waste your time. FOREX traders need to have a rational trading strategy and not allow emotions to rule their trading decisions.
The two emotions prevalent in the above example is greed (entering the market immediately) and fear (selling when the market temporarily moves against you). Investing and these two emotions do not gel at all. Keep them out of your trading and you will see results.
To make rational trading decisions the FOREX trader must be well-educated in market movements. He must be able to apply technical studies to charts and plot out entry and exit points. He must take advantage of the various types of orders to minimize his risk and maximize his profit.
The first step in becoming a successful FOREX trader is to understand the market and the forces behind it. Who trades FOREX and why? Who is successful and why are they successful? This knowledge will allow you to identify successful trading strategies and use them as models for your own.
There are 5 major groups of investors who participate in FOREX – Governments, Banks, Corporations, Investment Funds, and traders. Each group has varying objectives, but the one thing that all the groups (except traders) have in common is external control. Every organization has rules and guidelines for trading currencies and can be held accountable for their trading decisions. Individual traders, on the other hand, are accountable only to themselves.
If you do not keep yourself in check, nobody else will. Why should they worry if you aimlessly waste your money?
This means that the trader who lacks rules and guidelines is playing a losing game. Large organizations and educated traders approach the FOREX with strategies, and if you hope to succeed as a FOREX trader you must play by the same rules. That is studying these strategies and rules before starting to trade is so important.
FOREX Trading Philosophy - Money Management
Money management is part and parcel of any trading strategy. Besides knowing which currencies to trade and recognizing entry and exit signals, the successful trader has to manage his resources and integrate money management into his trading plan. Position size, margin, recent profits and losses, and contingency plans all need to be considered before entering the market.
This may sound like Greek now! If it does, you have more reason to get to know these terms. Knowledge will empower you on any investment market, including FOREX.
There are various strategies for approaching money management. Many of them rely on the calculation of core equity. Core equity is your starting balance minus the money used in open positions. If the starting balance is $10,000 and you have $1000 in open positions your core equity is $9000.
When entering a position try to limit risk to 1% to 3% of each trade. This means that if you are trading a standard FOREX lot of $100,000 you should limit your risk to $1000 to $3000 – preferably $1000. You do this by placing a stop loss order 100 pips (when 1 pip = $10) above or below your entry position.
As your core equity rises or falls you can adjust the dollar amount of your risk. With a starting balance of $10,000 and one open position your core equity is $9000. If you wish to add a second open position, your core equity would fall to $8000 and you should limit your risk to $900. Risk in a third position should be limited to $800.
By the same principal you can also raise your risk level as your core equity rises. If you have been trading successfully and made a $5000 profit, your core equity is now $15,000. You could raise your risk to $1500 per transaction. Alternatively, you could risk more from the profit than from the original starting balance. Some traders may risk up to 5% against their realized profits ($5,000 on a $100,000 lot) for greater profit potential.
As you can see, the novice needs to get through quite a bit of education, understanding and planning before those 'risk-free' trading, 'high returns' and 'low investment' promises will come into play. What are you waiting for? Get yourself a decent FOREX Trading Education. If you need more information, feel free to visit http://www.investing-smarter.com/.
About The Author
Dries Cronje is has completed his BSc (Actuarial Science) degree and has been working as an Actuarial Consultant for four and a half years. He is currently studying to be an actuary.
For more information, please visit http://www.investing-smarter.com/.
17 January 2009
Forex Trading: Calculating Profit And Loss In Foreign Currency Trading
The foreign exchange market, or Forex market, is an around-the-clock cash market where the currencies of nations are bought and sold. Forex trading is always done in currency pairs. For example, you buy Euros, paying with U.S. Dollars, or you sell Canadian Dollars for Japanese Yen. The value of your Forex investment increases or decreases because of changes in the currency exchange rate or Forex rate. These changes can occur at any time, and often result from economic and political events. Using a hypothetical Forex investment, this article shows you how to calculate profit and loss in Forex trading.
