Your Guide To Successful Forex Trading

If you were wondering; forex trading is nothing more than direct access trading of different types of foreign currencies. In the past, foreign exchange trading was mostly limited to large banks and institutional traders however; recent technological advancements have made it so that small traders can also take advantage of the many benefits of forex trading just by using the various online trading platforms to trade.



The currencies of the world are on a floating exchange rate, and they are always traded in pairs Euro/Dollar, Dollar/Yen, etc. About 85 percent of all daily transactions involve trading of the major currencies.



Four major currency pairs are usually used for investment purposes. They are: Euro against US dollar, US dollar against Japanese yen, British pound against US dollar, and US dollar against Swiss franc. Right now I will show you how they look in the trading market: EUR/USD, USD/JPY, GBP/USD, and USD/CHF. As a note you should know that no dividends are paid on currencies.



If you think one currency will appreciate against another, you may exchange that second currency for the first one and be able to stay in it. In case everything goes as you plan it, eventually you may be able to make the opposite deal in that you may exchange this first currency back for that other and then collect profits from it.



Transactions on the FOREX market are performed by dealers at major banks or FOREX brokerage companies. FOREX is a necessary part of the world wide market, so when you are sleeping in the comfort of your bed, the dealers in Europe are trading currencies with their Japanese counterparts.



Therefore, it is reasonable for you to believe that the FOREX market is active 24 hours a day and dealers at major institutions are working 24/7 in three different shifts. Clients may place take-profit and stop-loss orders with brokers for overnight execution.



Price movements on the FOREX market are very smooth and without the gaps that you face almost every morning on the stock market. The daily turnover on the FOREX market is somewhere around $1.2 trillion, so a new investor can enter and exit positions without any problems.



The fact is that the FOREX market never stops, even on September 11, 2001 you could still get your hands on two-side quotes on currencies. The currency market is the largest and oldest financial market in the world. It is also called the foreign exchange market, FX market for short. It is the biggest and most liquid market in the world, and it is traded mostly through the 24 hour-a-day inter-bank currency market.



When you compare them, you will see that the currency futures market is only one per cent as big. Unlike the futures and stock markets, trading currencies is not centered on an exchange. Trading moves from major banking centers of the U.S. to Australia and New Zealand, to the Far East, to Europe and finally back to the U.S. it is truly a full circle trading game.



In the past, the forex inter-bank market was not available to small speculators because of the large minimum transaction sizes and strict financial requirements.



Banks, major currency dealers and sometimes even very large speculator were the principal dealers. Only they were able to take advantage of the currency market's fantastic liquidity and strong trending nature of many of the world's primary currency exchange rates.



Today, foreign exchange market brokers are able to break down the larger sized inter-bank units, and offer small traders like you and me the opportunity to buy or sell any number of these smaller units. These brokers give any size trader, including individual speculators or smaller companies, the option to trade at the same rates and price movements as the big players who once dominated the market.






Original pictures take http://forexuseful.com/learn-forex-trading/forex-chart-patterns site

Your FOREX Trading Philosophy

"Easy money" is the allure that captivates many beginning FOREX traders. FOREX websites offer "risk-free" trading, "high returns", "low investment." These claims have a grain of truth in them, but the reality of FOREX is a bit more complex.



Mistakes Of The Beginning Trader



There are 2 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 money. FOREX traders must have a rational trading strategy and not make trading decisions in the heat of the moment.



Understanding Market Movements



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? This will allow you to identify successful trading strategies and use them.



Accountability



There are 5 major groups of investors who participate in FOREX: governments, banks, corporations, investment funds, and traders. Each group has its own objectives, but 1 thing all 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.



Large organizations and educated traders approach the FOREX with strategies, and if you hope to succeed as a FOREX trader you must follow suit.



Money Management



Money management is an integral part of any trading strategy. Besides knowing which currencies to trade and how to recognize entry and exit signals, the successful trader has to manage his resources and integrate money management into his trading plan.



