A Beginners Education in Foreign Currency Trading
by Paul Bryan
Forex trading is the most lucrative trading in today's trade world and it seems everyone is ready to jump into the bandwagon of Forex trading. However, it is not as simple as it seems to be. To know how the Forex trade works, you need proper education about Forex and currency trading. Here comes in play the beginners education in Forex trading.
Beginners education in Forex trading is ideal training for those who are new in Forex and currency trading. This education lets you understand the basics of Forex trading, how it works, benefits of trading Forex and how to make profits by selling and buying currency pairs.
If you are a new player, you can do your homework with books available in the market. But the online sites offering beginners' education in forex trading has an advantage as you can do demo trading in simulated conditions to get the "feel" of the market with out bothering about profit or loss. You will be amazed to find that just after few trades, the complex concepts seem to start making sense and you begin to understand Forex trading.
Your beginners' education in forex trading site should provide:
Trading Basics Introduction to Forex Theories of exchange rate determination Economic Indicators Introduction to Technical Analysis
Primarily the beginners education in Forex trading should start with basics of the trading like the procedure, the actual market, definitions of terms used, frequently asked question, a forum and of course an online help desk. In this online help you should be able to ask your questions which will be answered by the professional experts.
See if you can pick up a program in online Forex trading that is being offered by a regulated brokerage firm. They are bound by federal laws to disclose all their transactions. You can find out their performance from Commodity Futures Trading Commission or National Futures Association Home Page.
The beginners' education in Forex trading service should allow you margin trading -- it is simply the trading with borrowed capital. This lets you open $10,000 or $100,000 positions with as little as $50 or $1,000. You can conduct large transactions, very quickly and cheaply, with a small amount of initial capital.
The education in Forex trading site should be supported with software that can instantly calculate the spread, your sell or buying price etc. The guide should make their predictions based on market trends and not on predictions or speculations.
A good beginner's education in Forex should offer real-time charts, technical analysis tools, real-time news and data, and software or website support. You should avoid such sites that offer limited information before you open the actual account.
About the Author
Paul Bryan operates Forex Reviews, News and Advice - A site aimed at bringing you the best and most independent Foreign Exchange information and articles.
Tuesday, January 30, 2007
Monday, January 29, 2007
FOREX Education - Building a FREE Trading System For Big Profit Part 2
FOREX Education - Building a FREE Trading System For Big Profit Part 2
by sacha tarkovsky
We have already introduced the concept of forex education and what to look for in part 1 of this article.
Here we are going to show you how to educate yourself for free and build your own trading system to build profits.
Let's look at the basic concepts of forex education and how they apply to building a method for free.
Let's start with the basics of a good trading system.
1. The big profits come from the longer term trends
As we have said in our previous article on forex education, one of the most important myths is that day traders make money - They don't.
Most get slaughtered.
To make money trading, it's obvious that currency trends reflect the overall health of the economy and major trends can last for several months or years.
So, whats the best way to trade to make money?
You guessed it - Focus on the longer term trends, NOT the short term noise.
2. Defining the longer term trend
The hard bit in forex trading is defining and staying with the longer term trend and not getting stopped out by the market noise.
3. The method
The method we are going to look at is simple to understand and simple to apply and consists of:
Using simple trend lines and other visual tools to determine the direction of the market and important points of support and resistance.
Note: You can't see the long term trend by using daily charts you must use weekly charts as well as they give the big picture.
It amazes me that a lot of forex education focuses on short periods of data, when currency trends last months or years.
You need to see the big picture and that means using the weekly chart.
Next is the hard bit.
Entering trades
To enter trades you need to have a market timing tool and the best by far is the stochastic indicator.
It's the ultimate momentum indicator when used with important support and resistance and we also like the Bollinger band as an additional filter.
4. Money management
Most traders are not wrong about market direction this is a myth.
The problem most traders have is there forex education is not good in terms of money management.
You need to be able to enter at the right time, exit correctly and stay with the trend and this is the hardest part of trading.
Most traders simply have no grasp of money management.
Our system will show you how to handle risk and keep you in the longer term trend.
5. Discipline
This is always spoken about when you read any forex education but its quite simple really.
If you have a system that's simple to understand and you have confidence in it you can follow it through the bad times.
Most traders simply blindly follow guru's and give up as they lose confidence.
Keep in mind if you don't have the discipline to follow your method you don't have a method at all and are guaranteed to lose
6. What's your edge?
This is a question any trader should ask themselves.
What makes you think you will be in the minority of winners?
If you don't know your edge - you don't have one!
A system for long term profit
So what edge does our system have?
It's geared to the longer term trend, trades infrequently, has money management to control risk but most importantly will take short term equity down turns to hold the big longer term trends.
You can decide for yourself by reading part 4 of this forex education series, where we will show you where to find info on the net to trade a system for profit
About the Author
MORE FREE BETTER TRADING INFO
On all aspects of becoming a profitable trader including info about legendary trader W D Gann who made a $50 million fortune trading go to our website for an exclusive forex trading systems visit our website at http://www.net-planet.org/index.html
by sacha tarkovsky
We have already introduced the concept of forex education and what to look for in part 1 of this article.
Here we are going to show you how to educate yourself for free and build your own trading system to build profits.
Let's look at the basic concepts of forex education and how they apply to building a method for free.
Let's start with the basics of a good trading system.
1. The big profits come from the longer term trends
As we have said in our previous article on forex education, one of the most important myths is that day traders make money - They don't.
Most get slaughtered.
To make money trading, it's obvious that currency trends reflect the overall health of the economy and major trends can last for several months or years.
So, whats the best way to trade to make money?
You guessed it - Focus on the longer term trends, NOT the short term noise.
2. Defining the longer term trend
The hard bit in forex trading is defining and staying with the longer term trend and not getting stopped out by the market noise.
3. The method
The method we are going to look at is simple to understand and simple to apply and consists of:
Using simple trend lines and other visual tools to determine the direction of the market and important points of support and resistance.
Note: You can't see the long term trend by using daily charts you must use weekly charts as well as they give the big picture.
It amazes me that a lot of forex education focuses on short periods of data, when currency trends last months or years.
You need to see the big picture and that means using the weekly chart.
Next is the hard bit.
Entering trades
To enter trades you need to have a market timing tool and the best by far is the stochastic indicator.
It's the ultimate momentum indicator when used with important support and resistance and we also like the Bollinger band as an additional filter.
4. Money management
Most traders are not wrong about market direction this is a myth.
The problem most traders have is there forex education is not good in terms of money management.
You need to be able to enter at the right time, exit correctly and stay with the trend and this is the hardest part of trading.
Most traders simply have no grasp of money management.
Our system will show you how to handle risk and keep you in the longer term trend.
