Forex Trading Education - The London Open Checklist

A thorough Forex trading education must include an understanding of the effect market timings can have on trading and liquidity.

One of the most active periods of the day is from the time the London market opens. Often around that time good trading opportunities will appear.

As part of your Forex trading education, learn to analyze market conditions around London open and begin to recognize good setups.

The following questionnaire and checklist will help.

London Open Preparation

About 15 to 30 minutes before London open check the answers to these questions:

- Are the MACD indicators on the 4 hour and 1 hour charts in agreement? If they are not going in the same direction be very careful!

- Is there MACD divergence on the 4 hour, 1 hour, or 15 minute chart? Look for other clues to confirm that price may go in the direction of MACD divergence.

- On the 4 hour chart what is the overall trend?

- Do a Fibonacci calculation on the last swing high and low and see if price is pulling back to an optimum retracement level or whether it is reaching a key extension level.

- Note price in relation to the 200 EMA (Exponential Moving Average) on the 4 hour, 1 hour and 15 minute charts. Is price bucking the trend? In other words, is price above the 200 EMA on the 4 hour and 1 hour chart but below it on the 15 minute? Then be prepared for price to go long at some stage. (Draw the opposite conclusion if price is below the 200 EMA on the 4 hour and 1 hour chart but above it on the 15 minute chart.)

- Are any Economic Reports imminent?

- As the candle closes on the 15 minute chart at London open, do you see any distinctive candle patterns such as tweezers, or doji's or hammers indicating price exhaustion?

- If I entered a trade right now in a particular direction, what would be the risk and where would I place my stop?

Within a few minutes of London open, if you see a number of factors converging from the analysis above, make a decision one way or the other:

- trade

- wait for clearer signals or a better entry point

Carrying out an analysis in this way each day at London open will do much to increase your Forex trading education.

It will make you aware of what is happening on the charts and in the marketplace and help you to arrive at conclusions.

There is no magic formula involved with Forex trading education. Put simply, successful Forex trading is the result of years of hard work, study, practice, and experience often gained through painful trading scenarios.

Eventually the newer trader learns mental discipline, and how to control the emotions - probably the biggest part of a Forex trading education.

Practice a procedure like the one above day after day and begin to see some progress as you get nearer the time you make profits consistently from currency trading.

Forex - What is it?

The international currency market Forex is a special kind of the world financial market. Trader’s purpose on the Forex to get profit as the result of foreign currencies purchase and sale. The exchange rates of all currencies being in the market turnover are permanently changing under the action of the demand and supply alteration. The latter is a strong subject to the influence of any important for the human society event in the sphere of economy, politics and nature. Consequently current prices of foreign currencies evaluated for instance in the US dollars fluctuate towards its higher and lower meanings. Using these fluctuations in accordance with a known principle “buy cheaper – sell higher” traders obtain gains. Forex is different in compare to all other sectors of the world financial system thanks to his heightened sensibility to a large and continuously changing number of factors, accessibility to all individual and corporative traders, exclusively high trade turnover which creates an ensured liquidity of traded currencies and the round - the clock business hours which enable traders to deal after normal hours or during national holidays in their country finding markets abroad open.

Just as on any other market the trading on Forex, along with an exclusively high potential profitability, is essentially risk - bearing one. It is possible to gain a success on it only after a certain training including a familiarization with the structure and kinds of Forex, the principles of currencies price formation, the factors affecting prices alterations and trading risks levels, sources of the information necessary to account all those factors, techniques of the analysis and prediction of the market movements as well as with the trading tools and rules. An important role in the process of the preparation for the trading on Forex belongs to the demotrading (that is to trade using a demo-account with some virtual money), which allows to testify all the theoretical knowledge and to obtain a required minimum of the trade experience not being subjected to a material damage.

Forex Trading Platforms: Trading Forex in the Comfort of Your Own Home

Trading in financial institutions is one of the best ways to make money. It is also one of the most promising career choices that people make today. With the opportunity to earn a lot of money, more and more people who are interested in trading in the financial institution have given up their jobs to take part in the financial market.

Today, the Forex market is the best choice for people who are considering making a career out of trading in the financial market. Apart from that, who wouldn’t want to trade in the most extensive and the most liquid market in the world which involves all the countries in the world?

The Forex market operates 24 hours a day with currency exchanges that can reach up to 2 trillion dollars each trading day. Also, it is the most liquid market in the world which also implies that traders can enter the market anytime they want and get their profits easily.

In the past, Forex was limited to big financial institutions and multinational companies. Only banks, central banks and large companies were allowed to participate in the Forex market. However, due to advanced communications technology and high speed internet and decreased sanctions in the Forex market, ordinary people can now trade and participate in the world’s largest financial market.

Because the Forex market is now available to everyone and because it is a very lucrative industry, online Forex brokerage firms began improving their services and accessibility. They now also designed different trading platforms suitable for different Forex traders. Not only has online Forex brokerage firms made their trading platforms accessible, they also keep on improving their software.

They also allow people to register with a Mini Forex account in which they can trade with a minimum margin of 100 dollars only or even less.

If you are interested in joining the Forex market, you only need a few things in order to get ready.

First, you need a computer with a high-speed internet connection. The fast internet connection is quite necessary for an effective trade to work. It will also minimize the risk of slippages that can cause you to lose money. So, if your area doesn’t have any high-speed internet connection available, you’d better forget about trading in the Forex market online. This will only make you lose a lot of money.

Second, you need to choose which Forex brokerage company is the best for you to hire. These companies will provide you with the Forex trading platform that you can easily download and install in your computer. The Forex trading platform is simply a software program that is vital for an online Forex trader.

It is essential for you to choose a trading platform that you are comfortable with. You should also make sure that the trading platform you choose provides precise and up to date real time data, security, and stability.

It is also advisable that the trading platform you choose should provide information on at least 16 currency pairs, execute orders with just a click of the mouse, have charting tools for technical analysis, and should also have a recording feature in order to store your trading history.

With all these characteristics, you can really make progress in the way you trade in the Forex market, as well as minimize the risk of losing money.

Look for a Forex trading platform that is simple to use and easy to understand. If you wish to know more about the Forex trading platform that a Forex trading brokerage firm offers, you can evaluate the possibility to open a dummy or practice account. This will allow you to practice without risking real money on trades while learning the ropes.

You will also get hands on experience on the Forex trading platform and then decide if the platform is for you or not.

Risk management is also an essential feature that you should seek for. If it takes too long to select a risk management order, you should think about looking for another Forex trading platform.

These are some of the things you should look for in a Forex trading platform. With a little practice in the demo account, you can be sure that you can get the hang of it in no time at all and start making money through online Forex trading with a trustworthy Forex trading platform.

FXCM: Your Online Forex Trading Solution

If you are actively trading in the New York Stock Exchange, one of the most active exchanges in the world, you should be very thankful. The average of its total daily transactions are approximately at U.S. $50 billion, making it the largest stock exchange in the United States in terms of dollar volume. There are many individuals who want to get their feet wet on the ground of this New York City-based stock exchange.

Yet, you are luckier if you are seriously involved in trading foreign currencies, or commonly known as Forex trading, which is considered to be the most extensive market on the world. Its average daily trading turnover is approximately U.S. $2 trillion, exceeding the combined dimension of all other equity markets, including the New York Stock Exchange. Thus, you are luckier since you have the opportunity of getting more profits out of that $2 trillion traded everyday.

