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Showing posts from October, 2016

Beginning Forex - How Are Lots Traded What The Heck Is A Pip

If you are new to Forex, no doubt you are confused by all of the strange and unfamiliar terminology. For example, what is a pip? Also, you are probably already aware that Forex trading can be risky. How can you limit your loss and best protect your funds? This article briefly covers how currency lots are traded to help you better understand how to plan your trading strategy and manage your funds.
In Foreign Currency Exchange (FOREX), earnings are expressed in "pips". Pip is short for Price Interest Point, also called points. Whereas the smallest denomination in USD is the penny ($.01), in Currency Exchange, funds can be traded in an even smaller denomination, $0.0001. This means that very small movements in currency prices can create large profits.
So, a PIP is the smallest unit a currency can be traded in. The actual value of a pip is not a set price. If you are trading with a standard account, a pip is worth $10. If you are trading a mini account, a pip is only worth $1.
The …

Forex Trading The Most Common Flaws

Flaws due to multi indicators and due to the principle of confluence: Many traders are very much attracted to the sophistication offered by the multi indicators and use them in their forex trading systems. Many of the confluence system indicators show the price movement and in no way adds any value to the trade. Due to this, the traders either end up over bought or over sold technical indicators like the stochastic, momentum indicators, candle stick chart pattern recognition, Bollinger band breaks out even neural networks which are supposed to be artificial intelligent systems. The technical indicators just show signals which are similar to buy or sell or hold, making the signal generated to be correct. Theoretically it sounds good but in reality to arrive at a conclusion might be difficult. As a result the traders are confused in making a right decision. They either enter too late or too early or remain still without being able to make a decision to enter the market. The major flaw i…

Avoiding Forex Market Risks

The Foreign Exchange or Forex market as it is more commonly known is purely to allow people to trade one currency for another. In fact this is by far the largest trading market in the world for the value of the cash that passes from buyers and sellers of currencies. Many of the trades which take place on the Forex market occur between large banks, central banks, multinational corporations, Governments, currency speculators as well as all other types of financial institutions and markets.
Currently, the trades occurring in Forex markets across the globe is well more than $1.9 trillion each day on average. However, the individual or retail traders make up only a small part of this market, and they often trade through a third party such as a Forex broker or a bank. This means the market mostly includes sophisticated traders who know what they are doing.
In fact, when some individual investors begin trading in the Forex market it can all seem a bit daunting. The learning curve can be steep …

Forex Trading Vs. Options Discover The Difference

Forex Trading, also known as FX Trading or by many as the Foreign Currency Exchange, is a financial market where a person can trade national currencies in order to try and make a profit. Perhaps one feels the U. S. Dollar will get stronger compared to the British Pound or the Euro. A strategy can be developed to affect this trade and if the research is correct, a good profit can be made.
Options Trading allows you to buy or sell options on large amounts of stock, futures etc. that you feel will either go up or down in price over a certain period of time. As with Forex Trading, you can leverage your buying power to control more stock or futures for instance, than you could have normally. However, there are differences between Forex and Options Trading. Many of the differences are described below.
24 Hour Trading:
An advantage you have with the Forex Currency Trading System (Forex) as compared to Options trading is your ability to trade 24 hours a day, five days a week if you wish. The For…

Comparing The Forex With Investing In Insurance

Investing in Forex is more risky but the gains that can be achieved are a lot larger than insurance, although insurance is a very good long term investment.
While there are innumerable kinds of life insurance available, they can be simplified into two general types: those that insure against death only and those that not only insure against death but make a provision for savings in addition to insuring. The first type is called term insurance.
It pays off only in the event of death. While it is worth nothing to the individual himself, since he never gets his hands on any of the money that went to pay the premiums, it does generally provide the maximum death benefits per dollar of premiums at the younger ages. Its sole purpose is to insure against death. As its name implies, it is written for a term—1, 5, 10, 20, 25 or 30 years—and if the term expires before the insured dies, that is that. There are no more premiums due and he gets nothing from the insurance company except the right to r…

Online Forex Trading - The Basics

Forex trading has become extremely popular the world over and has people from all different countries and backgrounds trading like only the professional traders could do just a short time ago. Until recently Forex trading was performed mostly by major banks and large institutional traders. The technological advancements that have occurred of late have transformed Forex into the playground of average traders like you and me.
It's easy to find an online FX trading system, platform or software that can make it easy and fun to trade the market. Simply browse the web and you will be inundated with many exciting offers and promotions. There are many firms that sell or even give away free training software, charts or other useful tools for your future in Forex trading.
Foreign currency trading is done in pairs or combinations. For example, trading the Dollar versus Yen, the Euro vs. the Dollar or the British Pound against the dollar. The most popular currencies that are used for trading an…