5. Discipline
This is always spoken about when you read any forex education but its quite simple really.
If you have a system that's simple to understand and you have confidence in it you can follow it through the bad times.
Most traders simply blindly follow guru's and give up as they lose confidence.
Keep in mind if you don't have the discipline to follow your method you don't have a method at all and are guaranteed to lose
6. What's your edge?
This is a question any trader should ask themselves.
What makes you think you will be in the minority of winners?
If you don't know your edge - you don't have one!
A system for long term profit
So what edge does our system have?
It's geared to the longer term trend, trades infrequently, has money management to control risk but most importantly will take short term equity down turns to hold the big longer term trends.
You can decide for yourself by reading part 4 of this forex education series, where we will show you where to find info on the net to trade a system for profit
About the Author
MORE FREE BETTER TRADING INFO
On all aspects of becoming a profitable trader including info about legendary trader W D Gann who made a $50 million fortune trading go to our website for an exclusive forex trading systems visit our website at http://www.net-planet.org/index.html
FOREX Education - Getting The Right Education For Success PART 1
FOREX Education - Getting The Right Education For Success PART 1
by sacha tarkovsky
Consider this fact:
Despite the vast amount of FOREX education available, the bulk of traders still lose.
The reason for this is most of the accepted wisdom does not work.
Here we will look at the FOREX education you need and a simple system that's FREE That can make you big consistent profits.
Before we start looking at FOREX education itself, lets look at the equations you need to be successful trading FOREX.
Equation for success 1
Robust Method + Confidence + Discipline = Long term currency success.
Now, when you trade you need a method that's simple and you understand.
Why?
Because if you want to make money trading you are going to have short term losses and you need to the discipline to follow your method when these occur.
If you don't you will not have a method at all.
Many traders FOREX Education involves following systems they don't understand or gurus and they simply can't stick with them and fail.
Equation for success 2
Your method needs to have the following characteristics:
Liquidate losers quickly + Run Profits
Obvious one, but today people receive FOREX education that teaches them to trade short term and even worse day trade.
We have written about this in our other articles and it's a waste of time. You won't win, it will just be expensive FOREX education!
Why?
Because, the time frame is to short and moves are random.
You may have profits but you can't run them in a day and they can never cover your inevitable losses and high transaction costs you accumulate.
Avoid FOREX Education that teaches you short term trading unless you like losing your money
The Education You Need
Most of the education is free and on the net.
FOREX Education you don't need
There are of course many e-books and courses but most of these are worthless ( only buy one which has a real track record and the seller is a trader ) and there are few of these around.
In part 2 of this article we will cover a system you can learn yourself that is used by many of the worlds top traders and it's simple to apply and understand.
Learn this fact
There is no correlation between how complicated a method and how successful it is.
In fact, the opposite is true, the more complicated a system is the more likely it is to break in the face of ever changing brutal market conditions.
Finally, as we have said you need to understand how your method works (this is easier with a simple system) as you need confidence to follow it with iron discipline to eventual currency trading success.
Reading
The only material we recommend you buy is classic works by traders who have been at the sharp end and here are some good ones
Market Wizards & The New Market Wizards - Jack schwager
Great books!
Full of inspiration, as the top traders in the world share their wisdom on how they made millions or even billions trading FOREX and other markets
Anything By Jake Bernstein
Focuses on the importance of discipline and mental attitude a key to success.
Trader Vic - Vic Sperandeo
Perhaps my favourite book of all. Packed with common sense from cover to cover from one of the true great traders.
They will cost you about $50.00 and that's money well spent for the type of FOREX Education they give.
A system for profit
In part 2 of this article your FOREX education will continue, when we start looking at a specific method that you can apply for bigger FOREX profits and currency trading success.
About the Author
MORE FREE TRADING INFO ARTICLES PDF'S & COURSES
On all aspects of becoming a profitable trader including info about legendary trader W D Gann who made a $50 million fortune trading go to our website for an exclusive Gann Trading Course visit our website at http://www.net-planet.org/index.html
by sacha tarkovsky
Consider this fact:
Despite the vast amount of FOREX education available, the bulk of traders still lose.
The reason for this is most of the accepted wisdom does not work.
Here we will look at the FOREX education you need and a simple system that's FREE That can make you big consistent profits.
Before we start looking at FOREX education itself, lets look at the equations you need to be successful trading FOREX.
Equation for success 1
Robust Method + Confidence + Discipline = Long term currency success.
Now, when you trade you need a method that's simple and you understand.
Why?
Because if you want to make money trading you are going to have short term losses and you need to the discipline to follow your method when these occur.
If you don't you will not have a method at all.
Many traders FOREX Education involves following systems they don't understand or gurus and they simply can't stick with them and fail.
Equation for success 2
Your method needs to have the following characteristics:
Liquidate losers quickly + Run Profits
Obvious one, but today people receive FOREX education that teaches them to trade short term and even worse day trade.
We have written about this in our other articles and it's a waste of time. You won't win, it will just be expensive FOREX education!
Why?
Because, the time frame is to short and moves are random.
You may have profits but you can't run them in a day and they can never cover your inevitable losses and high transaction costs you accumulate.
Avoid FOREX Education that teaches you short term trading unless you like losing your money
The Education You Need
Most of the education is free and on the net.
FOREX Education you don't need
There are of course many e-books and courses but most of these are worthless ( only buy one which has a real track record and the seller is a trader ) and there are few of these around.
In part 2 of this article we will cover a system you can learn yourself that is used by many of the worlds top traders and it's simple to apply and understand.
Learn this fact
There is no correlation between how complicated a method and how successful it is.
In fact, the opposite is true, the more complicated a system is the more likely it is to break in the face of ever changing brutal market conditions.
Finally, as we have said you need to understand how your method works (this is easier with a simple system) as you need confidence to follow it with iron discipline to eventual currency trading success.
Reading
The only material we recommend you buy is classic works by traders who have been at the sharp end and here are some good ones
Market Wizards & The New Market Wizards - Jack schwager
Great books!
Full of inspiration, as the top traders in the world share their wisdom on how they made millions or even billions trading FOREX and other markets
Anything By Jake Bernstein
Focuses on the importance of discipline and mental attitude a key to success.
Trader Vic - Vic Sperandeo
Perhaps my favourite book of all. Packed with common sense from cover to cover from one of the true great traders.
They will cost you about $50.00 and that's money well spent for the type of FOREX Education they give.
A system for profit
In part 2 of this article your FOREX education will continue, when we start looking at a specific method that you can apply for bigger FOREX profits and currency trading success.
