Forex School » Forex Trading Basic

Forex as a challenging trade

marthajackson — Mon, 12 Dec 2011 09:39:03 +0000

Forex is the abbreviation for foreign exchange market and it is also known as currency market. When we say market, we usually mean a place where there are buying and selling between traders and customers. It is no different in Forex market. It is the global market for trading currencies. Let me give you a typical example of this transaction, you can buy, say, a hundred dollars by paying in pounds and sell it against some other currencies. The difference between the rates is your profit. The responsibility of determining relative values of different currencies of different countries all throughout the world also lies with the market. It is market is essentially a market that deals with liquid finance.

Government, central banks, financial institutions are the most important traders of this area of investment. Let me tell you some features of the market in details. The most important feature is the accessibility. This market is open twenty four hours a day, every day of the week except Sunday. Stock market deals with securities but unlike stock market, Forex market is extremely liquid in nature. Another great feature of this market is its open nature. The rate varies on the basis of forex news from international economies. Moreover, unlike stock market there is no commission amount involved thereby increasing its transparent nature and making it more attractive to traders. But like every other markets, it is very risky too. You can earn huge profits and you can make huge losses, all in a single day. There are no sure shot ways of succeeding in this field, but here are a few tips that will help you to be a little safe while trading:

Learn before you leap into the world of Forex trading. Knowledge is power and if you know how to deal in the market, you can be successful no matter through which broker you do your trade. Broker is just a platform; the real strategy should be yours.

Choose your broker extremely carefully. It would not matter in your success but when it would come to withdrawing your money or any other services that you require, brokers can cause a lot of trouble. Brokers are your interface to the world of Forex and hence having a good broker would help you trade easily and conveniently.

Be alert and practice to hone your skills of dealing in the market. You cannot expect to win every single time but if you practice and are alert enough to keep watch on the economy of the countries as well as updates, you would have a fair chance of earning huge profits.

Many people might tell you that trading in the Forex market is like a lottery game, but in reality it is much more than that. It is a challenging and complicated job that requires patience, calculations and most of all thorough knowledge of the foreign economies. Hence if you want to succeed, be real serious about this business.

Can forex trading help you beat your debt worries?

marthajackson — Thu, 21 Jul 2011 05:46:35 +0000

With the increasingly large number of people looking for secondary sources of income, the investment market is booming as most people are showing rising interest in this particular market. Though it is a fact that the investment market is fraught with risk, but if treaded in a proper manner, it can also shower you with huge returns. Among all the financial instruments, you can try your luck in the forex market as this is one of the most accommodating markets for the investors. There are a number of benefits of the forex market that can be taken into consideration before taking a plunge into it. Have a look at them. Please follow: http://www.twitter.com/debtcc

24 hour market: The forex market is open throughout the day and for 7 days in a week and therefore any investor can access the market whenever he wants to. No matter where you reside or where you’ve been for a trip, you can easily access the market. This is an added advantage of this market and makes it outperform the other markets.

Extremely high liquidity: Liquidity is the ability of the asset to be converted into cash without going through price movement. In the forex market, high liquidity actually means moving large amount of money in and out of the forex market with no movement in the price. As you’re dealing with currencies it, there is no need of converting the cash.

Leverage: The forex brokers usually allow you to trade the currency market using leverage. Leverage is nothing but the ability to trade more money on the market than that which is actually there in your bank account. For instance, if you’re trading with 50:1 leverage, you could possibly trade $50 on the market for every $1 that is there in your account. This simply implies that you’re able to control a trade of $50,000 with capital of $1,000.

How can forex trading help you pay off your debts?

The money that you earn through the forex market can be used in repaying your debts through the professional debt relief options. If you enroll yourself with a debt consolidation company, you’re liable to make single monthly payments to the company that will be disbursed off to your creditors. In order to get rid of your debts, you need to have enough funds. From where will you get these funds? It is only if you trade the forex market that you can get enough funds with which you can repay your debt burden.
Therefore, if you’re deeply in credit card debt and are going through shortage of funds, you can try investing money in the forex market. Consider the above mentioned benefits before taking the plunge.

What’s Fibonacci Forex Trading?