If you are not yet involved in Forex trading, then you are not currently taking advantage of the benefits of trading foreign currencies—24 hour trading time, transactions conducted in real time, extreme liquidity, and others. Thus, you should decide to get a Forex trading account and start trading right away.

However, just like other types of investment, you must be under knowledge of what kind of ground you are stepping into. In other words, before getting a live Forex trading account, you must be properly informed first about the background of Forex trading. You must learn how you will maximize your earning potentials as well as decrease the risk that you are into through practicing with free demo accounts. Moreover, you must have a trading system to follow and the necessary tools that will help you analyze varying conditions of the Forex market to position yourself on the profiting aspect of a certain trade.

Once you know what you are getting into, you are now ready to get your live Forex trading account, web-based trading system and platform, and other tools that you will need for operating throughout your Forex trading career. Most neophyte Forex traders obtain their trading accounts and platforms through a Forex brokerage company or agents. There are many brokerage firms out there and you need to be selective, or otherwise you will suffer the adverse consequences.

If you are not still sure about which Forex trading company you will trust in the early start of your Forex trading career, why not trying FXCM? They probably got what you need and at the same time the key towards the success of your Forex trading career.

FXCM stands for Foreign exchange Capital Markets, a USA-based online Forex trading company that is founded in the city of New York. Since it was founded a while back, FXCM is now one of the major Forex institutions, particularly in online day trading, with an average trade volume of U.S. $70 billion per month. They offer their clients quick access to the speculative Forex market through online dealing platforms that allows forward and stop trading of 27 pairs of foreign currencies in addition to several precious metals.

If you will open a live Forex trading account with FXCM, you will obtain several benefits such as the following:

• WYCIWYG or “what you click is what you get” advantage. It means that the price you clicked on at the start of the deal will be the price you are executed at, thus no single movement on the foreign currency price.
• NRFQ or “no request for quote”. You can click on any live streaming price list and there are no requirements even on fast markets. Expect that there will be no dealer intervention and timers.
• There will be no commission collected for every transaction that will be completed using the FXCM trading platform. All profits will go to your pockets and no-one else.
• You are allowed to have multiple online trading platforms for maximized trading flexibility.
• With FXCM, your risk is only limited to deposits or funds. Therefore, you will never owe more than what you have invested in your Forex trading account. This means that there are no negative balances, whatsoever.
• You can open a live Forex trading account for as low as U.S. $5,000.
• There are 27 pairs of foreign currencies that you can trade within several clicks.
• You have access to 24-hour foreign currency trading and technical support services also on weekends.
• There are no confirmation delays—only instant and real time trade executions.
• Secured online trading platform.
• Technical analysis and real time charting tools for your better evaluation of the market.

With FXCM, the start of your Forex trading career is as good as a veteran trader. A good jump start and continuous success is waiting for you at FXCM.

Can you really make money in Forex

You have for certain been looking into how the Forex market works and you have questions like if you can or not make money in Forex. Many web pages assure you that it is very easy to make money in the exchange market and they even tell you that you can make loads of money overnight, but this is not the way things works, allow me to explain:

Forex gives you hundreds of opportunities daily to make small and great amounts of money, but it can only be achieved if you are well instructed and you practice with a demo account before entering the market with real money. Just like any job you have in life, you must prepare in theory and in practice to reach success.

You can make a lot of money in Forex, if you apply strategies and do a technical analysis of every movement of the market, skills you acquire from a specialized education. You probably ask yourself if you need to make a considerable investment to make money, which comes to you do not need a great amount of money; it all depends on your investment capacity, which allows you to open an account that better fits such capacity.

Types of Accounts:

1. Micro Account: Opens with less than $2000. You may operate mini and micro lots.
2. Mini Account: Opens with $2001 to $20000. You may operate mini and micro lots.
3. Standard Account: Opens with more than $20000. You may only operate full lots.

Also, Forex allows you to open accounts and make money through leverage, which means that a broker, with solid finances, lends you money for you to operate in the market and this way get earnings from the differentials in the appreciation or depreciation of the operating currencies. Forex can become a risky activity when the leveraging takes novice traders to over leverage, because they get greedy and they want to make a fortune with little capital at hand. This way, from 2 or 3 operations that end up in losses, the trader loses all of his capital. This is why it is important to know how to manage money, risk and every operation correctly.

You may leverage from:

• 2:1 = give $1 you will get $2
• 10:1= give $1 you will get $10
• 100:1= give $1 you will get $100
• 200:1= give $1 you will get $200
• 400:1 = give $1 you will get $400

So, the amount of money that you can make depends on the number of pips you obtain and the size of the account that you opened. For this reason it is vital to be realistic on how much you can invest at first in relation with what you can make.

Also, the amount to lose depends on the number of pips lost and the size of the account. Remember that from the time an trader enters into a position, he loses because of the spread or differential from the brokers in each pair. But if you use good strategies and correct money and risk management techniques, this will not be a relevant factor.

It is even more important to be able to increase earnings in the winning operations and minimize the amount lost in those in which we lose money. This should be clear. With good money and risk management, a Forex trader can make money even in a strategy where he loses 6 out of 10 times. How? In the remaining 4, his earnings are higher than his losses in the 6 operations that ended up in loss.

The same way, a trader could lose money even winning in 8 out of 10 operations, following the same logic.

For this reason you will notice the first time that you enter the demo account, that when you take a position in the market, immediately it will show a “loss” in your money, which really is not a loss, but rather it is the commission that your broker charges from that moment for each position that you take in the market. In the demo accounts they add this commission for you to always have this in mind when getting a real account.

It is important to realize that you must look for a trustworthy broker, since unfortunately there are people that try to take advantage of others. For this, we recommend you to examine the history and background of the broker. Even though you may be able to select a broker from a variety of countries, you must make sure they are legally established. For example: in the USA, a broker must be registered with the CFTC (Commodities Futures Trading Commission), or be a member of the NFA (National Futures Association). You may also verify this with a Costumer Protection Office, depending on his country of origin and its IT laws.

To make money in Forex, it is important that you know it will not happen overnight, it will take a whole process for you to become an expert trader. In this money making market intervene probability and consistency. Success is measured with profitability, and it does not matter the amount of operations, but also perseverance to reach your set goals in this business. For example, constantly following a strategy and not searching every week or month a better strategy than the one before (a very common mistake among new traders).

You may also get long term or short term earnings, meaning that you may choose to make only 1 or 2 operations in a year to reach your goal, which is possible only if you use the correct strategies and receive constant education. You can make 10 or more operations a day, a week or a month, to reach the same goal and get earnings and vice versa.

The recommendation if you are new at this is to start with few operations, but strong ones, in longer periods of time, like daily.

You can make money in Forex if you:

• Receive the proper education and training.
• Learn to determine in the market when to enter into a position and more importantly when to leave, either with losses or earnings.
• Use the correct leverage offered by brokers and you are realist when thinking of possible earnings.
• Are patient. Patience to practice, as well as for waiting the correct settings to enter into a position, as well as waiting to see for the right time to reach your goal for earnings.
• Do not get obsessed with reaching your earnings goal in the first week.
• Accept losses as part of the “investment game”.
• Properly manage your emotions and the psychological aspect of trading.

The Forex University specializes in courses for beginners and more advanced traders, and teaches how to obtain earnings in a constant manner, managing Forex as a business. For more information, you may go to the following link:

In short, it is possible to make money in Forex, but do not forget it requires: consistency, discipline, constant growth of our account, effort, time and study. Of course you will not become rich overnight; you will only be able to make enough money in the long run to considerably improve your quality of life. Remember that the reliability that you obtain monthly from your capital, you may not be able to find in any other type of investment.

