Forex Currency Trading - Making Money in the Forex Market
June 26, 2008
Forex currency trading is becoming increasingly popular as more and more traders want to take their shot at the largest trading market in the world. The lure of nearly $2 trillion in trading going on each and every day is too much for most traders to resist. So what is the Forex market, and how does currency trading work? Forex is an abbreviated term for foreign exchange market. The Forex is the largest financial market in the entire world, with an average trade volume of nearly two trillion dollars per day. The modern Forex market is what evolved from initial currency trading.
The idea is to use fluctuating currency rates to make money out of money. For example, let’s say you buy one mini lot (1 mini lot = 10,000 currency) of the EUR/USD at a rate of 1.1500. Two days later the markets shift and the EUR/USD is now 1.1525, and so you decide to sell. Using the formula to figure out profits/losses, 1.1525-1.1500 is .0025 * 10,000 (the size of the mini-lot) = $25. In this case, a $100 investment for one mini lot yielded a $25 profit, or 25% in only two days.
Not a bad percentage by any count. That’s quite a profit for two days.
This is a simplified example, and as with any trading there is always the chance of loss, but this gives you an idea of what traders are shooting for when investing in Forex currency trading and why the potential for profits is so high. Forex currency trading is conducted using “pairs.” The reason for this is that to trade Forex you are basically simultaneously buying one of the currencies, while selling the other. If you are selling the EUR/USD pair, then you are selling Euros in order to buy dollars.
Let’s use the earlier pair as an example. If you are trading the Euro versus the US Dollar, your currency pair is EUR/USD. The Euro (EUR) is referred to as the base currency while the US Dollar (USD) is referred to as the cross currency. The base currency is the one you are selling, while the cross currency is the one you are buying. There always has to be a pair. To buy one currency, you have to do it with another. To sell a currency, you need to get your profits back in another. There must always be two currencies in any Forex currency trading.
The far majority of the Forex trading done in the world takes place between eight currencies: the United States Dollar (USD), Australian Dollar (AUD), Great Britain Pound (GBP), Canadian Dollar (CAD), Swiss Franc (CHF), Japanese Yen (JPY), and the Euro (EUR). Other nations’ currencies may be used, but these are the currencies that are most often used and profited from because they have the most demand and come from the most stable economies.
I hope that gets you started into learning about forex currency trading, but you should know that you will always need a good proven system to make a profit in this volatile market.
And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/
From Jason Fielder – Founder, ForexImpact.com
Two Types Forex Brokers: Which Forex Broker is Right for You?
June 26, 2008
There are two types of Forex brokers, and which is best for you can depend on your trading strategies. There are Market Makers (MM) and Electronic Communications Network (ECN).
Market Makers (MM) are brokerage firms that set both the asking price, and the bid price. No matter if you are buying or selling, the MM is your trading partner and taking the other side of that trade.
Electronic Communications Networks (ECNs) take the bid and ask prices from several different market participants (such as individual traders, banks, MMs) and then the bid and ask prices are displayed as bid/ask quotes. When you place an order to buy, it’s matched with a sell order set at the same price. If there is no match, then your order simply will not be executed. Unlike the MMs, the broker does not take the other side of the trade, it’s whatever trader wants to go the other way with the same currency pair.
Three positives of an MM:
- Most market makers have set spreads.
- Market makers normally have user-friendly, downloadable trading platforms that include free charting software
- MMs, since they are your trading partner, tend to guarantee that your orders will almost always be filled.
Three positives of using an ECN:
- The bid/ask prices are normally better because there are multiple sources used to derive them.
- You can make trades within the spread itself and take the role of an MM.
- Prices are more volatile, which is better for scalping.
Many traders who use diverse styles of trading will have accounts with both. In fact, I have accounts with both. Knowing the differences between these broker types will help you know how to have the best set up for each type of trading strategy your system calls for you to use.
And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/
From Jason Fielder – Founder, ForexImpact.com
Choosing a Forex Broker - 9 Questions to Ask Every Forex Broker
June 26, 2008
Looking for a Forex broker can be a difficult search for traders who just don’t know where to look. If you are looking for a broker, then there are certain questions you need to be sure to ask prospective brokers to make sure you find the reputable broker you wish to work with. There are more questions that are good to ask, and each person may have others they want to add to the list, but these are a great base for what you will need to ask to make sure the brokerage firm is one you actually want to consider.
- What regulatory authority is your brokerage firm registered with, and in what country? The NFA (National Futures Association) audits books and is one of the best current regulators. The Forex market is currently far less regulated than stocks, bonds, and commodities—and so this is a very important question.
- How fast is the order execution? It should be a second or less than a second. With modern technology there’s no reason for it to take any longer.
- Are you attached to any bank or lending institution? Banks are more heavily regulated, which gives extra peace of mind, as well as financial security.
- What country is your corporation held? The right answer is any country with strict banking laws and oversight. The wrong answer is anywhere else.
- What type of a broker are you? There are Market Makers (MM) and Electronic Communications Networks, and you’ll want to know the difference between the two and which fits your needs best.
- What is the minimum account trading size? This is important to remember to make sure your position isn’t closed out because you’re short on funds to cover.
- What is the margin requirement? 1% is standard, but lower is better. The more control you have, the better.