Trader — Sun, 11 Apr 2010 15:47:04 +0000

Fibonacci forex trading is the basis of many forex trading systems used by a great number of professional forex brokers around the globe, and many billions of dollars are profitable traded every year based on these trading techniques.

Fibonacci was an Italian mathematician and he is best remembered by his world famous Fibonacci sequence, the definition of this sequence is that it’s formed by a series of numbers where each number is the sum of the two preceding numbers; 1, 1, 2, 3, 5, 8, 13 …But in the case of currency trading what is more important for the forex trader is the Fibonacci ratios derived from this sequence of numbers, i.e. .236, .50, .382, .618, etc.

These ratios are mathematical proportions prevalent in many places and structures in nature, as well as in many man made creations.

Forex trading can greatly benefit from this mathematical proportions due to the fact that the oscillations observed in forex charts, where prices are visibly changing in an oscillatory pattern, follow Fibonacci ratios very closely as indicators of resistance and support levels; maybe not to the last cent, but so close as to be really amazing.

Fibonacci price points, or levels, for any forex currency pair can be calculated in advance so that the trader will know when to enter or exit the market if the prediction given by the Fibonacci forex day trading system he uses fulfills its predictions.

Many people tries to make this analysis overly complicated scaring away many new forex traders that are just beginning to understand how the forex market works and how to make a profit in it. But this is not how it has to be. I can’t say it’s a simple concept but it is quite understandable for any trader once he or she has grasped the basics and has had some practice trading using Fibonacci levels along with other secondary indicators that will help to improve the accuracy of the entry and exit point for every particular trade.

The Philosophy Of Winning In Trading the Forex Market -The Sure Way To Become A Successful Trader

Trader — Sun, 11 Apr 2010 15:27:09 +0000

Everyone who enters into the forex market to trade always starts off with good intentions. They will invariably aim to win. They are there to make gigantic profits in the market. After all, it is a keen interest in trading that has led to their involvement in trading the forex market.

In all my years of trading, I have yet to meet a complete newbie who is in the forex market to trade without spending at least some time to learn how to trade. At worst, the newbie to forex trading has at least learned the technical terms to trading, and has at least entered his trading account to look at the trading platform and the trading interface provided by his broker.

In the quest to become a better trader, most forex traders I know would have learnt the use of many tools, usually technical tools. To them, the tools are their weapons of war. Many use technical trading systems to help them get a more accurate analysis of price movements, and to study price trends. Some use simple trend trading methods such as trendlines, others use price patterns of congestion and outbreaks, some use the more sophisticated Elliot wave counting and WD Gann squaring of price and time, and some even neural networks forecasting and astronomy. Yet, with the help of many trading tools, a big majority of traders are still unprofitable.

Herein lies the problem with many traders.

In forex trading, like in all forms of market trading, the amount of tools you use, whether singly or in synergy, will not guarantee your success. Having a battery of technical indicators to provide you a technical reading will not ensure your success in trading.At best, these technical indicators will help you understand the market trend more, or might even serve to confuse you especially if they generate conflicting signals.

Forex trading, is just like fighting a battle, and the following principle holds true:

“It’s not the sword that wins the battle.

It’s the Warrior who’s wielding it.”

It’s the warrior who’s wielding the sword that will determine the outcome of the battle. In other words, if you are a forex trader, it is your trading discipline, and the proper use of the trading tool or method that will ensure your success.It is you, the trading warrior, who wields the trading tool correctly that can ensure the battle is won.

Therefore to become a successful trader, you will need to master your self – to follow a set trading method and to execute the trades based on a trading plan, where you will follow stringently to the best trading setups and exit at pre-determined stop losses. Without trading discipline, you will not be able to master your trades, and you will find profits hard to come by.

It is only when you master yourself to conduct discipline trading and also master your trades by following a proven trading methodology with a timely and suitable entry and exit strategy that you can become a profitable trader.

The Basics Of Forex Trading

Trader — Sun, 11 Apr 2010 15:19:28 +0000

Forex Trading, also known as FX Trading or Foreign Exchange Trading, is what happens when you trade one nation’s currency for another. For example, if I go to the bank and exchange ten United States dollars for 15 Australian dollars, I have completed a simple Forex trade.

The forex trading market is the largest trading market in the world. According to a study done in 2004, approximately two trillion dollars are traded each day in markets across the globe.