The Importance of Forex Trading Education in Achieving Success

Someone who wants to become successful in forex trading should learn and understand the basics. There are many traders who lost a great amount of money in forex trading. It is because they are not properly educated about forex trading and its processes. So, to survive in the forex trading markets, it is imperious that future traders should have a forex trading education.

Forex trading can be the best way to earn enormous amounts of money. However, those traders who seriously studied the forex market conditions can be able to achieve success. Proper education allows them to learn different market strategies. Remember, forex trading markets are the biggest market in the world where instantaneous exchange happens. It is always a challenge even to knowledgeable forex traders and bankers. So, it is always a plus factor to traders if they thoroughly reviewed every angles and possibilities before performing the trade.

If you are going to read forums and reviews, you will find out that successful traders are those having proper knowledge about forex markets. They have decided to undertake education on the detailed information vital on trading forex. Therefore, every trade that they performed is considered an opportunity to learn new techniques.

Some people could think that they don’t really need education when trading forex. They believe that if they misguided the forex market, then they would be able to figure out its conditions to survive. This could be a great attitude, however ask yourself if you could support it.

Forex traders would find quite beneficial to undergo forex trading education from professional traders. There are various important forex trading factors that are being tackled to achieve forex trading success.

1. Forex trading system is completely discussed. The traders learn the three essential elements of a forex trading system that are profitable. It includes money management, risk management, and proper execution on the entry and exit market points. If the forex trading system is well established, then it can endure draw backs caused by market variations while retaining the consistent returns of profits. This is the secret equation needs to be mastered by every forex traders. In this case, the traders will stick to the system where it is giving them greater chances of earning larger amounts of moneyMoney management is considered the most essential factor in determining your success as a forex trader. If you are able to prevent financial risks then it can increase your probability of becoming successful. The trading account should be adequately funded by the money that you can afford and restricting yourself from entering a trade that can wipe out all your assets. Always take in mind that it is much better to start trading on small amounts and using stop-loss orders so that your first forex trades will not be the last.
2. The levels of market are also studied. It does not necessarily imply buying currencies at lower prices enable the traders to sell it on higher prices. Discipline is being taught to traders. Price behaviors are also learned consistently since it can fluctuate suddenly. However the traders are taught how to deal with this scenario.
3. They also learn how to emotionally detach themselves when trading forex. Always remember that emotions should never rule over your mind. So, forex trading education can guide you through the right direction. The psychology of trading are incorporated so that the traders should always act rationally so that the outcome of the trade will not be affected or altered. This allow them to make a good decision when entering or exiting a trade.
4. Forex trading education teaches forex trading methods to the traders. They can acquire proper mental position on trading forex and learn how to gain positive returns on their invested capital. Some traders focus on how they are going to make money rather than having their returns. So, educating yourself about building your wealth via consistent returns is beneficial. It is an advantage if you are properly acquainted with the forex trading environment before plunging into forex trading venture.

Make your learning an amusing experience. Don’t feel forex education is a dull or a boring activity. You should enjoy your education and think that it is your first step to discipline your trading habits, wisely manage your money, and attain forex trading success.

The Importance of Forex Trading Education in Achieving Success

If you want to be successful in any enterprise, you need to have persistence and dedication. Even your daily life requires it because if you’re a lazy person who wants to goof around, you’ll attain nothing of importance in your life.

Ever since you were a little kid, you were already taught with the value of good education. From your nursery days, until your graduation in college, you have dedicated many years to good education. But that is not the end.

Each time you encounter a new endeavor, activity, or thing, the first thing you consider is to learn about that particular thing or activity. So you see, no matter what we do, education goes on. And this is especially true with forex trading.

According to statistics data, over 94% professional traders lose a lot of money every day in forex trading alone. But don’t be discouraged; in fact why not use that piece of information to strive hard to get a forex trading education.

The financial market varies by the minute, or even by the second. Who knows which currencies are a good buy and which aren’t. Most traders, specially the starters, believe that they can anticipate what is about to happen in forex trading. But you see there is more to predicting the market; you also need to educate yourself.

First things first, you need to have a forex trading system containing the key elements, namely: money management, risk, and execution. If you have a well developed system, which gives a lot of weight to money and risk management, over time you can actually carry on draw downs while expecting consistent returns.

Forex trading is not only related to buying low currencies and then selling them when the price is high. Profitable traders can teach you more than just discipline, because you also need to learn about detachment. Ask a professional trader to show and guide you how it is done.

You must have the proper mindset if you want to be a successful forex trader. To achieve this, your capital should have a positive return. It is not all about profits especially when you’re just a beginner. You should first determine if you have a reasonable return of your capital.

Most successful forex traders have undergone some kind of education. Since forex trading is a high risk endeavor, it is not advisable to instantly jump into the trade.

If you absolutely rely on experience and instinct, you may not likely succeed in forex trading. But if you have undergone a forex trading education, you are more capable to handle demands and to deal with the stress caused by the trade.

By getting a proper forex education, you can learn all about the market mechanics, reading the forex chart, how to operate software, how it is closed, the right time to bid, and many more. It is the best possible route to take before plunging into forex trading.

The FX market is volatile, and you can understand the scenario better if you know how to read charts. It will be more simple for you to understand the different reasons behind these shifts, and can greatly help in minimizing the risks that you are going to undertake.

The very first things that you’ll learn in forex trading education are the basics. It includes margin concepts, order types, rollovers, bids, and leveraging. Appart from that, you can also learn about fundamental and technical analysis. And in the end, you should learn about trading psychology which can teach you about patience, discipline, and commitment.

It can also be good for you to learn about the financial market’s history. And knowing the past mistakes made by other traders will teach us how to avoid such circumstances. You can get a forex education online or in a traditional class.

Undertaking a forex education is an added advantage compared to those who haven’t had any. This is especially helpful for beginners, and even for those who have already been in trading for some time.

Easy Money on Global Forex Trading

There are different kind of businesses. But the easiest way of making money is to trade forex. One of the leading providers of forex trading in real times basis is the global forex trading. It first operation was in1997. It gives chances to individuals to trade forex online on real times and it offers an opportunity to most forex brokers to earn millions each day.

Global forex trading is currently serving over one hundred countries. It uses the DealBrook FX2 software and provides twenty four hours access on the forex market. It is also equipped with the highest quality of consumer service which is widely available in the industry of forex trading. The forex brokers have the chance to have an access on the prices of more than sixty currency pairs and provide analytical services from renowned experts. The traders are also updated with the latest news bulletin on currency status and available forex charts. Global forex trading is the only provider of trading platforms on forex appropriate for beginners as well as professionals.

There are several advantages when trading forex. It is quite accessible since it is open twenty four hours besides having the most liquid market. The leverage strategy is always available wherein the traders have the option in using a 100:1 leverage. This reduces the need for larger capitals that is to be opened on the traders account. Forex trading has no commission and the trading is extensively available over sixty currencies all over the globe. Forex trading is globally available that is why the traders have wider trading opportunities regardless of any market conditions.

Don’t presume that forex trading is only for big investors due to the given advantages. Global forex trading have open the way for smaller transactions. In this way, both small and big investors are given the opportunity to earn money from trading forex.

