Why Forex Is A Great Trade
The Forex market seems to be one of the hottest markets right now.
Let's take a look why
It takes small amount of capital to get going and you get leverage with it.
This is important because a lot of people entering the market are looking for ways to make money and not just to invest their spare cash.
Leverage means that you can use other people's money to make your investment bigger. Not to try to scare you but this also introduces greater chance for Loss. This is not for the faint hearted or people not willing to learn how to trade, understand their trading phycology and follow money management rules. Having been duly warned please keep reading about the great potential and positive aspects of Forex trading.
Leverage is a very powerful tool to make money very quickly.
The Forex Market is the largest in the world worth more than a Trillion dollars a day. This is important for many reasons:
It provides amazing liquidity. There are always people ready to buy and sell so you can always enter and exit your position easily. Smaller markets may not always give you the ability to exit your trade so easily.
It is difficult for larger players to influence the market. In the stock market the larger players can influence a particular stock and cause movement just by their trades.
The sun is always shining somewhere.
There is always trading going on 24 hours a day Monday to Friday. It goes from city to city following the sun. Plus you still get your weekends of to relax. With stocks the markets closes and news is released and the stock can gap at the open leaving you in a worse position. When you can trade a very liquid market open 24 Hours it makes it a whole lot easier to manage your positions and relax.
You are trading so that you can have a better life right?, not just stuck in front of a computer. It is important to get clear on why you are trading or you can just be just swapping one situation for another and not really improving your life. Pep talk over with let's get on with it.
Stocks may go in sideways movements and suddenly rush up or down and there are a lot of stocks to choose from. Sure there is some stocks renown for being volatile but it is easier to find consistent volatility in the Forex market. The market is always moving so there are always plenty of opportunities for day trading
So I obviously think that the Forex Market provides great opportunity for people to enrich their lives. It gives people willing to learn a little a great lifestyle that many will envy.
I hope that you enjoyed that simple summary. There are many more great reasons to trade forex.
Factors Involved In Becoming A Successful Forex Trader
These days everyone is talking about Forex trading and the great opportunity this activity represents for people willing to brake free from the corporate world and start working from home or any where else without losing their current lifestyle and even improving it.
Forex trading has changed dramatically in the last 10 years thanks to the technological advancements of the internet era. With real-time streaming technology and faster and more efficient computer systems, almost anything, from roses to FX trading, is available at the click of a button.
Some of the great reasons why Forex trading is a great way of entering the capital markets is that your trades are all commission-free and it has a low transaction cost. All the best forex brokers have these characteristics and even Mini FX traders (i.e., traders starting with accounts having a capital as low as $250), who are just starting in this field, can buy and sell currencies online always commission-free.
But one thing is to start Forex trading and other very different is becoming a profitable Forex trader. In order to become a profitable trader the new trader will immediately discover the imperative need of having an accurate knowledge of the markets and a good understanding of the forex technical indicators. Concepts as Moving Averages, Fibonacci levels, Bollinger Bands, etc; are the basic knowledge every trader must have.
But having a good knowledge of these concepts is not everything you need. Fear is one of the worst enemies of the Forex trader. In order to become a profitable trader it is essential that the person involved in trading understands that he must leave fear aside and stick to the trading plan he has constructed and arranged before, always understanding that losing trades happen to everyone and they are always part of a profitable trading career. A forex trader must learn how to profitable use his stops without heavily compromising the capital in his trading account, i.e., he must play safe but realizing that a calculated risk must be undertaken in order to maximize profits.
In short knowledge is the key to a successful trading career but it also must go along the proper psychological preparation of the trader in order to be able to tame the markets and become a profitable trader.
Understanding Forex 4 Money Management
This is a series of articles about The Foreign Exchange Market. You will learn here what Forex is , how it works and how profitable it can be. The whole series contain the following articles . . .
1.What is Forex
This is one of the most important aspects of a good trading system. Even if your market forecasts are accurate, you may still not be profitable in the long run unless you implement proper money management techniques.