To understand how the exchange rate can affect the value of your Forex investment, you need to learn how to read a Forex quote. Forex quotes are always expressed in pairs. In the following example, your pair of currencies are the U.S. Dollar (USD) and the Canadian Dollar (CAD). The Forex quote, USD/CAD = 170.50, means that one U.S. Dollar is equal to 170.50 Canadian Dollars. The currency to the left of the "/" (USD in this example) is referred to as base currency and its value is always 1. The currency to the right of the "/" (CAD in this example) is referred to as the counter currency. In this example, one USD can buy 170.50 CAD, because it is the stronger of the two currencies. The U.S. Dollar is regarded as the central currency of the Forex market, and it is always treated as the base currency in any Forex quote where it is one of the pairs.
Let's go now to our hypothetical Forex investment to show how you can profit or come up short in Forex trading. In this example, your pair of currencies are the U.S. Dollar and the Euro. The Forex rate of EUR/USD on August 26, 2003 was 1.0857, which means that one U.S. Dollar was equal to 1.0857 Euros, and was the weaker of the two currencies. If you had bought 1,000 Euros on that date, you would have paid $1,085.70.
One year later, the Forex rate of EUR/USD was 1.2083, which means that the value of the Euro increased in relation to the USD. If you had sold the 1,000 Euros one year later, you would have received $1,208.30, which is $122.60 more than what you had started with one year earlier.
Conversely, if the Forex rate one year later had been EUR/USD = 1.0576, the value of the Euro would have weakened in relation to the U.S. Dollar. If you had sold the 1,000 Euros at this Forex rate, you would have received $1,057.60, which is $28.10 less than what you had started out with one year earlier.
As with stocks and mutual funds, there is risk in Forex trading. The risk results from fluctuations in the currency exchange market. Investments with a low level of risk (for example, long-term government bonds) often have a low return. Investments with a higher level of risk (for example, Forex trading) can have a higher return. To achieve your short-term and long-term financial goals, you need to balance security and risk to the comfort level that works best for you.
About The Author
Gregory DeVictor is a consultant who has been developing and marketing web sites since 1999. Learn what you need to know to get started in Forex trading and how to develop a successful Forex trading system at: http://www.forex-trading-system.name/
Article source: http://www.articlecity.com/
To understand how the exchange rate can affect the value of your Forex investment, you need to learn how to read a Forex quote. Forex quotes are always expressed in pairs. In the following example, your pair of currencies are the U.S. Dollar (USD) and the Canadian Dollar (CAD). The Forex quote, USD/CAD = 170.50, means that one U.S. Dollar is equal to 170.50 Canadian Dollars. The currency to the left of the "/" (USD in this example) is referred to as base currency and its value is always 1. The currency to the right of the "/" (CAD in this example) is referred to as the counter currency. In this example, one USD can buy 170.50 CAD, because it is the stronger of the two currencies. The U.S. Dollar is regarded as the central currency of the Forex market, and it is always treated as the base currency in any Forex quote where it is one of the pairs.
Let's go now to our hypothetical Forex investment to show how you can profit or come up short in Forex trading. In this example, your pair of currencies are the U.S. Dollar and the Euro. The Forex rate of EUR/USD on August 26, 2003 was 1.0857, which means that one U.S. Dollar was equal to 1.0857 Euros, and was the weaker of the two currencies. If you had bought 1,000 Euros on that date, you would have paid $1,085.70.
One year later, the Forex rate of EUR/USD was 1.2083, which means that the value of the Euro increased in relation to the USD. If you had sold the 1,000 Euros one year later, you would have received $1,208.30, which is $122.60 more than what you had started with one year earlier.
Conversely, if the Forex rate one year later had been EUR/USD = 1.0576, the value of the Euro would have weakened in relation to the U.S. Dollar. If you had sold the 1,000 Euros at this Forex rate, you would have received $1,057.60, which is $28.10 less than what you had started out with one year earlier.
As with stocks and mutual funds, there is risk in Forex trading. The risk results from fluctuations in the currency exchange market. Investments with a low level of risk (for example, long-term government bonds) often have a low return. Investments with a higher level of risk (for example, Forex trading) can have a higher return. To achieve your short-term and long-term financial goals, you need to balance security and risk to the comfort level that works best for you.