The forex trading market is very unique in several aspects, one of which is its international presence. Unlike the stock exchange, which is largely located in New York and has set hours, the foreign exchange market is open twenty four hours a day. In between the united states, European, Asian, and other markets, there is always at least one market open.

Other factors that make the forex market unique are the high liquidity of the market, the wide variety of traders and institutions involved, and the wide variety of factors which affect prices.

In the forex market, there is the ask price (the price at which currency is sold) and the bid price (the price at which the currency is bought. Usually, these prices are very close together, often about one-hundredth of a cent apart.

The United States dollar is by far the most traded currency. Approximately eighty nine percent of transactions involve the United States Dollar. Other highly traded currencies include the Euro, Yen (Japanese), Sterling (British), Franc (Swiss), and the Australian Dollar.

The forex market includes many types of traders. The largest traders are banks. Actually, about fifty-three percent of forex transactions are in between two banks. Other traders include non-bank financial institutions, other corporations, retail exchange brokers, investment firms, hedge funds, and speculators.

The forex marketing is the largest, and arguably most complex market in the world.

Pivot Points in Forex: Mapping your Time Frame

Trader — Sun, 11 Apr 2010 15:13:30 +0000

It is useful to have a map and be able to see where the price is relative to previous market action. This way we can see how is the sentiment of traders and investors at any given moment, it also gives us a general idea of where the market is heading during the day. This information can help us decide which way to trade.

Pivot points, a technique developed by floor traders, help us see where the price is relative to previous market action.

As a definition, a pivot point is a turning point or condition. The same applies to the Forex market, the pivot point is a level in which the sentiment of the market changes from “bull” to “bear” or vice versa. If the market breaks this level up, then the sentiment is said to be a bull market and it is likely to continue its way up, on the other hand, if the market breaks this level down, then the sentiment is bear, and it is expected to continue its way down. Also at this level, the market is expected to have some kind of support/resistance, and if price can’t break the pivot point, a possible bounce from it is plausible.

Pivot points work best on highly liquid markets, like the spot currency market, but they can also be used in other markets as well.

Pivot Points

In a few words, pivot point is a level in which the sentiment of traders and investors changes from bull to bear or vice versa.

Why PP work?
They work simply because many individual traders and investors use and trust them, as well as bank and institutional traders. It is known to every trader that the pivot point is an important measure of strength and weakness of any market.

Calculating pivot points
There are several ways to arrive to the Pivot point. The method we found to have the most accurate results is calculated by taking the average of the high, low and close of a previous period (or session).

Pivot point (PP) = (High + Low + Close) / 3

Take for instance the following EUR/USD information from the previous session:

Open: 1.2386
High: 1.2474
Low: 1.2376
Close: 1.2458

The PP would be,
PP = (1.2474 + 1.2376 + 1.2458) / 3 = 1.2439

What does this number tell us?
It simply tells us that if the market is trading above 1.2439, Bulls are winning the battle pushing the prices higher. And if the market is trading below this 1.2439 the bears are winning the battle pulling prices lower. On both cases this condition is likely to sustain until the next session.

Since the Forex market is a 24hr market (no close or open from day to day) there is a eternal battle on deciding at white time we should take the open, close, high and low from each session. From our point of view, the times that produce more accurate predictions is taking the open at 00:00 GMT and the close at 23:59 GMT.

Besides the calculation of the PP, there are other support and resistance levels that are calculated taking the PP as a reference.

Support 1 (S1) = (PP * 2) – H
Resistance 1 (R1) = (PP * 2) – L
Support 2 (S2) = PP – (R1 – S1)
Resistance 2 (R2) = PP + (R1 – S1)

Where , H is the High of the previous period and L is the low of the previous period

Continuing with the example above, PP = 1.2439

S1 = (1.2439 * 2) – 1.2474 = 1.2404
R1 = (1.2439 * 2) – 1.2376 = 1.2502
R2 = 1.2439 + (1.2636 – 1.2537) = 1.2537
S2 = 1.2439 – (1.2636 – 1.2537) = 1.2537

These levels are supposed to mark support and resistance levels for the current session.