There are various strategies for money management. Many rely on the calculation of core equity -- your starting balance minus the money used in open positions.



Core Equity And Limited Risk



When entering a position try to limit your 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 $1,000 to $3,000. You do this with a stop loss order 100 pips (1 pip = $10) above or below your entry position.



As your core equity rises or falls, adjust the dollar amount of your risk. With a starting balance of $10,000 and 1 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.



Greater Profit, Greater Risk



You should also raise your risk level as your core equity rises. After $5,000 profit, your core equity is now $15,000. You could raise your risk to $1,500 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.



These are the kinds of strategic tactics that allow a beginner to get a foothold on profitable trading in FOREX.






Original pictures take http://forexuseful.com/learn-forex-trading/forex-chart-patterns site

Yes, You Can Start Trading Forex For Free!

Yes, its true, you can trade the forex markets for free and using the same state-of-the-art software packages that professional Forex traders, around the world, are currently using to make real-time, live currency trades.



And you can also experience the same dynamic market action and go through the same process of making decisions based on breaking news, reacting to charting patterns, and tracking ones performance the same way professional Forex traders do.



And all this can be done even if you don't put any real money into your account, you wont see any difference in how the market behaves and how you react to the market. In short, at some point, every new forex trader needs to start Demo-trading.



Once you start placing demo trades, you will learn a lot about how Forex transactions are placed. I cant emphasize you enough, that this is a very important step for you in order to be able to learn how to become a trader. A demo account allows one to become familiar with trading procedures, such as placing Market, Limit, Stop, OCO Orders without any risk. All dollar losses or gains on a demo account are imaginary but, as mentioned above, the trading experience you acquire is not.



You should notice that making big gains in a demo-account does not guarantee profits in live trading; however, those who are not successful trading on paper rarely are successful when money is on the line. So, yes, just playing around and getting familiar with a demo account can be a great learning experience; however, you will not learn how to become a trader this way. You need to have a trading strategy.



Once you sign up for a mini-demo account, you will need to try one of the trial charting packages from the broker you choose. Any demo software you choose will do because they all have the necessary indicator tools you need. Once you have downloaded the software you can then set up your demo account and start drawing trendlines, marking support & resistance levels, monitoring moving averages, etc. This is also a very good way to get used to how orders are placed. Once you have a real trading system, you will already know how to place orders properly.



And remember, everyone makes mistakes placing orders. So you need to experiment before in a demo account so you can make your mistakes without losing any real money.






Original pictures take http://sharkinvestor.com/ site

World Events and Wise Forex Trading.

Forex trading has the great potential of becoming a profitable and fulfilling career that will let you have a lifestyle that few other lucrative activities in the world can offer to people from many roads in life and without asking any of those men and women for a diploma or some special certification.



But Forex trading is not easy; it may be simple to enter and place your first trade but becoming a profitable trader is a different thing. You will need to acquire the right knowledge and techniques in order to understand and know when to enter or leave a trade always fulfilling the main objective every trader must have; making money.



There are two kinds of analysis you can perform on the Forex markets. They are known as technical analysis and fundamental analysis. It is common that traders tend to divide themselves into technical and fundamentalists. Each group devoting themselves to the main tools each kind of analysis gives them.



Technical forex traders base their trading on the analysis of the charts and the number of indicators derived from the plots of price oscillations and patterns. Meanwhile Fundamentalists traders base their trading mostly on the fundamental numbers and economical indicators of countries economies. Though, even if divided, both tendencies tend to complement each other to some degree.



In this article I will place myself on the fundamentalists side and focus on one of the situations every forex trader must be aware of and don't let the events involved affect his trading efforts.



This risky situation is that when unprecedented chaotic world events start to develop as the trading day goes on. The power of the media (tv, internet, printed) can magnify and sometimes it may even distort the events taking place and impacting the trading journey in a significant manner. The result of this magnification and rapid diffusion of the news about the series of unfavorable events taking place is an increased atmosphere of fear, confusion and uncertainty in the trading world. And fearful traders are not prone to make the best trading choices because they have given themselves to panic and emotional reactions instead of reasoned and intelligent decisions.