About the Author
MORE FREE TRADING INFO ARTICLES PDF'S & COURSES
On all aspects of becoming a profitable trader including info about legendary trader W D Gann who made a $50 million fortune trading go to our website for an exclusive Gann Trading Course visit our website at http://www.net-planet.org/index.html
All About Forex Currency Trading and Exchange
All About Forex Currency Trading and Exchange
by Paul Bryan
Today, the Forex market is the largest market in the world with more than 1.8 trillion dollars changing hands daily. With its attractive features like super liquidity, 24 hours market and better execution, it is also considered as one of the most striking and rewarding market. But is it very difficult to make money in the Forex market? Definitely not, provided you know all about Forex and currency trading.
In the Forex market, if you look at the performance graph of Forex brokers, you will see that some traders succeed while others fail to trade successfully. The main reason is lack of proper trading knowledge.
That means they are trading currencies but they don't know all about Forex and currency trading. Therefore it is very important to know everything you can about Forex and currency trading before you start trading in the Forex market.
If you want to know more about Forex and currency trading, start with fundamental analysis and technical analysis. These are two major things that will help you to understand when the market will move up, what is the right time to buy or sell currency pairs, how to gain more profits and what are the currencies to be traded.
Fundamental analysis includes world news, studying variables like monetary and fiscal policy, political conditions, trade patterns, economic indicators, inflation rates, unemployment rates etc.
On the other hand, technical analysis involves computer charting, using trend lines, support and resistant levels, reversals and numerous patterns, and studying the behavior pattern of market crowds to track and identify buying and selling opportunities.
As you enter into the realm of knowing all about Forex and currency trading, you will have a good idea about the major currency pairs that are traded in the Forex market. Among all the traded currencies, currencies that are most liquid and often traded along with the US dollar are:
European Euro Japanese Yen British Pound Swiss Franc Canadian dollar Aussie dollar
Generally the most commonly traded currencies are those of countries with stable governments, reputable banks and low inflation.
As you gradually come to gain knowledge, you will understand that your success rate will be high if you follow the Forex trading system. The system has its own discipline that it follows rigorously. The system will let you know what are the trades that have greater rate of success and will send signals accordingly.
The Forex market is global and it is a 24 hour market. You can access Forex market anytime; don't worry if it is night at your place, it will be daytime in some other parts of the world and trade is ongoing over there. So if you know all about Forex and currency trading, you can easily use your online currency trading system and start trading.
The major dealer centers and time zones are that of Sydney, Tokyo, London and New York. However, since the markets are interconnected, if any events occur at any hour, in any part of the globe, the investment community gets affected instantly.
Trading successfully in the Forex market is not an easy task. However, if you know all about Forex and currency trading your success rate will be highly influenced.
About the Author
Paul Bryan operates Forex Reviews, News and Advice - A site aimed at bringing you the best and most independent Foreign Exchange information and articles.
by Paul Bryan
Today, the Forex market is the largest market in the world with more than 1.8 trillion dollars changing hands daily. With its attractive features like super liquidity, 24 hours market and better execution, it is also considered as one of the most striking and rewarding market. But is it very difficult to make money in the Forex market? Definitely not, provided you know all about Forex and currency trading.
In the Forex market, if you look at the performance graph of Forex brokers, you will see that some traders succeed while others fail to trade successfully. The main reason is lack of proper trading knowledge.
That means they are trading currencies but they don't know all about Forex and currency trading. Therefore it is very important to know everything you can about Forex and currency trading before you start trading in the Forex market.
If you want to know more about Forex and currency trading, start with fundamental analysis and technical analysis. These are two major things that will help you to understand when the market will move up, what is the right time to buy or sell currency pairs, how to gain more profits and what are the currencies to be traded.
Fundamental analysis includes world news, studying variables like monetary and fiscal policy, political conditions, trade patterns, economic indicators, inflation rates, unemployment rates etc.
On the other hand, technical analysis involves computer charting, using trend lines, support and resistant levels, reversals and numerous patterns, and studying the behavior pattern of market crowds to track and identify buying and selling opportunities.
As you enter into the realm of knowing all about Forex and currency trading, you will have a good idea about the major currency pairs that are traded in the Forex market. Among all the traded currencies, currencies that are most liquid and often traded along with the US dollar are:
European Euro Japanese Yen British Pound Swiss Franc Canadian dollar Aussie dollar
Generally the most commonly traded currencies are those of countries with stable governments, reputable banks and low inflation.
As you gradually come to gain knowledge, you will understand that your success rate will be high if you follow the Forex trading system. The system has its own discipline that it follows rigorously. The system will let you know what are the trades that have greater rate of success and will send signals accordingly.
The Forex market is global and it is a 24 hour market. You can access Forex market anytime; don't worry if it is night at your place, it will be daytime in some other parts of the world and trade is ongoing over there. So if you know all about Forex and currency trading, you can easily use your online currency trading system and start trading.
The major dealer centers and time zones are that of Sydney, Tokyo, London and New York. However, since the markets are interconnected, if any events occur at any hour, in any part of the globe, the investment community gets affected instantly.
Trading successfully in the Forex market is not an easy task. However, if you know all about Forex and currency trading your success rate will be highly influenced.
About the Author
Paul Bryan operates Forex Reviews, News and Advice - A site aimed at bringing you the best and most independent Foreign Exchange information and articles.
FOREX Trading Advice - Which Is Best To Make Big Profits?
FOREX Trading Advice - Which Is Best To Make Big Profits?
by sacha tarkovsky
Many new traders want to take FOREX Trading advice to give them success, but what should they look for from an advisory service?
How do you pick FOREX trading advice that can make you profits?
Let's find out.
Here some of the things you should look for in terms of FOREX trading advice.
1. Know how the advisor makes trades
You will never make money following FOREX trading advice if you don't understand the logic the trades are based upon.
Why?
Quite simply any FOREX Trading advisory service will lose money at some point.
They all do, (don't believe track records that look to good to be true they probably are) so when the losses occur, unless you know how the advice is generated, you wont have the discipline to stay with it.
Currency trading success is based around the following equation
A logical method + the discipline to follow it = currency trading profits
If you don't have the discipline to follow the advice you will never make money and this comes from having confidence that a system can overcome losing periods and lead you to currency trading profits
2. Look for a real-time track record
A lot of FOREX Trading advice is presented with a hypothetical track record (lets face it we can all make a profit if we know past data) and they all look great but the acid test is trading in advance.
Look for a real time track record of the advisor making money in currencies. That's real dollars and account statements.
Today, many e-book writers offer advice with simulated track records and simply appeal to the greed and stupidity of buyers - Don't fall into this trap.
Get a real time track record and make sure the advisor has put their money where their mouth is and have a track record of success.
No track record? Then don't buy - PERIOD.