In singular cases, some people assume that the market for global forex trading dwarfs the equities. However, this is not true because the volume of forex trading even exceeds two trillion dollars each day. So, global forex trading is conceived as the leader in the field of competitive market exchange. There are many reasons why global forex trading is very exciting.

- The forex market is comprehensively available. The traders can trade currencies twenty four hours a day, seven days a week regardless of its oscillations. This provides greater market opportunity for traders compared to equities which can only transact business on market hours or when stock exchanges are available.

- The global forex trading potential leverage is overwhelming. Compared to stock trading, the trader can either trade with the money that they have or open margin accounts and double the leverage when trading. Take for instance, you funded your margin accounts with 25,000 then you can control an equity position of 50,000. But in global forex trading, your original capital can obtain leverages up to 20, 50, or even 100 times.

In this way, the traders can open a forex brokerage online with only 5,000 dollars and can manage positions up to 200,000 dollars or above. And if the trader can fund an account with 10,000 dollars then he can control positions up to 500,000 dollars. So, whether the trader can only gain 5% on the positions, then it would still equal to a 25,000 dollars gain with only an initial capital of 10,000 dollars.

- There are plenty of traders in the forex market. However, even if it is possible to earn fast profits, the risk of losing is also very high. That is why the technical and fundamental analysis of forex markets is essential. It is recommendable for traders to get forex education to have a good start. It could increase their chance of becoming successful forex traders. The traders should guard their business from potential losses.

Forex Trading Software: The Foundation of Forex Trading Improvements

The Forex trading software has provided many reasons to make Forex markets much better. The software efficiently integrates different currencies in their respective markets around the world. It has really enabled Forex traders to do business 24 hours a day.

There are two alternative Forex trading software. The first is known as service side software. This software works by letting the users log in using their Forex market accounts. The user is asked to introduce their passwords and user names. Then they can already execute any operation associated with the accounts that they wanted.

The other kind of Forex trading software is known as client side software. This type of software is installed by technicians in the computers of the traders. Both varieties of Forex trading software are working jointly to allow the traders to make business transaction any time of the day or even during the night.

Forex trading software provides many advantages to the traders. It includes the relationships of currencies to trading and vice versa. One of the greatest benefits is the real time accessibility on Forex quotes. It can also provide helpful information about past behavior of real time quotes and rates. The charting mechanism is also an excellent advantage. It can help the trader to gain great profits if it is properly interpreted.

Another advantage is that Forex trading software can have access to charting software. In this way, both software can work together to give the traders the complete details they need in order to make the best possible decision.

Tips For Better Forex Trading Learning

Many people who have decided to take part in the forex trading should educate themselves first. It is essential to know even the basics of forex trading to gain success, but this is no guarantee, not by a long shot, you need to know more than the basics to even have a fighting chance of succeeding. There are several ways to learn forex trading. You can join online services, enroll in a forex trading school, become an apprentice of a forex trader, or do it alone. However, doing it alone implies a lot of risks especially for beginners.

For new traders, it is much better to choose the safer ways of learning forex trading. You are going to benefit from experienced instructors who are already trading forex in real times. In this way, you are being familiarized with the real market conditions. You are given the chance to see the actual processes and decisions which you can later on adopt. Nevertheless, it is your own strategy that will win you up.

There are six simple steps that novice traders can follow in order to be successful in the forex markets.

1. Right attitude. The traders who are successful in trading forex takes on the attitude of doing whatever is necessary to achieve success. This stresses that success lies on the person who are trading forex itself. It does not matter if you read forex trading tip sheets or listen to forex trading guru. It will become invalid if you don’t possess the right attitude for success.

You can conduct experiments on your own for two weeks together with other novice traders. They are often called as turtles. Learning forex trading is avoiding the trap of believing that you can be successful by following someone else. Just get the right knowledge and develop a strategy of your own.

2. Right method. It should include long term trends. Keep in mind that the trend on big currencies lasts for months or even for years. It is your responsibility to lock yourself into these trends to make big profits. It is quite advisable to use the breakout methods to catch long-term trends. This method is already proven by leading trading systems. Good software is also recommended for use. It allows the trader to test the trading method that was chosen and later on trade it on real times.

You need to know proper charting and mapping. There is already available software that will assist you with market moves. It will allow you to calculate the best times for selling or buying when you are able to read forex market charts.

3. Right discipline. The traders should discipline themselves by strictly following on their developed methods even when during losing periods. It could teach them new techniques on how to survive the forex markets even when downfalls strike.

4. Right knowledge. The traders can quickly learn the breakout method, however, they should also overcome psychological hazards involved in forex trading. It is wise to read motivational books that mainly focus on this matter.

5. Take the risks. The common mistake done by most forex traders is trying to limit the risks. In the end they may suffer great losses because they are being blocked out in the forex market. The trader’s direction is right however the trade does not have enough room for downsides. Always keep in mind that in forex trading risks lays the rewards. There is a difference between rushing in taking risks which are already calculated. It only allows you to wait for the right opportunity.

6. Trading in isolation. The trader should learn this to keep focused. Remember that if you are open to the views and opinions of others, it may be daunting for you if you find it very different. It does not necessarily imply that you follow the opinion agreed upon by many traders, because most often, many traders incur in losses.

Forex market is conceived as the largest market in the world. It is open for operations twenty four hours a day, five days a week. Its processes are been carried out in real times without boundaries. The trader’s success also depends on the right decision making. Learning forex trading have no barriers and entry points so you need to have better understanding before plunging into business. Although some people suggest that learning forex while trading is the best, it is always your decision to choose the best way to learn which will suit your needs.

Top 10 brokers to invest in Forex

FOREX TRADING

How to use the RSI indicator to invest in Forex?

What is RSI?

RSI is an oscillator indicator used for technical analysis and it means relative strength index.

In June of 1978, Welles Wilder developed the Relative Strength Index, providing step by step instructions and full explanations for its use. It caused hundreds of of forex traders to use it and thousands more still use it today obtaining good results.

RSI is an indicator that compares a given time, the individual moves up or down in the market and identify overbought and oversold conditions of a given pair. The RSI is an oscillator that provides trade signals before they occur in the market.

In other words, the RSI allows you to compare the two averages and it is expressed as a percentage. If the average of low and highs are equal, the RSI has a value of 50%, this means that the relative strengths are balanced. However, if the value of the RSI is above 50% it means that there is more rising strength than relative bear strength, and if it is less than 50% it means that there is more bearish strength than bullish.

The RSI is considered to work most effectively in ranging markets (none trending), but you must remember that as any other technical indicator, signals must be confirmed with other indicators for them to work optimized.

The RSI is calculated using the following formula:

RSI = 100 – 100
______
1 + RS

RS = Daily Average of upward closures / Daily Average of Downward closures

Using the Bollinger Band indicator to invest in Forex

What are Bollinger bands? It is a technical analysis indicator used in the financial markets, which are used to determine market volatility and relative prices in a period of time determined by the trader.

This technique was developed by John Bollinger in the early 80’s. Bollinger was based on mathematical formulas commonly used by statisticians to determine the standard deviations of the data series and adapted for use in the Forex Market. Bollinger bands are used to determine over-bought and over-sold levels.

The use of Bollinger bands is more effective in markets without trend (ranging markets) and it is suggested that it should be applied in periods of 20 days but it may also be used even in periods of 50 days.