- Is my money held by a public or private company? You want it held by a public company, because they are insured. If a company goes bankrupt, you have a better chance of getting your money back.
- How long have you been in business and how many clients do you have? Obviously the longer they have been around, the better the sign. Having a large number of customers for a long time can also help to allay any fears.
If you ask these questions, you’ll be much more likely to find the right brokerage that works for you.
And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/
From Jason Fielder – Founder, ForexImpact.com
Forex Winners - 5 Tips to Forex Trading Success
June 26, 2008
Forex trading is where the big money is for traders, but the currency market can also be a place where you can lose a fortune if you don’t know how to approach it right. Making a profit at Forex trading takes many different factors going the right way, but here are five tips that will help you be a Forex winner instead of a Forex loser.
1) Don’t trade on emotion. There is no place for worry, panic, gut feelings, feelings of invincibility, or anything else here. You don’t make trades based on gut feelings or what you want to see happen. You need to trade using the fundamentals and technicals. You can’t be scared or overconfident.
2) Lots of Analysis. If you have one method of technical analysis saying you have a good trade, that’s only a start. If you have three, then you’re really on to something. It’s not always necessary to get multiple confirmations, but it does help.
3) Follow the indicators. When it’s time to enter a position, don’t wait and see if it starts trending the way you predict. Just enter the market. Likewise, when it’s time to get out, get out.
4) Use a proven trading system. This one can’t be emphasized enough. Especially if you’re just starting trading the Forex market, you will want to use a system that has been used and proven to work over a long period of time.
5) Don’t try to “outsmart” the market. Some of the best investing minds in the world have lost millions trying to dictate what the market will do or to “outsmart it.” There is no holy grail of perfect trading patterns. Learn how the markets work and choose a system that fits your personality.
Use these five tips and you’ll be on your way to being a Forex winner!
And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/
From Jason Fielder: Founder, ForexImpact.com
Global Economic Calendar: October 12 - 17, 2008
June 25, 2008
Forex Profit Alert: June 25, 2008
June 25, 2008
The Fed released their FOMC interest rate decision during today's session. The rate was held at 2.00%. After the initial market movement, the news was bearish on the dollar causing the EUR/USD and GBP/USD to move higher. The USD/JPY and USD/CHF moved lower on the news.
The USD/JPY has formed its second doji bar in the past two sessions. Look for a breakout to occur.
We have 8 new pivot trades going into the next session.
Moving Average Mania: Using Multiple Moving Averages with ADX to Trade
June 25, 2008
Have you ever snorted an unknown brown powder in a beer house in Germany?
Have you ever met someone that asks a lot of questions and then wants proof of the answers? That person that just has to find out on their own; to a large extent that is how I am. I wish I wasn’t, it would make my life a lot easier, not as exciting; but easier none the less.
I remember right after college when my roommate and I went backpacking through Europe. It’s a funny thing that people say “backpacking” across Europe. Yes we had backpacks but there was very little backpacking, mostly riding on trains. Anyway, I digress; we were sitting there in Munich, Germany, at the famous Hofbrauhaus (beer house) drinking a beer or two.
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Forex Trading Education - Learn the Markets
June 25, 2008
One of the major parts of learning to become a successful Forex trader is getting a proper Forex trading education. The Forex market is a difficult thing to master and there are so many variables that affect every single currency pair. It’s almost always more complex than many beginners imagine, but that doesn’t mean that it’s impossible to become a successful Forex trader or that you need to be some kind of rocket scientist to pull it off. Getting a good Forex trading education is the first step, and that’s available to anyone who is willing to work and invest in themselves.
There are many different ways to get a good Forex trading education. There are tons of free resources online, but make sure to check each one to see how reliable it is. If every other paragraph is touting a new fool proof system, look somewhere else. There are many free Forex e-books online that will at least outline the basics of the Forex market and help you become familiar with how trading works. Many member sites or trading systems will also offer a similar free e-book as a sign up gift.
There are some absolutely excellent print books out there, as well, and Forex trading forums online. While the information coming from forums is worth a grain of salt (as is the case with any online forum interaction) you can often get good information on basic websites to check up on, print books that are excellent teaching tools, and warnings on sites or paid programs that are scams.
Forex trading is not an area where a trader can get lucky and profit. The traders who are smart, have a good system, and have an in depth and respectable Forex education are the ones who are going to prosper. Whether you are a green newbie who has only just heard of Forex trading, or a long time trader who has done pretty well, there is always room to learn more and to refine your skills. Only a solid Forex trading education offers that.
And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/
From Jason Fielder: Founder, ForexImpact.com
Trading Bar Patterns: Profitable or not, that tis the question?
June 25, 2008
Recently while reading, I came across several bar groups that are used to predict short term direction of the market. Of course if you know the direction of the market, then you can use these bar groupings to make short term trades. This is no new idea, but the writer stated that these bar patterns would work in any market. That’s when I thought to myself: The Forex, we will see?
Bar groups or patterns use the inter-bar High, Low, Open, and Close relationship with each other. These relationships are supposes to paint a picture as to what the market is doing. For example, one pattern might signal that consolidation is occurring. Another bar group could be showing where resistance has come into the market. While yet another, could be displaying where support is in the market.
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Forex Profit Alert: June 24, 2008
June 24, 2008
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