3. Does the advisors strategy suit your mentality?
Does the FOREX trading advice suit your trading mentality?
For example, they may make 100% annual gains but with 80% drawdowns at times.
Can you cope with this?
Or
Are you happier with lower profits and lower drawdowns?
Some traders like to preserve their capital and others like to be more aggressive, so only pick a FOREX advisory service where you can cope with the worst drawdown (peak to valley) they have had in the past.
4. Look for a satisfaction guarantee
Most reputable sellers of FOREX trading advice will give you a satisfaction guarantee if not delighted, so only buy from one who does.
Final words
There is some great FOREX Trading advice you can buy but you need to be careful to get a service that has made money, to inspire confidence and one that suits your trading mentality.
About the Author
MORE FREE BETTER TRADING INFO
On all aspects of becoming a profitable trader including info about legendary trader W D Gann who made a $50 million fortune trading go to our website for an exclusive Gann Trading Course visit our website at http://www.net-planet.o
by sacha tarkovsky
Many new traders want to take FOREX Trading advice to give them success, but what should they look for from an advisory service?
How do you pick FOREX trading advice that can make you profits?
Let's find out.
Here some of the things you should look for in terms of FOREX trading advice.
1. Know how the advisor makes trades
You will never make money following FOREX trading advice if you don't understand the logic the trades are based upon.
Why?
Quite simply any FOREX Trading advisory service will lose money at some point.
They all do, (don't believe track records that look to good to be true they probably are) so when the losses occur, unless you know how the advice is generated, you wont have the discipline to stay with it.
Currency trading success is based around the following equation
A logical method + the discipline to follow it = currency trading profits
If you don't have the discipline to follow the advice you will never make money and this comes from having confidence that a system can overcome losing periods and lead you to currency trading profits
2. Look for a real-time track record
A lot of FOREX Trading advice is presented with a hypothetical track record (lets face it we can all make a profit if we know past data) and they all look great but the acid test is trading in advance.
Look for a real time track record of the advisor making money in currencies. That's real dollars and account statements.
Today, many e-book writers offer advice with simulated track records and simply appeal to the greed and stupidity of buyers - Don't fall into this trap.
Get a real time track record and make sure the advisor has put their money where their mouth is and have a track record of success.
No track record? Then don't buy - PERIOD.
3. Does the advisors strategy suit your mentality?
Does the FOREX trading advice suit your trading mentality?
For example, they may make 100% annual gains but with 80% drawdowns at times.
Can you cope with this?
Or
Are you happier with lower profits and lower drawdowns?
Some traders like to preserve their capital and others like to be more aggressive, so only pick a FOREX advisory service where you can cope with the worst drawdown (peak to valley) they have had in the past.
4. Look for a satisfaction guarantee
Most reputable sellers of FOREX trading advice will give you a satisfaction guarantee if not delighted, so only buy from one who does.
Final words
There is some great FOREX Trading advice you can buy but you need to be careful to get a service that has made money, to inspire confidence and one that suits your trading mentality.
About the Author
MORE FREE BETTER TRADING INFO
On all aspects of becoming a profitable trader including info about legendary trader W D Gann who made a $50 million fortune trading go to our website for an exclusive Gann Trading Course visit our website at http://www.net-planet.o
Forex Training: How to Read a Forex Quote
Forex Training: How to Read a Forex Quote by Gregory DeVictor
Forex is an abbreviated name for "foreign exchange." The Forex market is a non-stop cash market where the currencies of nations are bought and sold, typically via brokers. For example, you buy Euros, paying with U.S. Dollars, or you sell Euros 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 often result from economic and political factors, such as the price of oil or political unrest. To better understand how the exchange rate can affect the value of your Forex investment, this article shows you 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 Euro (EUR). The Forex quote, USD/EUR = 265.50, means that one U.S. dollar is equal to 265.50 Euros. The currency to the left of the / (USD in this case) is referred to as base currency and its value is always 1. The currency to the right of the / (EUR in this case) is referred to as the counter currency. In this example, one USD can buy 265.50 EUR, since it is the stronger of the two currencies.
Because the U.S. dollar is regarded as the central currency of the Forex market, it is always treated as the base currency in any Forex quote where it is one of the pairs. Incidentally, the U.S. Dollar is involved in nearly 90% of all Forex transactions.
In this example, your "pair" of currencies are the Japanese Yen (JPY) and the Euro (EUR). The Forex quote, JPY/EUR= 175.10, means that one Japanese Yen is equal to 175.10 Euros. The currency to the left of the / (JPY in this case) is referred to as base currency and its value is 1. The currency to the right of the / (EUR in this case) is referred to as the counter currency. In this example, one JPY can buy 175.10 EUR, since it is the stronger of the two currencies.
The goal of any Forex trading system is to profit from foreign currency movements. This requires adequate training in basic Forex principles, such as performing a Technical Analysis, using Forex charts and Stop/Loss tools, and keeping up-to-date with economic and political events. In a sense, Forex training never ends.
About the Author
Gregory DeVictor is a consultant who has been developing and marketing web sites since 1999. You can learn more about how to develop your own Forex trading system at: http://www.Forex-Trading-System.name
Forex is an abbreviated name for "foreign exchange." The Forex market is a non-stop cash market where the currencies of nations are bought and sold, typically via brokers. For example, you buy Euros, paying with U.S. Dollars, or you sell Euros 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 often result from economic and political factors, such as the price of oil or political unrest. To better understand how the exchange rate can affect the value of your Forex investment, this article shows you 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 Euro (EUR). The Forex quote, USD/EUR = 265.50, means that one U.S. dollar is equal to 265.50 Euros. The currency to the left of the / (USD in this case) is referred to as base currency and its value is always 1. The currency to the right of the / (EUR in this case) is referred to as the counter currency. In this example, one USD can buy 265.50 EUR, since it is the stronger of the two currencies.
Because the U.S. dollar is regarded as the central currency of the Forex market, it is always treated as the base currency in any Forex quote where it is one of the pairs. Incidentally, the U.S. Dollar is involved in nearly 90% of all Forex transactions.
In this example, your "pair" of currencies are the Japanese Yen (JPY) and the Euro (EUR). The Forex quote, JPY/EUR= 175.10, means that one Japanese Yen is equal to 175.10 Euros. The currency to the left of the / (JPY in this case) is referred to as base currency and its value is 1. The currency to the right of the / (EUR in this case) is referred to as the counter currency. In this example, one JPY can buy 175.10 EUR, since it is the stronger of the two currencies.
The goal of any Forex trading system is to profit from foreign currency movements. This requires adequate training in basic Forex principles, such as performing a Technical Analysis, using Forex charts and Stop/Loss tools, and keeping up-to-date with economic and political events. In a sense, Forex training never ends.