Bollinger bands consist of three lines drawn in relation to price action. These three lines are:

• The middle or central band: it is as a rule; a simple moving average and provides information on market trends. From the middle band it is calculated upper and lower bands by one standard deviation.
• The upper band: is equal to a moving average of 20 periods and 2 standard deviations above the moving average.
• The bottom band: is equal to a moving average of 20 periods and 2 standard deviations below the moving average.

How to use Bollinger bands to invest in Forex?

You can use this indicator to determine market volatility and relative prices. You must start tracing the 3 lines in the graphs, which provide you with the indications of when you should buy and sell.

In Markets without trends the strategy is to sell in higher bands and compared in the lower bands. The interval between the upper and lower band will provide you with information on the volatility or market activity. This means that the higher the volatility in the market is, the higher the standard deviation and because of that the bands are a little broader. If on the contrary, it happens that there is less volatility in the market, the lower the standard deviation and thus the bands will be narrower.

On the other hand, if you notice that prices will break through the upper band, in the band that is contrary, we must expect a continuation of current trends.

Calculate the moving average (MA) using the following formula:

MA = (P1+ … + Pn)/n

Pn = Price at an interval n
n = Number of periods

• Subtract the moving average (MA) of each data point (p) used in calculating the moving average. This will give you a list of deviations (d) of the mean:
• Finally, calculate the three Bollinger Bands using the following formulas:

Superior Band = MA + 2?
Media Band = MA
Lower Band = MA-2?

It is not recommend using this indicator in trending markets. But if you do, you should buy right on the break above the upper band and sell right on the break below the lower band. This is important if you notice that the bands shrink too fast (consolidation), it is likely to occur a violent break, a moment you can use to buy or sell.

Bollinger Bands provide you with 3 types of signals:

• Contractions (squeeze) means that there is less volatility in the market.
• Expansion (expansion) means that there is greater market volatility.
• 2.0 STDV close : Breakouts

What you should NEVER do?

• Never buy or sell without observing the candlestick patterns.
• Do not buy or sell if it has not detected a clear breakout of the market.
• Do not use this indicator in periods longer than 100 days.
• If prices touch the band alone, it does not mean that you should buy or sell. Never trade without a preliminary analysis.

How to use the moving average indicator to invest in Forex?

What are moving averages?

Moving averages are indicators of technical analysis used in Forex, which will help to identify trends to take the market over a period of time determined by the trader with the currency of their choice, taking as reference the average price currency. (Also known as MA). It’s called “moving” because it always indicates which will be the average price of the current pair. Thus, the average is in constant motion, this will keep prices of the currencies in the market.

There are four types of moving averages:

• The simple moving average (SMA: Simple Moving Average): This is the average mentioned above, this has the characteristic that each day that passes, it eliminates the first day of the series in the calculation and adds the last day.

• The exponential moving average (EMA: Exponential Moving Average): Includes all historical data, applying a weighting exponential (the exponential average of the first day is the closing of that day). This average places priority on closing prices and less priority to older data. It is determined by the following formula:

Today’s Average = yesterday + (Today’s Close – Yesterday´s Average) x (2 / n +1)

• The weighted moving average (WMA: Weighted Moving Average). It gives priority to the most recent prices, so that recent prices have more influence than the former ones.

• The smoothed moving average: Assigns the same weight on past prices, but not to recent prices.

The difference between the simple moving average and the last two is that the moving average uses the same weight for each period and the EMA and WMA assign more value to the periods that are closer.

Using the moving average indicator

It is important to first establish the time period you want to trade; you can take long periods of years or months or you may take periods of days and hours. But it is important to note that like any technical indicator, the time frame in which you trade is very important because it determines the probability of the success of a trade. In theory, in major timeframes, more exact the signals. In this case, while the shorter the time period moving average is it will be more sensitive to price changes but less robust. If, however, it provides long periods of time it will be less sensitive to price changes but also more solid.

For example, for you can determine the simple moving average of the USD/EUR over a period of 20 days. In that period the data collected of prices that has had this pair during this time and then it will divide it by the same number the period you set (in this case 20). When you get to determine the average, you will be able to identify trends in the market.

The common formula for calculating the moving average is:

The moving average is the result of the sum of the last N values of the price or price in the market, divided by N

Formula: x=Exi/n

• x should be read as mu and it is the moving average we want to calculate.
• N is the period for which we calculate the moving average.
• Xi (where i takes different values from 1 to n) are n values of the share price in the N days considered.

Moving averages are also used to establish significant levels of support and resistance. The periods that are more used to establish support and resistance levels are: SMA (50), SMA (100), SMA (200), EMA (144), EMA (89) and EMA (34).

How to read moving averages signals?

If the price is located above the moving average it is considered that the market is in an uptrend. If the price is set below the moving average it is considered that the market has a downward trend. At the same time you can determine the strength of the trend by observing the pending of the moving average. When there is no pending this means that the market has no trend.

You can observe buy and sell signals when there are crossings between short periods of moving averages with long periods in the direction of the trend. So also when there is disruption of the moving average. This you will see it with more detail in the following graphic.

Moving averages give you signals:

• When 2 moving averages cross
• When there are breakouts in the moving averages

Now let’s see it in the graphic:

1. To see the trend

For example, here we are using the moving average to identify the trend. In this case we are using the rule’s position in the market price in relation to the moving average.

• We see a 20 in yellow
• 100 in red
• 200 in blue

Here is an upward trend since the price is above the moving average.

The rule is: When price is above the moving average it will show an upward trend and on the other hand, when the market is below the moving average then it will follow a downtrend.

The following chart shows a downtrend, since the market is below the moving average.

2. When the averages are growing:

Other methods are for example when crossing moving averages may be an indication to buy or sell

• We see yellow at 20
• In 100 red
• In 200 blue

When the yellow line crosses (short period to 20) with the line with the long-period moving average (200) it indicates that it activates the signal to sell.

When a short-period moving average (yellow line) goes down and crosses a long-period moving average (blue line) it activates the signal to sell.

When a short-period moving average (yellow line) goes up and crosses a long-period moving average (blue line) it activates the signal to buy.

3. When used as support or resistance

moving average can also be used as support or resistance, on the graph the level of support we see rejects the growing market that is approaching.

How Gold Affects the Forex Market

The commercialization of gold has its origins in ancient times, when this metal was a sign of wealth and social position; it was used primarily as a reference to establish the exchange rates among currencies.

The ¨gold standard¨ is a monetary system in which the values are defined as a determined weight in gold. Under this standard, the institutions issuing the money guarantee the backing of the bills of that amount in gold. In the past, the same was used to commercialize commodities and trade in other currencies. Those who defend this system argue it is more resistant to the expansion of credit and debt, since the money backed by gold cannot be created arbitrarily by the governments. This would prevent artificial inflation due to the devaluation of a currency, and it supposedly eliminates the uncertainty of such currency.

But the gold standard began to show its weaknesses when an economy strengthened, and increased importing foreign services and goods. This would empty out the gold reserves necessary for backing currency, reducing the monetary mass, followed by an increase in interest rates, and a slowed down economic activity leading up to a recession. Then, the low price on the merchandise would generate a massive buy from foreign countries, reverting the process. The oscillating patterns of peak and fall maintained until the bursting of the First World War interrupted the market flow and the free movement of gold.

After both Wars, the Bretton Woods Agreement (1944) was issued as a product of the resolutions made at the Financial and Monetary Conference of the United Nations, in which rules were set for commercial and financial relations between the most industrialized countries in the world. In this was decided to create a World Bank and an International Monetary Fund, and use the dollar as an international currency, fixing its value in terms of gold at 35 dollars an ounce (at that time the United States held more tan 60% of the gold reserves in the world). The Agreement expired in 1971, and by the year of 1973, the currencies of the most important industrialized countries started to flow more freely, controlled by the supply and demand forces that acted on the Exchange Market. New financial instruments appeared, the market was deregulated and the commerce freed.