About The Author
Gregory DeVictor is a consultant who has been developing and marketing web sites since 1999. Learn what you need to know to get started in Forex trading and how to develop a successful Forex trading system at: http://www.forex-trading-system.name/
Article source: http://www.articlecity.com/
16 January 2009
Your Guide to Learning a Forex Trading System
There are a great number of people in America that are interested in investing in order to make a tidy profit. There are many ways to invest and many ways to make profits by investing. One method that has been gaining in popularity is that of the Forex trading system. If you are unsure of what this is, let me explain. Forex stands for foreign exchange. A Forex trading system is defined as the simultaneous exchange of one countries currency for another countries currency. If you would like more information, please let this be your guide to learning a Forex trading system.
The Forex trading system involves trading some of the world's most major currencies. These are: the dollar, yen, British pound, Swiss franc, and the Euro. The way the exchange rates of these types of currencies change is based on economic growth. An example: Sometimes the Dollar is worth more than the British pound because the United States was in a period of economic growth while Britain was on the decline. This can be because the unemployment rate was declining in the United States, while on the rise in Britain. Another example: the export rate is up in Asia so the yen is worth more than the Swiss franc where the export rate is down. Economic growth changes daily, so the value of these currencies changes daily. You need to learn to watch for these changes in order to make any money with a currency trading system.
The Forex markets are much larger than that of all U.S. stock markets combined. In fact, the Forex markets make about 1.9 trillion dollars each year. This is 30 times larger than the U.S. stock markets. Also, Forex trading is done throughout the entire world, so it is available 24 hours a day, unlike the U.S. stock markets.
You can learn a Forex trading system for free online at various websites. Many websites offer a free demo account and free Forex trading training. This way you can practice everything you learn for free, without investing or losing any real money. Then when you get a feel for Forex trading, many websites offer a free 30 day trial or free trades to new investors. It is best to utilize some of this free training and the free demo accounts before you start investing your own money.
Now that you understand the Forex trading system a little better, you may wish to get out there and start investing. There is a lot of money to be made, or lost. Be careful and make sure you get the proper training first. With the right frame of mind, you may be able to make some healthy sums of cash through the Forex trading system!
About The Author
Morgan Hamilton offers expert advice and great tips regarding all aspects concerning Forex Trading.
Get the information you are seeking now by visiting http://www.forexinformation.info
Article source: http://www.articlecity.com
The Forex trading system involves trading some of the world's most major currencies. These are: the dollar, yen, British pound, Swiss franc, and the Euro. The way the exchange rates of these types of currencies change is based on economic growth. An example: Sometimes the Dollar is worth more than the British pound because the United States was in a period of economic growth while Britain was on the decline. This can be because the unemployment rate was declining in the United States, while on the rise in Britain. Another example: the export rate is up in Asia so the yen is worth more than the Swiss franc where the export rate is down. Economic growth changes daily, so the value of these currencies changes daily. You need to learn to watch for these changes in order to make any money with a currency trading system.
The Forex markets are much larger than that of all U.S. stock markets combined. In fact, the Forex markets make about 1.9 trillion dollars each year. This is 30 times larger than the U.S. stock markets. Also, Forex trading is done throughout the entire world, so it is available 24 hours a day, unlike the U.S. stock markets.
You can learn a Forex trading system for free online at various websites. Many websites offer a free demo account and free Forex trading training. This way you can practice everything you learn for free, without investing or losing any real money. Then when you get a feel for Forex trading, many websites offer a free 30 day trial or free trades to new investors. It is best to utilize some of this free training and the free demo accounts before you start investing your own money.
Now that you understand the Forex trading system a little better, you may wish to get out there and start investing. There is a lot of money to be made, or lost. Be careful and make sure you get the proper training first. With the right frame of mind, you may be able to make some healthy sums of cash through the Forex trading system!
About The Author
Morgan Hamilton offers expert advice and great tips regarding all aspects concerning Forex Trading.
Get the information you are seeking now by visiting http://www.forexinformation.info
Article source: http://www.articlecity.com
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