About the Author
Gregory DeVictor is a consultant who has been developing and marketing web sites since 1999. You can learn more about how to develop your own Forex trading system at: http://www.Forex-Trading-System.name
Monday, January 22, 2007
The Secrets of the Super-Traders
The Secrets of the Super-Traders
The first and perhaps most important "secret" is to realize that your methodology or approach (no matter how good) is only part of being a highly successful trader. This applies to any trading style including, day trading, swing trading or position trading.
The simple fact is that a bad trader can screw up a fantastic trading system. Conversely a talented trader can take a mediocre strategy and make money with it.
Why? Please read on and I will explain.
Many traders/investors that I have talked with think that to be a "Super-Trader" that they must possess some type of highly advanced trading techniques or software along with nerves of steel and a highly developed intuitive feel for the markets. In addition they think that these elite group, have some "inside information" that they don't.
You will be relieved to know that the above is not necessary. There are actually only a few things that separate traders who consistently make money and those who don't.
And here they are?
* Skilled traders find a strategy or market pattern that offers a high probability for success. They make money by exploiting this edge over and over again.
* Skilled traders never deviate from their methodology or "wing it".
* Skilled traders never enter a trade without a entry and exit strategy. They know exactly when and where to cut their losses as well as taking profits.
* Skilled traders never ever let a winning trade turn into a losing one. The easiest way to ensure that this doesn't happen is to place a protective stop at or a few ticks in the money once your position is up several points.
* Skilled traders never hope, pray or wish that their stock would go up. They understand that when they are wrong they are wrong and the best thing to do is cut their losses short.
* Skilled traders never trade with their emotions. They don't allow themselves to get caught up in the latest and greatest investment hype.
* Skilled traders always have one goal in mind: To preserve their capital at all costs. They do this by never taking on too large of a position. A good rule of thumb to adhere to is never use more than 5% of your funds on any one trade. This way in the worst-case scenario the stock could drop to zero and your account would not be severely affected.
* Skilled traders never get too greedy. There is an old saying that "Pigs gets fed and hogs get slaughtered". These traders don't try to make one big trade that will turn them into instant millionaires. They don't try to hit home runs, instead they understand that it is better to keep hitting singles and making smaller consistent profits.
* Skilled traders enter and exit trades swiftly and decisively.
* Skilled traders listen to no one else's opinion concerning the market or particular trade they are in.
* Skilled traders are often contrarians. They will be buying when others are too scared to and sell when the crowd starts buying.
That's it, the secrets to making big money in the markets. Perhaps that is a bit of a let down as you were hoping for something a bit more esoteric and complicated.
Let me assure you that if you follow the above principles that you will take your trading skills and profits to a level that you never thought possible!
This article is courtesy of Dr. Jeffrey Wilde, a trading veteran with 15 years of experience in all major markets. He is a trading coach to over 1400 traders in 38 countries.
For additional info: http://www.win-at-trading.com
The first and perhaps most important "secret" is to realize that your methodology or approach (no matter how good) is only part of being a highly successful trader. This applies to any trading style including, day trading, swing trading or position trading.
The simple fact is that a bad trader can screw up a fantastic trading system. Conversely a talented trader can take a mediocre strategy and make money with it.
Why? Please read on and I will explain.
Many traders/investors that I have talked with think that to be a "Super-Trader" that they must possess some type of highly advanced trading techniques or software along with nerves of steel and a highly developed intuitive feel for the markets. In addition they think that these elite group, have some "inside information" that they don't.
You will be relieved to know that the above is not necessary. There are actually only a few things that separate traders who consistently make money and those who don't.
And here they are?
* Skilled traders find a strategy or market pattern that offers a high probability for success. They make money by exploiting this edge over and over again.
* Skilled traders never deviate from their methodology or "wing it".
* Skilled traders never enter a trade without a entry and exit strategy. They know exactly when and where to cut their losses as well as taking profits.
* Skilled traders never ever let a winning trade turn into a losing one. The easiest way to ensure that this doesn't happen is to place a protective stop at or a few ticks in the money once your position is up several points.
* Skilled traders never hope, pray or wish that their stock would go up. They understand that when they are wrong they are wrong and the best thing to do is cut their losses short.
* Skilled traders never trade with their emotions. They don't allow themselves to get caught up in the latest and greatest investment hype.
* Skilled traders always have one goal in mind: To preserve their capital at all costs. They do this by never taking on too large of a position. A good rule of thumb to adhere to is never use more than 5% of your funds on any one trade. This way in the worst-case scenario the stock could drop to zero and your account would not be severely affected.
* Skilled traders never get too greedy. There is an old saying that "Pigs gets fed and hogs get slaughtered". These traders don't try to make one big trade that will turn them into instant millionaires. They don't try to hit home runs, instead they understand that it is better to keep hitting singles and making smaller consistent profits.
* Skilled traders enter and exit trades swiftly and decisively.
* Skilled traders listen to no one else's opinion concerning the market or particular trade they are in.
* Skilled traders are often contrarians. They will be buying when others are too scared to and sell when the crowd starts buying.
That's it, the secrets to making big money in the markets. Perhaps that is a bit of a let down as you were hoping for something a bit more esoteric and complicated.
Let me assure you that if you follow the above principles that you will take your trading skills and profits to a level that you never thought possible!
This article is courtesy of Dr. Jeffrey Wilde, a trading veteran with 15 years of experience in all major markets. He is a trading coach to over 1400 traders in 38 countries.
For additional info: http://www.win-at-trading.com
Sunday, January 21, 2007
The Seven Most Traded Currencies in FOREX.
The Seven Most Traded Currencies in FOREX.
Currencies are traded in dollar amounts called "lots". One lot is equal to $1,000, which controls $100,000 in currency. This is what is known as the "margin". You can control $100,000 worth of currency for only 1,000 dollars. This is what is called "High Leverage".
Currencies are always traded in pairs in the FOREX. The pairs have a unique notation that expresses what currencies are being traded. The symbol for a currency pair will always be in the form ABC/DEF. ABC/DEF is not a real currency pair, it is an example of a symbol for a currency pair. In this example ABC is the symbol for one countries currency and DEF is the symbol for another countries currency.
Here are some of the common symbols used in the Forex:
USD - The US Dollar
EUR - The currency of the European Union "EURO"
GBP - The British Pound
JPN - The Japanese Yen
CHF - The Swiss Franc
AUD - The Australian Dollar
CAD - The Canadian Dollar
There are symbols for other currencies as well, but these are the most commonly traded ones.
A currency can never be traded by itself. So you can not ever trade a EUR by itself. You always need to compare one currency with another currency to make a trade possible.