In the 80´s, the technology opened new frontiers and the circulation of capital between countries accelerated, extending the continuity of the market throughout the time zones in Asia, Europe and America. Currency transactions shot up from around U$S 70 billion a day in the mid 80´s, to more than $2.5 trillion a day, two decades later. The combination of low margin and high leverage has changed the way in which the interbank market for currency operates. The Exchange Market, which before was exclusive for big investors and financial institutions, today is available for a single investor and not so big institutions thanks to the Internet and online brokers, with real time transactions and charts.

Gold in the Forex Market

In Forex, the symbol for gold is XAU. The price of gold is measured by its weight, and it refers to the value of an ounce in dollars. Transactions with the prices of gold are done the same way as with currencies, by two way or OTC (Over the Counter). This means, managed between two parties without the need of a third party to consolidate the trade. These types of transactions are negotiated in a virtual manner, since they do not require the physical exchange of the commercialized merchandise, considering gold as “XAU,” as if it were just another currency. These operations are only done in regard to the United States Dollar (USD).

In general, when the price of gold increases, the value of the dollar decreases. For such reason, investors operate in gold to balance out their earnings and loses against the dollar. Also, since gold tends to maintain its purchasing power over time, investors usually purchase this currency to counteract the effects of inflation and the variations in the value of currencies. The purchasing power of many currencies has generally diminished as a consequence of the impact of the increase in prices of commodities and services.

In the Exchange Market, some investors also purchase and sell gold due to speculations, trying to make profit from the small fluctuations in prices. Nonetheless, the price of gold is very unpredictable, since it is mainly used as a purchasing power reserve, and it is consequently subject to many monetary and psychological factors. Investing short term to make more profit than with other types of investments can be very risky.

Since it is used as a reserve, the price of gold is closely linked to how other alternative investments behave, how the currencies, bonds and stocks are. The price of gold tends to rise when in the middle of monetary instability and the fall of capital markets. Also events such as wars and natural disasters influence on the price. The price of gold has been rising due to a weak dollar and the unstable stock market situation. Nonetheless, its real price, adjusted by inflation, is today much lower than it was in the early 80´s. Either way the current trend is in the rise, since in the last five years the nominal price of gold rose from US$330 an ounce in April of 2003 to US$900 in early April of 2008.

The rising prices of gold can affect other currencies, specially those countries with the greater production of this metal. For example, Australia is the third highest exporter of gold, and Canada is the third major producer. Therefore, we may speculate with transactions in Australian or Canadian dollars waiting to become stronger as the price of gold rises.

In the forex market, gold is neutral, which means it is not connected to any particular country, and increments in its price influence the transactions in diverse currencies. The prices of gold are important catalyst in the forex market.

Currently there are five main gold markets, all of which are based off of New York, London, Zurich, Hong Kong and Sidney. Unlike stock markets, the price of gold is subject to the perception of some important brokers who communicate with each other and “set” the price several times a day. This process gives more stability to the given price offering points of reference which are updated according to how the supply and demand move. The fact that all markets are in different time zones, allows transactions 24 hours a day. The main currencies used in these transactions are the dollar and the euro. A while back the British pound was the dominating currency, it is not so today.

Gold plays an additional role, which is to serve as a purchasing power reserve. Even though it may be used in productive processes, the more part of the demand of gold comes from its use as a reserve.

Reasons to invest in gold

1. Gold is not affected by inflation nor devaluation. Nonetheless, it does not lose its daily value like it happens with paper money.
2. Gold is considered as a wealth reserve. Gold has demonstrated to improve its value in times of crisis or war, when alternative investments tend to fall.
3. Gold is NOT under political control. No government can influence on its price.
4. Currently, gold reserves are limited. This influences positively on its price, since it must rise when it is a limited resource.
5. It is an easy investment. It is a currency accepted globally and it does not present many difficulties to exchange, nor exaggerated taxes.
6. It is a safe and worthwhile investment. In 2009, up to now it has a return of about 17%.
7. Its main use is for reserves. There is very little gold for sale since it is used as a reserve, therefore we may expect its price to continue increasing
8. It allows diverse forms of investments. Bricks, deposit certificates, future and options on gold, investment funds.
9. Gold is considered the best investment in times of crisis. Gold is considered a good liquid asset and its value always increases during these times..
10. It does not pay VAT (Value-Added Tax)

How News Affects Forex Fundamental Market

Fundamental Analysis (FA) is one of the main methods to predict the future exchange rate of the currency. Try to understand the livelihoods or “building blocks” essential to an economic system through the study of a diverse range of economic, political, social trends and legislative frameworks of a country. Fundamental analysis helps to understand the formation of prices and to predict the factors that produce changes in the future as well as primary processes that make the functioning of the market.

However, it is not advisable to base decisions only on forex trading fundamentals, because these do not provide information on entry and exit points, making it difficult to control risk when using leverage. A successful trading strategy should contain a combination of fundamental analysis and technical. The first is to help build a trading strategy. The main difference between them is that fundamental analysis is applied only to a particular market and says what “should happen” (the cause), on the other hand technical analysis focuses on what “actually happened” (effect) and allows experienced analysts to follow multiple markets.

The basic trading strategies are based on macro advice on where a currency should trade based only criteria related to price action. This includes usually know the economic conditions of the country that the currency represents, monetary policy, and other essentials.

Economic Indicators

Economic indicators include a wide variety of statistics, figures and financial evaluations. This information is analyzed and provided by various financial organizations around the world, as central banks and national treasuries. The professional traders closely follow those indicators for making decisions and are attentive to the dates that are issued each. For this is that we use economic calendars.

Continuing, are some examples of economic indicators used most frequently in the United States that affect foreign exchange market trends generating and editing changes.

• Consumer Confidence Index: This consists of a survey based on a sample of 5,000 U.S. households. It is considered one of the most accurate indicators of the level of confidence and is of great importance since the consumption set two thirds of the U.S. economy. It is assumed that trust and power consumption increases when there are more jobs, increase wages and fall when interest rates.

• Report on Employment and the Employment Situation Report: They gather data from 375,000 businesses and 60,000 households, including: number of jobs created or eliminated, average salaries, average weekly hours worked, etc. Divided by economic sectors. The report of employment status is an indicator showing the monthly changes in the unemployment rate and the average number of hours worked a week and average hourly earnings, which would give a measure of labor market tension, a determinant of inflation.

• Ads Rates FOMC (Federal Open Market Committee): The interest rate of one currency in circulation is the price of money. As it stands, most people try to hold and buy the currency, strengthening the value. This is a very important indicator of the inflation rate and a great promoter of the market.

• ISM Manufacturing: This index consists of a compilation of data collected from purchasing executives in over 400 industrial companies. Reflects a composite average of 5 key economic areas (new orders, purchasing, manufacturing, use, purchase orders, and inventory). Above 50 points means the growth of economic activity, and below contraction.

• NonFarm Payrolls: It tries to reflect changes in the total amount of payments of any workers except government employees, staff of private homes, employees of nonprofit organizations, farm workers. Represents approximately 80% of workers who produce the total GDP of United States. It is used to help the government determine the current state of the economy and predict future levels of activity.