Forex Legend George Soros And The British Pound

Anyone who trades forex would have heard of George Soros, the man who traded against the Bank of England and won. This story has been retold many times and is now stuff of legend. But now in 2007 when GBPUSD is over the 2.000 level from September 1992 once again, it is time to recall this legendary forex event. Remember September 19, Black Wednesday in 92, the day when the Bank of England withdrew and stopped pumping money to keep the sterling pound strong.
Events leading up to Black Wednesday as it was called: BoE joined the European ERM (Exchange Rate Mechanism), the predecessor to the EURO). This is when all the currencies locked at a fixed price range with 6% leeway. If the price goes below or above this range, the Bank of England must intervene and make sure the prices stay in this range. It's easier to understand the event if it's read in the chart on http://www. forexplane. com.
When it joined, the economies of the UK vs. the rest of countries in the MRE were not in sync.…

Forex 101 - Foreign Currency Exchange Trading

Nearly everyone enjoys making money. More often than not, the more money we make the better we feel and the more confidence we have. These are good things as long as making money doesn’t get too emotional. If investing is treated like a business and most of the emotion is left behind, many people can do well with their investments.
Forex Trading, also known as FX Trading is another way you can make money in a trading environment. Everyone has heard of the New York Stock Exchange (NYSE) or the Chicago Mercantile Exchange (CME), each featuring either stock trading or options and futures trading. Forex Trading involves the buying and selling of currencies instead of stocks, bonds, options or futures. It is also different in that there is no physical floor or exchange area like there is in New York or Chicago where the above mentioned exchanges are located. The Foreign Exchange Market (FOREX) can only be accessed by phone or by electronic network. The advantage of not having a central loca…

Forex Trading Software

If you are looking to get started trading the Forex, you will find that there are numerous software programs available (both web based and desktop based) for you to use in your trading. In fact, most brokers offer clients a software package for free or as part of their trading account. Usually the software that comes with your trading account is a very basic "bare bones" model. Sometimes, more features are available for a price. The software packages your broker provides can be an important consideration in choosing a broker. You may want to download and try some different packages using a demo account. This will give you a better idea of which software package you find most suitable to your unique style of trading.
Forex trading software comes in two basic flavors - desktop software, and web based software. Which one you choose to work with depends on your preference and other more technical factors. Obviously, the Forex market is very dynamic and you need to have the most r…

Great Tips For Successful Forex Trading

Knowing how to trade in Forex is simply just not enough to be successful. In this largest and the most liquid financial market in the world, you need to have more than the knowledge and skills to be successful. You need to know about the different things involved in Forex to earn huge amounts of money.
Simply knowing how to trade Forex and about the major currencies traded, like the US dollar, the Japanese Yen, and others are just the basics. Knowing when to trade and what to trade is equally essential to be successful in Forex.
Fore these you need to have a trading strategy. So, what exactly are the trading strategies involved in Forex? There are a number of money making strategies that you can use when trading in the Forex market.
If you use these strategies correctly, you will earn huge amounts of money in a very short time. Firstly, you have to realize that Forex trading is very different from stock trading. Therefore, strategies are also very different.
The first strategy that you ca…

Forex Market History - Be A Part Of It

The Foreign Currency Exchange (Forex) Market enables investors to make trades between major world currencies in order to make a profit. The Forex is the epitome of all traded markets since it is the least complicated and allows for trading 24 hours a day five days a week. It is hard to beat this combination when the goal is to develop a good system, stick to it and make a profit. The simplicity of the Forex Market as compared to the thousands of possible investments in other markets, combined with a person’s ability to trade nonstop almost every day of the week, makes the Forex an ever increasing and desirable trading partner.
Pharaohs to the Middle Ages:
Foreign Exchange Markets have been alive and well since the Middle Ages. And even long before that, various currencies changed hands between regions and countries since money first originated during the time of the Pharaohs. It appears the Babylonians were the first to use paper bills and receipts which facilitated the exchange of curr…