On the example above, the PP was calculated using information of the previous session (previous day.) This way we could see possible intraday resistance and support levels. But it can also be calculated using the previous weekly or monthly data to determine such levels. By doing so we are able to see the sentiment over longer periods of time. Also we can see possible levels that might offer support and resistance throughout the week or month. Calculating the Pivot point in a weekly or monthly basis is mostly used by long term traders, but it can also be used by short time traders, it gives us a good idea about the longer term trend.

S1, S2, R1 AND R2…? An Objective Alternative

As already stated, the pivot point zone is a well-known technique and it works simply because many traders and investors use and trust it. But what about the other support and resistance zones (S1, S2, R1 and R2,) to forecast a support or resistance level with some mathematical formula is somehow subjective. It is hard to rely on them blindly just because the formula popped out that level. For this reason, we have created an alternative way to map our time frame, simpler but more objective and effective.

We calculate the pivot point as showed before. But our support and resistance levels are drawn in a different way. We take the previous session high and low, and draw those levels on today’s chart. The same is done with the session before the previous session. So, we will have our PP and four more important levels drawn in our chart.

LOPS1, low of the previous session.
HOPS1, high of the previous session.
LOPS2, low of the session before the previous session.
HOPS2, high of the session before the previous session.
PP, pivot point.

These levels will tell us the strength of the market at any given moment. If the market is trading above the PP, then the market is considered in a possible uptrend. If the market is trading above HOPS1 or HOPS2, then the market is in an uptrend, and we only take long positions. If the market is trading below the PP then the market is considered in a possible downtrend. If the market is trading below LOPS1 or LOPS2, then the market is in a downtrend, and we should only consider short trades.

The psychology behind this approach is simple. We know that for some reason the market stopped there from going higher/lower the previous session, or the session before that. We don’t know the reason, and we don’t need to know it. We only know the fact: the market reversed at that level. We also know that traders and investors have memories, they do remember that the price stopped there before, and the odds are that the market reverses from there again (maybe because the same reason, and maybe not) or at least find some support or resistance at these levels.

What is important about his approach is that support and resistance levels are measured objectively; they aren’t just a level derived from a mathematical formula, the price reversed there before so these levels have a higher probability of being effective.

Our mapping method works on both market conditions, when trending and on sideways conditions. In a trending market, it helps us determine the strength of the trend and trade off important levels. On sideways markets it shows us possible reversal levels.

How we use our mapping method?
We at StraightForex (www.straightforex.com) use the mapping method in three different ways: as a trend identification (measure of the strength of the trend), a trading system using important levels with price behavior as a trading signal and to set the risk reward ratio (RR) of any given trade based on where the is the market relative to the previous session.

Understanding Forex Risk Management

Trader — Sun, 11 Apr 2010 07:49:41 +0000

Understanding Forex Risk Management
Theres risk in every trade you take, but as long as you can measure risk, you can manage it.

Read more on Investopedia via Yahoo! Finance

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Best Way to Learn Forex Trading – Use a Forex Course – Cut Your Learning Curve and Learn Risk Free!

Trader — Sat, 10 Apr 2010 08:21:36 +0000

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In Forex trading, it’s a well known fact that 95% of all traders lose money and this is basically because they don’t get the right Forex education. For many traders, the best way to learn Forex trading is to use a FX course and learn risk free. Let’s take a look at what the best courses give you.

The best courses give you proven tools and currency trading strategies which aim to get the odds on your side, allowing you to learn quickly and get you on the road to making a great second income from home. You will also, be told why the system works and will continue to work, so you can apply the strategy with confidence and discipline.

To show you how successful the strategy is the vendor will normally do daily updates, so you can see how much it makes in terms of profits in real time trading. They will also give you unlimited email support, in case you have any questions while you learn.

One of the good things about learning Forex in this way is you have no risk, because the vendor will give you as 100% money back guarantee, should you feel for any reason, the method taught or currency trading is simply not for you.

You can normally learn to become a currency trader in a few weeks and while you can devise your own strategy, these courses relieve you of the hard work and give you a proven one, you can simply use right after learning the material.

There is no better way to earn a great second income, than global FX trading and with the best courses, you have the education you need, to start earning a great income in 30 minutes a day or less and this makes this way of learning, the best way to learn Forex trading in terms of – the effort you have to make in reaching your goal of long term currency trading success.