• Sales and Retailers: The retail sales are a key driving force of the American economy (two thirds). This indicator measures the total consumer spending in retail sales. It is used as a measure of the activity and consumer confidence.

• Tankan Survey: Economic Survey of the Central Bank of Japan that includes thousands of Japanese companies with a minimum specific capital, and is used in formulating monetary policy. Includes questions about current trends and conditions in the workplace and their respective industries, as well as its prognosis on the level of economic activity for the coming quarter and year. It is a great promoter of the forex market for JPY pairs.

• Trade Balance: It is the largest component of the balance of payments of a country. The trade balance measures the difference between the value of goods and services that a nation exports and the value of goods and services imports. Trade deficit exists if imports exceed exports, and surplus in the case. It is a big market mover.

• Composite Index of Leading Indicators: An index used to predict the direction of economy in the coming months. It consists of ten indicators: 1. Amount of average hours worked by employees in manufacturing, 2. Amount of applications for unemployment insurance, manufacturing 3. Amount of new orders for consumer goods, 4. The speed distribution new merchandise to vendors, 5. Amount of new orders for capital goods unrelated to defense, 6. Amount of new permits for construction of residential housing, 7. Indicator of S & P 500, adjusted for inflation 8. Added money, 9. The gap between interest rates in the short and long term, and 10. Consumer sentiment.

• Industrial Production Capacity / Capacity Used: It is a measure of changes in the production of factories nationwide, mines and utilities, as well as industrial capacity and the amount of resources being used. These indicators are very important because the third manufactured shape of the economy.

• Initial Unemployment Claims: Number of people seeking unemployment benefits for the first time. It consists of large weekly fluctuations, so the average of four weeks is a more stable data.

Indicators of inflation are generally used when it comes to predicting the direction of a currency in the forex trading day. Inflation has a material effect on various economic factors including interest rates, unemployment and the price on-line foreign exchange. One of the measures usually taken to combat it is to raise interest rates. The instant effect on forex market is that the specific currency of that country increases its value. At that time the currency is sold and he falls again, which in the long term, an increase in inflation means a drop in the price of the currency.

The indicators of inflation include:
• Consumer Price Index (CPI): A measure used to measure inflation and as an indicator of effectiveness of government measures. It is one of the indicators used in forex trading, as the monitoring of changes in commodity prices, can predict changes in foreign exchange.

• Price Index of Production: It is also a good indicator of inflation, but not as much as the Consumer Price Index. Reflects the change in input costs of manufacturing. It consists of several indexes that cover a wide range of areas affecting domestic producers.

• GDP (Gross Domestic Product): This is a crude measure of market activity. Represents the monetary value of all goods and services produced by an economy in a given period (usually annual, quarterly cut). It includes consumption, government purchases, investment and trade balance. Indicates the growth rate of the economy.

Forex Trading 201: Learning Forex Trading Strategies

If you’re a potential investor who’d like to make it big in the business and financial world, then you go for forex trading. The FOREX, also known as the foreign exchange market is one of the largest financial markets in the planet, with an estimate of $1.5 trillion turn-overs each day. Here are a few strategies on how to make it big in the forex market.

Strategy One: Know your market. The best way to get advantage, earn profit and minimize losses is to familiarize yourself with the market and how the whole system works. In the forex market, the players are generally commercial banks, central banks and firms related with foreign trade, investment funds, broker companies and other private individuals with large capital. With the speed and high liquidity of asset, most companies engage in this business than in any other trading venture. Transactions are done in a jiffy; there are no membership fees and there is always the attraction and promise of big, big profit.

Trading is performed in pairs. The most commonly traded currencies are usually the US Dollar, Japanese Yen, Euro, British Pound, Canadian Dollar, Australian Dollar and the Swiss Franc. The more commonly traded currency pairs are the US Dollar and the Japanese Yen, the Euro and the US Dollar, the Swiss Franc and the US Dollar. In Forex trading, everything is speculative and virtual. There is no real product being sold or bought. The activity mainly consists of computed entries made on the value of one currency against another. Say for example, you can buy Euros with US Dollar, hoping that the Euro will increase its value. Once its value rises, you can sell the Euro again, hence earning you profit.

Strategy Two: Learn the terminology. There are three concepts you need to know in the currency market. Pips refer to the increase of one hundredth of a percent of the value of the currency pair you are trading. Usually each pip has a value of $10 or $1. Volume is the quantity or amount of money being traded at one particular time in the market. Buying is the purchase of a particular currency. A trader buys with the hopes that the price of the currency will increase. Selling is putting a currency up for grabs in the market because of a potential or possibility of a decrease in its value. There are also two techniques of analysis usually used in this business – the fundamental and the technical analysis. Technical analysis is commonly used by small and medium players. Here, the primary point of analysis revolves on the price. Fundamental analysis, on the other hand, is used by bigger companies and players with higher capital as it involves looking at the other factors affecting the value of a particular currency. In this type of analysis, the player also looks at the situation of the country, particularly issues like political stability, inflation rate, unemployment rate, and tax policies as these are seen to have an effect on the currency’s value.

Strategy Three: Develop a sound trading strategy. Your trading strategy would depend on what kind of trader you are. The basic thing with developing a trading strategy is to identify what kind of forex trader you are. A good trading strategy should minimize, if not, eliminate losses. Plan also the size of your transactions. It is better to conduct many different trades than one huge transaction. Not only does it develop discipline, but it also lessens any possible loss as only a fraction of the capital is affected. Part of a trading strategy is developing the values of discipline and proper money management.

Strategy Four: Practice. Try paper trading, a very good way to practice your skills, see how the market works, and familiarize with the software and tools being used. There are online brokers who allow free paper trades, which allows practice and experience before doing it with real money.

Strategy Five: Choose the right forex dealer. Make sure that they are regulated by the law. Pay attention to dealers with investment schemes that give out too-good-to-be-true-just-false-hopes promises. Analyze investment offers before getting started.

Forex trading may seem simple and manageable. But the emotional stress, the demands and challenges of being a forex trader requires more than simply the knowledge of the market. It requires more than just a keen and sensible head for business. It’s all about a gameplan, a strategy.

Major Components of Successful Forex Trading Strategies

In the past, the forex market was open only to long-term investors, banks and people who had greater capitals. The trading occurs through an agent or voice broker who will inform clients on what is occurring. Later on, it was replaced by a computerized automated systems. This was the early form of forex trading strategy.

The trader which is either home-based or office-based or retail investor can potentially trade on real time with different banks with an aid of a broker. The broker then uses the computerized platforms of trading. It contains traders on live desks which places the trades on the broker’s books or on real investors. However, once the trade was placed in the broker’s book, 95% of the money will be lost by the traders. So the brokers take advantage on them.

Forex trading strategy consists of two major components. The first one is the technical analysis. The technical area is based from the charts. It uses a mathematical formula to analyze the market movements. The traders learn about announcements and news on economics which influences forex markets. Its fundamental side is helpful in proper identification of the do’s and don’ts.

Technical analysis uses chart indicators. It is helpful in determining the areas of resistance and support. The situation where the price reverses, stop or get stuck are revealed. The method that is very precise and popular in calculations of the levels of resistance and support is the Fibonacci. Seven hundred fifty years ago, Fibonacci discovered a sequential number form. Its proportions are also found in nature such as sunflower seeds, and pineapple rinds. This method is usually learned in mathematics during your high school days, called as Fibonacci sequence. It says about finding the next number given with a series of numbers.