Money management refers to how you manage your trading capital. It has to do with how much money you invest on each trade. Also, how much do you expect to make on each trade compared to how much you are risking. Furthermore, you can also use different kinds of orders that allow you to manage your trades automatically like stop loss, limit order and trailing stop.
In my opinion the two more important aspects of money management are position sizing and expectancy. Position sizing refers to the size of your positions. You should not risk more than 1% - 2% per trade.
Expectancy refers to how much do you expect to make vs how much you are willing to lose. The expectancy should be always positive. For example, if you enter a position and you expect to realize a 50 pips profit while you are willing to lose only 15 pips, that's positive expectancy.
The example above means that you can be wrong three times in a row and still be profitable the fourth time. A method to implement positive expectancy on your trading strategies is by using trailing stops. I will explain this now and the other orders that I mentioned above.
Let's start with a stop loss order. This one helps you automatically close a losing position and prevent it from decreasing your total trading capital. Why you need stop orders? Many things could go against you and make you lose big time.
The platform you are treading on could freeze. The place/computer you are trading from could go off power. Market news could drive the price of currencies mad quickly. Do you get the point? Many people use stop loss orders just as an "insurance" against these events taking place.
Something else a stop loss order could be good for is to establish an automatic trading system. Some trading systems do not require you to be in front of your computer all day. You can set them on autopilot and let the market/platform do its thing. If the market moves against you, the stop loss will be triggered and your losing position will be cancelled automatically.
The second order mentioned above is the limit order. This one is good to automatically take a profit once the price of the currency pair has moved to a desired level. You can use a limit order for the same purpose you use a stop loss order. It is good to automate your trading in general. Once the target price is reached, the limit order will be triggered canceling your winning position and preventing it from turning into a losing position.
Now, something very important about trading "cut your loses short, let your winners run." Most traders do this the other way around. That's why they lose in the long run.
Some of the easiest ways you can implement this technique is by using a trailing stop. These kinds of orders let you get positive expectancy, which is one of the most important aspects about money management as mentioned above.
A trailing stop is like a limit order and a stop order at the same time. For example, let's say that you enter a position and the market moves in your favor. Then notice what happens.
With a trailing stop you have a chance that you don't have with a limit order. If the market keeps moving in the direction you expected, the trailing stop order will move with the market. This way there is no limit to how much profits you can get. On the other hand if after moving in your favor the trend retraces a certain percentage, the trailing stop will be triggered canceling the position and preventing it from turning into a losing trade.
These are common techniques used in most successful trading systems. You can learn other important aspects about Forex like technical analysis and fundamental analysis from other articles on this series.
Real Forex Traders Learn To Like Losses
As a forex trader you have to learn how to take losses. Period. Don't be a crybaby. Learn how to take losses.
Learning how to take losses is one of the most important lessons you must learn if you want to survive as a trader. Nobody is 100% right all the time.
Losses are inevitable. Even Michael Jordan and Tiger Woods lose sometimes and they're considered the best in their field.
There will be trading streaks where you'll have a number of successful consecutive trades, but that will eventually come to an end you will take a loss.
As that point it's very important not to lose your head, you must remain in control of yourself. Don't have a cow man.
Take a break. Calm down and relax. Take a chill pill dude.
Until you've regained a clear mind and an ability to think logically again, stay out of the market.
Don't whine about your loss and never carry a prejudice against a loss.
The key to manage losses is to cut them quickly before a small loss becomes a large one.
I repeat. The key to manage losses is to cut them quickly before a small loss becomes a large one.
Never ever think that you will never lose. That's just ludicrous. Losses are just like profits, it's all part of the trader's universe.
Losses are unavoidable. Get over the loss and move on to the next trade.
Forex Is The Best And More Lucrative Home Based Business
The first reason why you should trade the forex market is because it is the most lucrative home based business. Although It is not a new market, it is still unknown by non traders. It is more amazing when you know that most of the traders are not aware of the huge opportunity of the forex. The Forex or Foreign Exchange Currency Market is open to the public since 1998.