If you need to have more specific examples of these kind of events you can search a bit inside your memories and consider the impact of just a few types of unfavorable chaotic world events as the political upheavals or corporate scandals of companies as; Enron, WorldCom, or of people as the case of Martha Stewart trial, etc. There is also the example of the terrorist attacks on Sep 11 in New York, March 11 in Spain, etc. Also natural disasters: tsunamis, earthquakes, floods, freezes, droughts, hurricanes along with wars can cause great disruption in a trading journey.



In short, every forex trader should be totally sure that his method of trading has built-in safe guards (stops, limit orders) to prevent a major financial loss from his trading account in case any of the unfavorable events I mentioned above ever takes place. And being realistic, many of those events will surely happen in the future.






Original pictures take http://www.forexcrunch.biz/viewtopic.php?f=8&t=36 site

Working The FOREX Market-The Basics

What Does FOREX Stand For ?

FOREX stands for Foreign Currency Exchange Market. It is gaining more and more interest

in the investing world, and for good reason. The FOREX Market is the largest market in the world

and can be accessed anywhere in the world. The FOREX Market's volume is over 1.5 Trillion, providing

almost infinate liquidity and flexability.



How do you trade?

Instead of trading "stocks" where there is thousands to choose from, you are trading pairs

of currency against eachother. This gives you an advantage because you can focus on just 2

pairs of currencies instead of countless stocks. You can trade from your home computer, or any computer

with an internet connection from anywhere in the world.



When do you trade?

The FOREX Market is open 24 hours a day so you can trade whenever you want! You just need a computer,

a Demo or Real Money account and a willingness to learn, research, and trade!



Why Should I Trade?

You should only trade if you are ready to change your mind about how much money you

CAN make and reach your full potential.

You should trade forex because its a great tool to leverage your time and replace your income.

Here are the benifits of Trading Forex:

You can work anytime you want 24 hours a day, 6 days a week. Its a continuous onine (electronic) that

never closess. Work at home, on the beach, or anywhere in the world!

You can trade foreign currencies on a high leveraged basis, sometimes up to 200 times your investment!

This is made possible by the higher levels of liquidity in the market.

Price movements are highly predictable! Fx Market trends generally repeat themselves, creating trends

that are easily predictable!

With all these benifits and tons of others, you can easily make $200 to $3000 dollars a day trading!

Too good to be true ? Let us prove you wrong for FREE!



There are many other AWESOME reasons to trade FOREX and you can learn them all by downloading our FREE E-Book!






Original pictures take http://www.supertradertv.com/ site

Winning Strategies With Forex Charts

As you read forex charts, remember that the two fundamental approaches for online forex trading: fundamental analysis and technical analysis.



Fundamental analysis doesnt rely on forex charts. It scrutinizes political and economic indicators to determine trades. Charts here are deployed as used as a secondary reference.



Technical analysis on the other hand, attempts to predict price swings by analysis of historical price activity. Those who use technical analysis study the relationship between price and time.



The most actively traded pair of currencies is the Euro and the US dollar, so we will use them in our example. The dollar is on the right hand side of the chart and the Euro is on the left hand side. The currencies are expressed in relationship to each other in pairing. Forex charges will always display how much of the currency on the right hand side is necessary to buy a unit of the currency on the left side. Looking at the typical EU-USD, chart you will notice the last price displayed per given date. This number is always emphasized. The time is tabbed horizontally across the bottom of a chart and the price scale is displayed vertically along the right hand edge of the chart. The time and the price are set in all caps to help the trader remember that technical analysis rests upon the relationship between time and price.



The trader observes the price and time movement on a chart. These include bars, lines, point and figure, and Japanese candle sticks-- the most favored method. With the candlestick method there is a large, red section that is the body of the candlestick. Lines protrude from the top and bottom and they are the upper and lower wicks. When you look at all the candles on a chart it is apparent that bodies come by difference sizes. Sometimes no body exists at all.