If Fibonacci numbers are put adjacent to each other, the percentage ratios are obtained. It can then be plotted on the chart. However, you don’t need to turn into a math wizard just to do this. The charting forex software is able to do the Fibonacci sequence for you. The key areas of resistance and support are potentially revealed to you as you move along the charts. The Fibonacci sequence combined with proper indicators can show the strength and momentum of the latest market condition. It will help you create a strategy that will be most lucrative to you just by basing on this mathematical rule. The rules clearly states that history can really be repeated, as what has happened before in the forex market can still happen in the future.

The second component is the fundamental analysis. Each day, there are figures being disseminated to reveal some economic scenarios of a particular country. Take for example, non-farm payrolls that can possibly bring unforeseeable effect on the forex markets. The effects will depend on the previous data and the figures implications. The most important rule for beginners even for veterans is to keep away from the market when important announcements take place.

Forex trading profits are being made almost similar to a traditional business. The procedure is quite simple. You are going to purchase something at a lower price then sell it at higher prices. The only difference is that in forex trading this can be reversible.

The process is very simple. A trade is being placed either in the sell or buy categories. Then the base currency will automatically buy or sell its opposite currency in pairs. The price will change on real time every second. Take for example; you purchased the GBP/USD pair. It literally means that you have purchased the pound currency and sold the dollar currency. You want a rise on the pound’s value which will later on have a higher price when you resell it in the forex market. That would make a profit on the value difference.

If the brokers allow you to have 200:1 capital leverage, then you have the possibility to control a lot more money than what you really have. It is because you have bought one currency and sold the other. So, your capital can stay unmoved. The only critical part which should be considered are the proportions which can be either gained or lost whenever changes in currency pair values occurs. Other than that, the basic forex trading strategies are great.

Maximizing Profits and Minimizing Risk With a Different Forex Trading Strategy

People need to earn money in order to live a comfortable life. They need it in order to pay for the service bills, pay for food, for education and other things that are necessary in life. This is why people tend to do anything to make money. Some people work in a company, some people prefer putting up their own business and some others trade in the financial market as a career.

A great financial market that you can really make money from is the Forex market. The Forex market is the largest and the most liquid market in the world, trading during 24 hours a day and exchanging up to trillions of dollars each trading day.

In order for you to be successful in this market, you need to know the basics about the Forex market. You need to learn how to trade, when to trade and what to trade. You will also need to know the different trading strategies in the most extensive financial market in the world which is the Forex.

Knowing about the different trading strategies in Forex will help you minimize the risk of losing money and increase your chances of making big profits.

Firstly, it is important for you to remember that the Forex market can give you the chance to earn a lot of money. It is a known fact that people who have traded in this very liquid market have made millions of dollars almost overnight. You also have to know that the Forex market is also a very risky market to be in. It is also a known fact that many traders in this market have experienced extreme losses even to the brink of bankruptcy or beyond.

This is why you should know the different strategies that are required in the Forex market. Without these strategies, you will be like a blind man crossing a busy intersection with no one to guide him.

First, you need to take note that Forex trading strategies are very different from the strategies used in stoke trading. If you know about the different trading strategy in Forex, then you will possibly earn a lot of money from this huge financial market.

One of the most useful strategies that you can apply in the Forex market is called leverage. This is one of the most common strategies that you can use in the Forex market and most Forex traders are acquainted with the leverage strategy and many have made big profits from this strategy.

If you already have a funded Forex account, you can use the leverage strategy to help you trade successfully in the Forex market. Leverage strategy works by giving you 100 times the amount of money that you can trade in your deposited account. Therefore, if you do win, your income will also increase 100 times. This will allow better results in your trades.

Another strategy that is often used in the Forex market is called the stop loss order. This strategy is used to protect you from potentially losing a lot of money. This works by letting you choose a preset point in the trade where you will not trade. So, it will eventually lessen the risks. However, if the movement of the currency is not like what you actually predicted, you will end up losing potential money making opportunity with this kind of trade.

Automatic entry order is another Forex trading strategy that you can use when you trade in the Forex market. This will let you to enter the Forex market automatically when the price of certain currency is right for you. The price is predetermined and once it reaches that predetermined price, you will be automatically entered into the trades.

These strategies will help you trade in the Forex market more effectively. It will eventually help you minimize the risk and maximize your money making potential. However, you should always remember that you need to know when you should use these strategies. It is also important that you should remember that there is always the risk of losing money when trading in Forex. These strategies will not necessarily eliminate the risk but will minimize it.

Top Facts About forex Trading Systems

Forex is conceived as a financial system on the foreign exchange. It allows the trader to purchase foreign stocks or currencies. The forex trading system is popularly increasing in the internet in leaps and bounds each day. It provides useful information about the companies wherever it is located. The traders stay informed so that they can make a careful decision when purchasing and investing their money. Several forex trading systems are allowing the traders to make withdrawals, online inquiries and purchases so that they can create extra wealth by using their invested money.

Forex trading systems involves money investments from a company which is located overseas. Getting more information regarding the company is helpful because you can obtain the latest available programs and processes. You can also double or triple your invested money within a short period of time. You can get the forex trading system that only requires a small amount of investment, as low as 5 dollars, while other forex trading systems can require a large sum of money to be invested, as high as 500 dollars. Remember, each forex trading system is different from the others. Each has its own conditions regarding the duration period of your investments.

If you are wondering how long your money will remain invested, then you must read in detail the company’s fine prints where you are investing your money. Some company may require a 48-hour investment while others may require a 30-day turn around time. Always read the information being provided. It will explain your current money status upon investing it and its future result.

Forex trading systems allows the trader to acquire companies, stocks, or other country’s investments. It does not matter where you are located since forex trading systems are also placed in any parts of the world, as well as the company where you are investing your money. The traders can invest their money in companies located in China, Japan, United States, Russia, Germany, Africa, and other countries which are recipients of the investments on forex trading systems. It does not necessarily mean that you have to be living in the country where you are planning to invest. This is the secret of the forex trading system. Your personal wealth and personal preferences can be enhanced while investing.

This is also the primary reason why forex trading systems are well known. It can really make extra money by investing the cash since forex trading is about putting the money on another currency either for a short or long term period in order to earn bigger amount of money. Most forex trading systems are typically based on how stock exchange works. You will find out that forex trading systems can allow currency rate investments, currency change from one country to another, and investment from a foreign company. Therefore, forex trading systems are built upon global investors, global companies, and global currencies.

Remember, there is no difference between online and offline forex trading systems in what to the projected results concerns. However, online forex trading systems can quickly access your money. The traders can move, invest, remove, and trade their money faster compared to offline forex trading systems.

Somehow, it could bring wealth to the investors who are willing to invest and trust the brokers when making extra decisions. But the question is who you are going to rely on. It is advisable and helpful in any kind of trading systems or company investments to trust the person whom you are operating with. It is a wrong company if you cannot reach the representatives on forex trading systems either by fax, email, phone, or even in person. A company which utilizes forex trading systems and offers opportunities to the traders to worldwide investments is good. However, they should communicate with the traders any time during business days.

What is more, it is advisable to look for a company that uses forex trading system that puts your invested money first and foremost, how you are going to invest it, and listen to the things you wanted to do. If a forex trading company is just calling you at all times and giving you little space for decision making, then avoid doing business with them. Remember, this company should take in mind that being the end user and consumer of their forex trading systems, they should listen to you and learn about your investment plans before making the investment