With the economic situation today and the fear of most of the people worldwide to wake up a morning and be jobless, without resources to feed their family, there is an increasing need in lucrative home based business.
On another hand, it is really difficult to find a real opportunity which will allow you to make a living from your home computer. You got to put hours of recherches and invest some hard earned money, with the fear of being involved in a scam company.
Let' s say you found a good opportunity, and honestly, there is a lot of legitimate business you can make a lot of money if you are serious. But, is that what you really want? Most of the opportunities on the web today, even if you make big profits, are held by someone else. That mean that when you participate in those turnkey businesses, you do not have any control.
It is really amazing to see all these people who want freedom, more time with their family and friends, more time for their favorite hobbies... and the most important, fire their boss, going the same way.
To understand, they want to be free, they found that on the web you can make money and be free, all that they need, but if you look at the situation, 80% of these people fired their boss, to meet another boss on the Internet! A virtual boss, who is making them work, but they don't feel it, because they have the impression to be free, they work wherever and whenever they want, and better than all that, they have never seen their boss.
People make money in these programs, they may win $5000 a month or more but actually, the owner of the program is making tons of money.
There is a way to make much more money on the web that you think now, and Internet seekers and people in general should discover trading, specially the forex market. While the word market could intimidate some people, believe it, no one must be afraid about that, and think about the difficult stock market, or commodities, futures...
The forex market which is also called FX is not really as difficult as it seems.
There is not that much technical vocabulary to learn, and the risk is considerably low, if you compare to the other markets like the stock for instance.
The fact that home businesses seekers should really consider is that you can choose at which time to trade, and where you want to trade; you need only an Internet connection, and that's it, you are ready to tape in the biggest market of the world with $1,5 trillion activity everyday in the same way banks and large corporation do it and it is not difficult at all. Rather it is simple, and the methods already tested by serious traders will help you in your adventure.
The Benefits Of Fx Trading
Many people are looking at getting into day trading, and start with studying the Stock Market, and the different stock exchanges. What many don't realize is that there are different markets and financial instruments that one can profit from. One market that has recently become available to the public to trade is the Foreign Currency Exchange, the FOREX.
The foreign exchange market is the largest financial market in the world. It trades upwards of 2.5 trillion dollars per day, which is approximately 1000 times the volume of the New York Stock Exchange. Quite easily, the foreign exchange market dwarfs the stock market of any country.
So, where is the foreign currency market? Well, unlike the stock exchanges of the world. The foreign currency market is a virtual market that is connected by the internet, phones, and fax.
The advantage of having a worldwide currency market is that it is open 24 hours a day, 5 days a week. Living in the USA, one could trade 24 hours per day Sunday 5pm to Friday 4pm EST. One can only trade stocks during normal market hours, so for those that have jobs during the day, the FOREX market is much more accessible as trading can be done at night or early in the morning before going to work.
Other benefits of the foreign currency exchange include:
1.High Leverage: Currency brokers usually give their traders 100:1 leverage, meaning that if there is $1000.00 in ones account, they will let one control $100,000.00, which allows currency traders to reap large gains from relatively small price movements in the market.
2.High Liquidity: Because the currency market is the largest market in the world with huge daily volumes, one is always able to get in and out of trades as liquidity is never an issue.
3.Stops are always honored: Except in extremely volatile markets, which is rare, limits and stops are always honored. Because of the market's liquidity and 24 hour continuous trading periods, dangerous trading gaps are eliminated altogether. Orders are executed very quickly, without slippage. In the stock market, it is much more frequent that stops get skipped over as stock prices plummet, but in the FOREX, one can be much more confident that the stops are honored.
4.Entry orders are instant: There is no lag time in placing an order. Orders are processed instantly at the current market price, or the price at which you set the order to enter the market in the future.