Some of the common PAIRS are:
EUR/USD Euro / US Dollar
"Euro"
USD/JPY US Dollar / Japanese Yen
"Dollar Yen"
GBP/USD British Pound / US Dollar
"Cable"
USD/CAD US Dollar / Canadian Dollar
"Dollar Canada"
AUD/USD Australian Dollar/US Dollar
"Aussie Dollar"
USD/CHF US Dollar / Swiss Franc
"Swissy"
EUR/JPY Euro / Japanese Yen
"Euro Yen"
The listed currency pairs above look like a fraction. The numerator (top of the fraction or "left" of the / however you want to SEE it) is called the base currency. The denominator (bottom of the fraction or "right" of the /however you want to SEE it) is called the counter currency. When you place an order to buy the EUR/USD, for instance, you are actually buying the EUR and selling the USD. If you were to sell the pair, you would be selling the EUR and buying the USD. So if you buy or sell a currency PAIR, you are buying/selling the base currency. You are always doing the opposite of what you did with to base currency with the counter currency.
If this seems confusing then you're in luck. You can always get by with just thinking of the entire pair as one item. Then you are just buying or selling that one item. Thinking like this will still enable you to place trades. You only need to be aware of the base/counter concept for Fundamental Analysis issues.
So why is it important to know about the base/counter currency? The base/counter currency concept illustrates what is actually taking place in a Forex transaction. Some of you reading this, know that short-selling was restricted in the stock market *(Short-selling is where you sell a stock/currency/option/commodity first and then try to buy it back at a lower price later). But in the FOREX you are always buying one currency (base) and selling another (counter). If you sell the pair you are simply flipping which one you buy and which one you sell. The transaction is essentially the same. This allows you to short-sell with no restrictions.
You want to be able to short-sell with no restrictions so you can make money when the market drops as well as when it rises. The problem with traditional stock market trading is that the market has to go up for you to make money. With FOREX trading you can make money in all directions.
http://www.1-forex.com
Omar Vargas; FOREX Trader and Freelance writer.
http://www.1-forex.com
Currencies are traded in dollar amounts called "lots". One lot is equal to $1,000, which controls $100,000 in currency. This is what is known as the "margin". You can control $100,000 worth of currency for only 1,000 dollars. This is what is called "High Leverage".
Currencies are always traded in pairs in the FOREX. The pairs have a unique notation that expresses what currencies are being traded. The symbol for a currency pair will always be in the form ABC/DEF. ABC/DEF is not a real currency pair, it is an example of a symbol for a currency pair. In this example ABC is the symbol for one countries currency and DEF is the symbol for another countries currency.
Here are some of the common symbols used in the Forex:
USD - The US Dollar
EUR - The currency of the European Union "EURO"
GBP - The British Pound
JPN - The Japanese Yen
CHF - The Swiss Franc
AUD - The Australian Dollar
CAD - The Canadian Dollar
There are symbols for other currencies as well, but these are the most commonly traded ones.
A currency can never be traded by itself. So you can not ever trade a EUR by itself. You always need to compare one currency with another currency to make a trade possible.
Some of the common PAIRS are:
EUR/USD Euro / US Dollar
"Euro"
USD/JPY US Dollar / Japanese Yen
"Dollar Yen"
GBP/USD British Pound / US Dollar
"Cable"
USD/CAD US Dollar / Canadian Dollar
"Dollar Canada"
AUD/USD Australian Dollar/US Dollar
"Aussie Dollar"
USD/CHF US Dollar / Swiss Franc
"Swissy"
EUR/JPY Euro / Japanese Yen
"Euro Yen"
The listed currency pairs above look like a fraction. The numerator (top of the fraction or "left" of the / however you want to SEE it) is called the base currency. The denominator (bottom of the fraction or "right" of the /however you want to SEE it) is called the counter currency. When you place an order to buy the EUR/USD, for instance, you are actually buying the EUR and selling the USD. If you were to sell the pair, you would be selling the EUR and buying the USD. So if you buy or sell a currency PAIR, you are buying/selling the base currency. You are always doing the opposite of what you did with to base currency with the counter currency.
If this seems confusing then you're in luck. You can always get by with just thinking of the entire pair as one item. Then you are just buying or selling that one item. Thinking like this will still enable you to place trades. You only need to be aware of the base/counter concept for Fundamental Analysis issues.
So why is it important to know about the base/counter currency? The base/counter currency concept illustrates what is actually taking place in a Forex transaction. Some of you reading this, know that short-selling was restricted in the stock market *(Short-selling is where you sell a stock/currency/option/commodity first and then try to buy it back at a lower price later). But in the FOREX you are always buying one currency (base) and selling another (counter). If you sell the pair you are simply flipping which one you buy and which one you sell. The transaction is essentially the same. This allows you to short-sell with no restrictions.
You want to be able to short-sell with no restrictions so you can make money when the market drops as well as when it rises. The problem with traditional stock market trading is that the market has to go up for you to make money. With FOREX trading you can make money in all directions.
http://www.1-forex.com
Omar Vargas; FOREX Trader and Freelance writer.
http://www.1-forex.com
The Major Players in the Foreign Currency Exchange Market - FOREX
The Major Players in the Foreign Currency Exchange Market - FOREX
Since the US dollar is the centerpiece of the market, it is normally considered the 'base' currency for quotes. In the "Majors", this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. For example, a quote of USD/JPY 123.50 means that one U.S. dollar is equal to 123.50 Japanese yen.
When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote listed above were to increase to 124.01, that would mean that the dollar is stronger because it will now buy more yen than before.
Some exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as GBP/USD 1.4366, which means that one British pound equals 1.4366 U.S. dollars. In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar.
So if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening. Currency pairs that do not involve the U.S. dollar are called cross currencies, but the premise is the same. For example, a quote of EUR/JPY 127.95 signifies that one Euro is equal to 127.95 Japanese yen.
Chuck Cox is a Technical Writer and Industrial Scientist by professional with a background in statistics. He has used mathematical and statistical methods to invest and trade in the stock, futures, and options markets. Chuck has owned various businesses and presently operates several websites. To investigate a new business idea, visit his website, http://www.earncashathometoday.com/trading-FOREX.htm
Since the US dollar is the centerpiece of the market, it is normally considered the 'base' currency for quotes. In the "Majors", this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. For example, a quote of USD/JPY 123.50 means that one U.S. dollar is equal to 123.50 Japanese yen.
When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote listed above were to increase to 124.01, that would mean that the dollar is stronger because it will now buy more yen than before.
Some exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as GBP/USD 1.4366, which means that one British pound equals 1.4366 U.S. dollars. In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar.