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For free 2 x trading Pdf’s, with 50 of pages of essential Forex Information and the Best Forex Trading Education visit our website and you can find out how to: Learn Forex Trading the right way.

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Learn Forex Trading – Getting the Best One

Trader — Fri, 09 Apr 2010 07:55:48 +0000

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Many People are curious about how the Forex currency works and where they can go to learn. When you learn Forex trading, it should explain to you that Forex is not a risk-free business. The key to limiting risks and avoiding scams is education. Risk management is another area that worries Forex traders. If you really want to become successful at Forex, you need to have patience, effort and time to learn Forex the right way.

In order to achieve sufficient knowledge it is vital to learn Forex currency system from experts. Many online Forex companies offer free training. There are also Forex trading courses available and these are also a valuable way to learn Forex trading system as you can refer to these course time and time again. All you need to do is a brief internet search and you will have a great deal of tutorials and courses to choose from. There are plenty of free Forex trading courses and tutorials online so you do not really need to pay any money when you start learning it. Once you have a bit of experience and trade in the Forex market for a while, then you can buy intermediate to advanced Forex trading courses such as the Forex mentor course. There are literally hundreds of Forex companies offering online tutorials and guides.

When you learn Forex trading using a quality course or attending a reputable school, you will learn different trading risks involving the exchange rate, interest rate, credit and country risks. The more you are able to learn in Forex trading training the more understanding of the basics you will have and the more success will follow as a result of your comprehensive understanding of Forex fundamentals.

The success of the system flows from its ability conduct trade in real time. This is difficult to achieve manually, especially if the trading is to be done in milliseconds. Where making the right split second decisions can mean the difference between making and losing money, being impulsive, indecisive, unsure, or rash can do you financial harm. If you are serious about succeeding as a Forex trader, then it’s down to you, learn now and learn to succeed. You may be surprised to learn how easy it is to learn the basics of Forex currency online and how quickly you can make money with Forex.

For more information and see the products you can visit http://www.99forextrading.com

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Best Way to Learn Forex Trading

Trader — Thu, 08 Apr 2010 09:22:01 +0000

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Each and every day, about $1 trillion are being traded in the Forex market and it’s quite easy to see why there are so many people interested in trying it out for themselves. After all, it’s a great opportunity to make money once you’ve learned the basics. Of course, nothing would take the place of experience as the best teacher when it comes to trading but there are ways through which you can learn enough to give you a generous start in the currency trading market. There really isn’t one best way to learn Forex trading because people differ in the way absorb the information they are being given. For example, people like it when everything’s fast paced whilst there are those who like to take their time. However, many would agree that the best way to get started with learning how to trade is through a Forex demo account. Basically, through a demo account you would be able to get first hand experience without risking any money. It would afford you the unique opportunity of actually trading in the market without the need to invest real money. This way, you’d be able to experience the conditions that a real trader has to work with and keep track of your gains and losses through your “virtual money”.

Of course, wasn’t it said before that the best way to learn Forex trading is through actual experience. With a demo account, you’ll know exactly what to expect when you begin trading with real money. How does one secure one of these demo accounts? Well, typically, Forex trading programs online would include one. If you are unsure about this, don’t hesitate to learn more about what the various trading programs entail. This would give you the necessary information you need as well as clue you in on whether or not the include demo accounts for new members. Are there others ways through which you can learn more about the Forex market? Yes, there are. In fact, there are websites that would teach you the basics as well as the more advanced levels of trading in the Forex market. There are also plenty of free information available online as well as those provided for by websites that require paid membership.

As for the best way to learn Forex trading, this all depends upon you and your preferences. There are plenty of options to choose from. In fact, you can even opt to attend one of the many off line seminars that happen nationwide for those who are interested in learning more about Forex. Typically, these seminars would happen during a span of 2 or more days. There are also conventions which you can participate in and hear what the expert’s say when it comes to starting out as a newbie in the Forex market. If you prefer to do things online and during the hours that are convenient to you then an online Forex school would suit your needs perfectly. There are many different ways through which you can increase your knowledge about Forex trading. All you have to do is figure out which one’s the most suitable for your needs and preferences.

Are you looking for the best way to learn forex trading? Visit http://bestwaytolearnforextrading.blogspot.com today!