5.No Commissions: There are no commissions in currency trading, the broker just takes a small difference between the bid price and the ask price as its fee for the transaction.
As currency markets are some of the most volatile markets, many fundamental variables such as weather, and war affect the price of the currency, however, since there is no one apparent reason much of the time for price movement, the fundamentals get discounted and one can use an almost purely technical approach to trading. This is why the FOREX is considered one of the most predictable trending markets that follows technical analysis methods more than any other market.
As one can see, there are many great benefits to using the FOREX as a highly profitable financial instrument. One can trade from home in their spare time, but first it is important to get a solid education in learning specific FX trading methods. Before trading in a live account, it is important to first get educated using books, or online courses. There are many courses online selling for upwards of $3000.00, but it is not necessary to spend that kind of money to get a good education. Usually the expensive courses come with DVD's and other expensive items that raise the price. Much of the time one can find a course for under $500 that teaches the exact same content for much less money.
Wishing You Success in Trading!
Helpful Forex Strategies To Become A Successful Investor
As currency trading has become one of the most recent ways of earning money, a large chunk of people take this option just as a hobby. This type of trading is performed by exchanging currency of one country with that of another. Currency trading, Forex trading signal, Forex trading strategy, and Forex alerts have made this industry the largest one if one is to consider its trading volume. To understand it better, let us take an example of an inter-bank trading. Bank X will take the quote from Bank Y of its currency, and Bank Y will provide the present rate of its currency. A deal will be finalized if Bank X will like the rate of Bank Y. and if the currency of Bank X rises against the currency of Bank Y, the former will enjoy the difference as its gain. Likewise individuals deal in the exchange of currencies in the Forex market and act according to the market position.
The Foreign Exchange market is popularly known as "Forex", which has become the largest and frequently rising market in the whole world. It is also called as the transnational market as any person from any part of the world can enter into this market through the use of World Wide Web. Forex trading signal, Forex trading strategy and Forex alerts are carried out in the faith that the prices of the currency will change over a period of time, and the Forex traders will earn a profit if there is a rise in the value of bought currency and that of the selling currency.
There are various Forex trading strategies that should be followed by every Forex trader in order to gain a large number of profits. This Forex strategy system includes:
Trading The Forex Market Offers You Huge Leverage On Your Time And Money
More and more people are beginning to hear about FOREX trading. FOREX stands for FOreign Currency EXchange Market. It was once available only to the large banks, multinational corporations, governments,and other financial markets and institutions; however it was de-regulated in 1997, and now anyone may participate.
Many with experience in stocks and/or commodities trading who have then discovered FOREX, prefer it for its many advantages over stock and commodity trading. Many who have never invested before are also now
successfully trading the FOREX market.
The FOREX market is open 24 hours a day, except weekends, so you can participate whenever you have time. Trading is now done online and transactions are almost instantaneous.
The FOREX market offers 100:1 leverage, so you can control large amounts of money on the market while using much less of your own money. You can start with a mini-account for as little as $300, and with a strategy, steadily build your account and confidence, until you can open a regular account. You can grow that $300 seed to substantially more money in 6 months with the right application of sound strategy. And, you can set the level of risk you're willing to accept; and you can do this with very minimal risk.
FOREX is the world's largest, most liquid trading market. It is the best trending market, moving in the same direction (up or down) over 78% of the time, and you can learn to profit on either trend. Technical analysis works very well in this market, and there are many tools that aid in this.
Because most FOREX trading is focused on 7 major currencies, you have much less to learn than when trading stocks or commodities. Of course you'll want to learn as much as you can about FOREX, but this can be done to your satisfaction much sooner than you might think. There are many training courses and also lots of free information available on this subject.
FOREX trading is fun and challenging, and FOREX is quickly becoming one of the investing world's hottest, most rewarding opportunities.
Learn more about FOREX, and take your wealth development into your own hands if you want to accumulate real wealth!
Yes You Can Start Trading Forex For Free
Yes, it's 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 won't 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 can't 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.
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