Yes You Can Start Trading Forex For Free

Yes, it’s true, you can trade the forex markets for free and using the same state-of-the-art software packages that professional Forex traders, around the world, are currently using to make real-time, live currency trades.
And you can also experience the same dynamic market action and go through the same process of making decisions based on breaking news, reacting to charting patterns, and tracking ones performance the same way professional Forex traders do.
And all this can be done even if you don't put any real money into your account, you won’t see any difference in how the market behaves and how you react to the market. In short, at some point, every new forex trader needs to start Demo-trading.
Once you start placing demo trades, you will learn a lot about how Forex transactions are placed. I can’t emphasize you enough, that this is a very important step for you in order to be able to learn how to become a trader. A demo account allows one to become familiar with trading procedu…

Forex Fundamental Analysis

Most FOREX traders rely on analysis to make plan their trading strategy. This article will discuss fundamental analysis. The other common form of analysis is technical analysis. After reading this article you should have a better understanding of fundamental analysis and how to use it as part of your FOREX strategy.
Political and economic changes are the basis of fundamental analysis. These can frequently affect currency prices. Traders that take advantage of fundamental analysis will gather their information from a variety of news sources. They are looking for information about unemployment forecasts, political ideologies, economic policies, inflation and growth rates.
Fundamental analysis will provide you with an overview of currency movements and a broad picture of the economic conditions. Most traders then will combine their fundamental analysis with technical analysis to plot actual entrance and exit points as well as confirming the information provided by their fundamental analysi…

Things To Consider Before You Invest In Forex

There are several things to consider before you invest in the stock market or Forex.
Your Personal Situation: Your age, the state of your health, the number of dependents you support, the kind of job you have, whether you are a man or a woman, what kind of goals you have set for yourself all these, and more, are factors which will bear on your decision whether or not to invest.
There is no rule, no prescription governing these factors, either singly or in combination. Again, the decision is yours. It is well to wonder, however, whether your personal situation contains any elements which might conflict with your freedom, need, or desire to invest.
There is, for instance, no age more appropriate than another for investment. But it is conceivable that a young man might find family obligations, such as a new house, absorbing all his resources, that a middle-aged man might prefer to invest surplus funds in his business, and that an elderly man might feel he is too far along for the amount he …

Forex Starting Your Own Trading

The presented article is intended for those who just turned their eyes toward FOREX. Beginning traders who are still learning the basics of the foreign exchange market may also find something of interest here. While experienced traders won’t gain anything worth their time reading this article.
Basically there are 4 steps which can be defined as “must do“ for those who wish to start trading FOREX. Though, their order is not particularly important, the more important part is their content, to which the great attention and responsibility must be paid.
First step is finding a right FOREX broker which will be your main tool in trading. You can have a great strategy, good technical analysis skills or an outstanding intuition but you will eventually fail if you choose a bad broker. A good FOREX broker is one that will not still your money, will be doing real trading with your positions, supports your preferred deposit/withdraw methods and has fast and helpful user support service. It is nice i…

Why A Dummy Account Is The Forex Traders Best Friend

To succeed as a Forex trader you will find the use of a dummy account invaluable.
Just like any other investments, you should never start investing in currencies without knowing what you are doing. With a good knowledge of Forex trading, you will be confident that you are on the right road to making some good profits.
As you probably already know, Forex stands for foreign exchange or the simultaneous exchange of a pair of foreign currency to another pair of foreign currency.
Initially you will need to gain knowledge of the Forex market background.
It is important to you find out about the market changes that affect currencies so that you can make the best decisions.
Next you will need to study risk control. It is important that you understand the risks involved in Forex trading. You need not to over invest or be overconfident at the thrill of opportunity of making huge money. Also on this part, you will learn how you will cut potential losses or getting out of a deal before your losses rea…

Forex And Daytrading

Online trading is great way for serious investors to make money, but inexperienced traders often wind up with big losses. A good set of instructions can minimize the risks and save months of expensive trial-and-error learning.
Day Trading
Day Trading had its heyday during the bull market of the 1990's. All the amateurs have since dropped out, but day trading is still being practiced by professionals. There are fewer opportunities in the current market, but skilled investors can still find them if they know what to look for.
FOREX Trading
The Foreign Exchange Market (FOREX), the world's largest financial exchange market, originated in 1973. It has a daily turnover of currency worth more than $1.2 trillion dollars.
Unlike many other securities, FOREX does not trade on a fixed exchange rate; instead, currencies are traded primarily between central banks, commercial banks, various non-banking international corporations, hedge funds, personal investors and not to forget, speculators. Pr…