The same is true with wicks. Candle wicks come by many difference sizes; there may be no wick at all. The length of the body and the length of the wick are determined by the price range for the candle. Longer candles will have had more price movement during the time that they were open. The top of a candle wick is the highest price for that currency while the wicks bottom is the lowest price. A currency is bullish when the close of the candle is higher than the open. In simple terms this means that there were more buyers than there were sales during the opening time period. Sometimes the candles will not have wicks. The price opened and it dropped off until it closed.



Forex charts dont offer bullet proof trading hints, but they can help a trader. Past trends do have their place in forex trading as most traders will admit, and using the charts to track historical trends can assist a trader in making a snap decision.



The online investor typically joins a service that provides realtime charts that updates on currency activity. Charts can be checked on a minute to minute basis. For those who primarily do their trading based on historical accuracy this can ease the burden of prediction.



Most forex traders however use a combination of fundamental and technical analysis. They may chart historical trends, but they will also pay close attention to political, cultural and economic indicators within a region. They might use charts and other techniques to check correlation between political climate and currency fluctuations. But even the most sophisticated technical analysis software or tool has its limitations. A trader must be prepared to take risks and invest money that is not needed for the immediate future.






Original pictures take http://forextradingmania.pro/forex-trading-the-best-education-you-can-have/ site

Why You Should Trade FOREX Over Other Investments

Everyone has heard of stocks and shares, probably even the futures market, but trading the FOREX (Foreign Currency Exchange, or FX) market is a relatively new phenomenon. Until recently, FOREX was the domain of the banking fraternity (large banks can trade billions of dollars daily), and the elite in financial and business circles. But now it is possible for the average person to be a part of this incredible and very profitable way of making a living, thanks to the personal computer and an internet connection. All done electronically and considered an over-the-counter (OTC) market, trading is far easier and less risky than either the futures or the stock markets. Money can be made both on a rising and falling market, unlike the stock market, which relies on shares increasing in price to create profit.



More and more astute internet entrepreneurs are shunning the traditional financial markets and turning to FOREX trading. They know that it is possible to earn a full-time income from part-time effort if youd like to make $200 to $3,000 for as little as ten minutes work, and with minimal risk, then FOREX is for you.



FOREX, the spot (cash) market for buying and selling currency, is the largest financial market in the world. Every day more than $1.5 trillion (yes, trillion) is traded globally and, unlike the stock market, which has fixed hours, it is a market that never sleeps. Somewhere in the world, at any time of day or night, FOREX is open for business, six days a week. The market starts each day in Sydney and moves around the globe as other FOREX financial centers open: first to Tokyo, then London and New York.



In simple terms, currencies are traded in pairs, for example the Euro and the US dollar (EUR/USD). The first currency in this case the Euro is known as the base currency; the second currency (here, the US dollar), is the counter-currency. All trades result in the simultaneous buying of one currency and the selling of the other. Thus, in this example, if you place an order to buy the EUR/USD, you are buying the Euro and selling the US dollar. If you were to sell the pair, you would be selling the Euro and buying the US dollar. There are many other currency pairs, such as USD/JPY, GBP/USD, EUR/GBP, USD/CHF and so on.



What makes trading FOREX an incredible way to make money online, is that price movements are highly predictable, creating trends that can be anticipated when it comes to decide when to buy and sell. Contrasting with stocks and shares, FOREX trading through brokers is commission free. It is also possible and definitely recommended to open a demo (practice) account with a broker first, where you can learn to trade and gain experience before you part with a cent of your own money.



Do you want financial freedom? With huge advantages over other more conventional money markets, why not experience the excitement of pips, rollovers, leverage, lots, long and short positions, limit orders etc. and start to trade FOREX. Good luck!



Penelope Housden.






Original pictures take http://www.businessinsider.com/infographic-forex-explained-2012-6 site