So if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening. Currency pairs that do not involve the U.S. dollar are called cross currencies, but the premise is the same. For example, a quote of EUR/JPY 127.95 signifies that one Euro is equal to 127.95 Japanese yen.
Chuck Cox is a Technical Writer and Industrial Scientist by professional with a background in statistics. He has used mathematical and statistical methods to invest and trade in the stock, futures, and options markets. Chuck has owned various businesses and presently operates several websites. To investigate a new business idea, visit his website, http://www.earncashathometoday.com/trading-FOREX.htm
FOREX 101: Make Money with Currency Trading
FOREX 101: Make Money with Currency Trading
For those unfamiliar with the term, FOREX (FOReign EXchange market), refers to an international exchange market where currencies are bought and sold. The Foreign Exchange Market that we see today began in the 1970's, when free exchange rates and floating currencies were introduced. In such an environment only participants in the market determine the price of one currency against another, based upon supply and demand for that currency.
FOREX is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.
Another somewhat unique characteristic of the FOREX money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.
How FOREX Works
Transactions in foreign currencies are not centralized on an exchange, unlike say the NYSE, and thus take place all over the world via telecommunications. Trade is open 24 hours a day from Sunday afternoon until Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday). In almost every time zone around the world, there are dealers who will quote all major currencies. After deciding what currency the investor would like to purchase, he or she does so via one of these dealers (some of which can be found online). It is quite common practice for investors to speculate on currency prices by getting a credit line (which are available to those with capital as small as $500), and vastly increase their potential gains and losses. This is called marginal trading.
Marginal Trading
Marginal trading is simply the term used for trading with borrowed capital. It is appealing because of the fact that in FOREX investments can be made without a real money supply. This allows investors to invest much more money with fewer money transfer costs, and open bigger positions with a much smaller amount of actual capital. Thus, one can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital. Marginal trading in an exchange market is quantified in lots. The term "lot" refers to approximately $100,000, an amount which can be obtained by putting up as little as 0.5% or $500.
EXAMPLE: You believe that signals in the market are indicating that the British Pound will go up against the US Dollar. You open 1 lot for buying the Pound with a 1% margin at the price of 1.49889 and wait for the exchange rate to climb. At some point in the future, your predictions come true and you decide to sell. You close the position at 1.5050 and earn 61 pips or about $405. Thus, on an initial capital investment of $1,000, you have made over 40% in profits. (Just as an example of how exchange rates change in the course of a day, an average daily change of the Euro (in Dollars) is about 70 to 100 pips.)
When you decide to close a position, the deposit sum that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.
Investment Strategies: Technical Analysis and Fundamental Analysis
The two fundamental strategies in investing in FOREX are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. This technique stems from the assumption that all information about the market and a particular currency's future fluctuations is found in the price chain. That is to say, that all factors which have an effect on the price have already been considered by the market and are thus reflected in the price. Essentially then, what this type of investor does is base his/her investments upon three fundamental suppositions. These are: that the movement of the market considers all factors, that the movement of prices is purposeful and directly tied to these events, and that history repeats itself. Someone utilizing technical analysis looks at the highest and lowest prices of a currency, the prices of opening and closing, and the volume of transactions. This investor does not try to outsmart the market, or even predict major long term trends, but simply looks at what has happened to that currency in the recent past, and predicts that the small fluctuations will generally continue just as they have before.
A Fundamental Analysis is one which analyzes the current situations in the country of the currency, including such things as its economy, its political situation, and other related rumors. By the numbers, a country's economy depends on a number of quantifiable measurements such as its Central Bank's interest rate, the national unemployment level, tax policy and the rate of inflation. An investor can also anticipate that less quantifiable occurrences, such as political unrest or transition will also have an effect on the market. Before basing all predictions on the factors alone, however, it is important to remember that investors must also keep in mind the expectations and anticipations of market participants. For just as in any stock market, the value of a currency is also based in large part on perceptions of and anticipations about that currency, not solely on its reality.
Make Money with Currency Trading on FOREX
FOREX investing is one of the most potentially rewarding types of investments available. While certainly the risk is great, the ability to conduct marginal trading on FOREX means that potential profits are enormous relative to initial capital investments. Another benefit of FOREX is that its size prevents almost all attempts by others to influence the market for their own gain. So that when investing in foreign currency markets one can feel quite confident that the investment he or she is making has the same opportunity for profit as other investors throughout the world. While investing in FOREX short term requires a certain degree of diligence, investors who utilize a technical analysis can feel relatively confident that their own ability to read the daily fluctuations of the currency market are sufficiently adequate to give them the knowledge necessary to make informed investments.
Rich McIver is a contributing writer for The Forex Blog: Currency Trading News ( http://www.forexblog.org ).
For those unfamiliar with the term, FOREX (FOReign EXchange market), refers to an international exchange market where currencies are bought and sold. The Foreign Exchange Market that we see today began in the 1970's, when free exchange rates and floating currencies were introduced. In such an environment only participants in the market determine the price of one currency against another, based upon supply and demand for that currency.
FOREX is a somewhat unique market for a number of reasons. Firstly, it is one of the few markets in which it can be said with very few qualifications that it is free of external controls and that it cannot be manipulated. It is also the largest liquid financial market, with trade reaching between 1 and 1.5 trillion US dollars a day. With this much money moving this fast, it is clear why a single investor would find it near impossible to significantly affect the price of a major currency. Furthermore, the liquidity of the market means that unlike some rarely traded stock, traders are able to open and close positions within a few seconds as there are always willing buyers and sellers.
Another somewhat unique characteristic of the FOREX money market is the variance of its participants. Investors find a number of reasons for entering the market, some as longer term hedge investors, while others utilize massive credit lines to seek large short term gains. Interestingly, unlike blue-chip stocks, which are usually most attractive only to the long term investor, the combination of rather constant but small daily fluctuations in currency prices, create an environment which attracts investors with a broad range of strategies.
How FOREX Works
Transactions in foreign currencies are not centralized on an exchange, unlike say the NYSE, and thus take place all over the world via telecommunications. Trade is open 24 hours a day from Sunday afternoon until Friday afternoon (00:00 GMT on Monday to 10:00 pm GMT on Friday). In almost every time zone around the world, there are dealers who will quote all major currencies. After deciding what currency the investor would like to purchase, he or she does so via one of these dealers (some of which can be found online). It is quite common practice for investors to speculate on currency prices by getting a credit line (which are available to those with capital as small as $500), and vastly increase their potential gains and losses. This is called marginal trading.
Marginal Trading
Marginal trading is simply the term used for trading with borrowed capital. It is appealing because of the fact that in FOREX investments can be made without a real money supply. This allows investors to invest much more money with fewer money transfer costs, and open bigger positions with a much smaller amount of actual capital. Thus, one can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital. Marginal trading in an exchange market is quantified in lots. The term "lot" refers to approximately $100,000, an amount which can be obtained by putting up as little as 0.5% or $500.
EXAMPLE: You believe that signals in the market are indicating that the British Pound will go up against the US Dollar. You open 1 lot for buying the Pound with a 1% margin at the price of 1.49889 and wait for the exchange rate to climb. At some point in the future, your predictions come true and you decide to sell. You close the position at 1.5050 and earn 61 pips or about $405. Thus, on an initial capital investment of $1,000, you have made over 40% in profits. (Just as an example of how exchange rates change in the course of a day, an average daily change of the Euro (in Dollars) is about 70 to 100 pips.)
When you decide to close a position, the deposit sum that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.
Investment Strategies: Technical Analysis and Fundamental Analysis
The two fundamental strategies in investing in FOREX are Technical Analysis or Fundamental Analysis. Most small and medium sized investors in financial markets use Technical Analysis. This technique stems from the assumption that all information about the market and a particular currency's future fluctuations is found in the price chain. That is to say, that all factors which have an effect on the price have already been considered by the market and are thus reflected in the price. Essentially then, what this type of investor does is base his/her investments upon three fundamental suppositions. These are: that the movement of the market considers all factors, that the movement of prices is purposeful and directly tied to these events, and that history repeats itself. Someone utilizing technical analysis looks at the highest and lowest prices of a currency, the prices of opening and closing, and the volume of transactions. This investor does not try to outsmart the market, or even predict major long term trends, but simply looks at what has happened to that currency in the recent past, and predicts that the small fluctuations will generally continue just as they have before.
A Fundamental Analysis is one which analyzes the current situations in the country of the currency, including such things as its economy, its political situation, and other related rumors. By the numbers, a country's economy depends on a number of quantifiable measurements such as its Central Bank's interest rate, the national unemployment level, tax policy and the rate of inflation. An investor can also anticipate that less quantifiable occurrences, such as political unrest or transition will also have an effect on the market. Before basing all predictions on the factors alone, however, it is important to remember that investors must also keep in mind the expectations and anticipations of market participants. For just as in any stock market, the value of a currency is also based in large part on perceptions of and anticipations about that currency, not solely on its reality.
Make Money with Currency Trading on FOREX
FOREX investing is one of the most potentially rewarding types of investments available. While certainly the risk is great, the ability to conduct marginal trading on FOREX means that potential profits are enormous relative to initial capital investments. Another benefit of FOREX is that its size prevents almost all attempts by others to influence the market for their own gain. So that when investing in foreign currency markets one can feel quite confident that the investment he or she is making has the same opportunity for profit as other investors throughout the world. While investing in FOREX short term requires a certain degree of diligence, investors who utilize a technical analysis can feel relatively confident that their own ability to read the daily fluctuations of the currency market are sufficiently adequate to give them the knowledge necessary to make informed investments.
Rich McIver is a contributing writer for The Forex Blog: Currency Trading News ( http://www.forexblog.org ).
Currency Trading Success - To Succeed You MUST Accept Fact
Currency trading success relies on a lot of different aspects but the one most new or inexperienced traders make is the one that we are going to discuss in this article.
You may be surprised that what we are going to discuss is a key element for currency trading success, so let's look at it.
The outcome we are talking about is:
You must be mentally prepared to accept huge gains - You may say this is easy, well most traders can't do it and here's why.
First let's look at the key to making profits
Run your profits and cut your loses
But this is the exact opposite of human nature
A trader when he has a profit wants to take it and the bigger it gets the more he wants to snatch it.
For currency trading success you MUST follow the longer term trends, most traders don't they simply bank profits quickly and think their clever for getting a profit.
The fact is the profits are never big enough to yield enough profit to cover their inevitable losses
Holding a trend is not easy!
Especially as short term volatility forces the position back causing you thousands in losses. Its here you must have the courage of your conviction to hold it.
If you have a sound method you must only exit when your system tells you
A good system will not trail stops to close but give the market room to move. Moving stops to quickly to lock in profit is simply a great way to get stopped out.
How to fail straightaway
Other traders when seeking currency trading success don't even bother to look for big profits.
They fall for the myth of day trading and short term swing systems.
This ensures that they only target small gains and there losses are just as big or bigger, their transaction costs mount up and they fail.
Short term trading has the odds stacked firmly against you and to win you need them in your favor as much as possible, so catch the big trends and hold them.
Have the courage to see the big picture
Accept short term volatility will hurt you, but that's on paper not in your pocket
Currency trading success is all about the dollars you put in your pocket.
The way to do that is be a long term trend follower and make as much as you can from the big trends, that make the big profits.
About the Author
MORE FREE BETTER TRADING INFO
On all aspects of becoming a profitable trader including info about legandary trader W D Gann who made a $50 million fortune trading go to our website for an exclusive Gann Trading Course visit our website at http://www.net-planet.org/index.html
You may be surprised that what we are going to discuss is a key element for currency trading success, so let's look at it.
The outcome we are talking about is:
You must be mentally prepared to accept huge gains - You may say this is easy, well most traders can't do it and here's why.
First let's look at the key to making profits
Run your profits and cut your loses
But this is the exact opposite of human nature
A trader when he has a profit wants to take it and the bigger it gets the more he wants to snatch it.
For currency trading success you MUST follow the longer term trends, most traders don't they simply bank profits quickly and think their clever for getting a profit.
The fact is the profits are never big enough to yield enough profit to cover their inevitable losses
Holding a trend is not easy!
Especially as short term volatility forces the position back causing you thousands in losses. Its here you must have the courage of your conviction to hold it.
If you have a sound method you must only exit when your system tells you
A good system will not trail stops to close but give the market room to move. Moving stops to quickly to lock in profit is simply a great way to get stopped out.
How to fail straightaway
Other traders when seeking currency trading success don't even bother to look for big profits.
They fall for the myth of day trading and short term swing systems.
This ensures that they only target small gains and there losses are just as big or bigger, their transaction costs mount up and they fail.
Short term trading has the odds stacked firmly against you and to win you need them in your favor as much as possible, so catch the big trends and hold them.
Have the courage to see the big picture
Accept short term volatility will hurt you, but that's on paper not in your pocket
Currency trading success is all about the dollars you put in your pocket.
The way to do that is be a long term trend follower and make as much as you can from the big trends, that make the big profits.
About the Author
MORE FREE BETTER TRADING INFO
On all aspects of becoming a profitable trader including info about legandary trader W D Gann who made a $50 million fortune trading go to our website for an exclusive Gann Trading Course visit our website at http://www.net-planet.org/index.html
Subscribe to:
Comments (Atom)