Forex Strategy: How Do You Trade The Non-Farm Payroll Report?
In the development of your forex strategy do you wonder how you can trade the non-farm payroll report?
Seeing this is one of the most, if not the most, volatile announcement during the month (first Friday in every month) newer traders watch the huge movements and wonder how to make money from all that volatility.
Here’s an answer you may not fully appreciate until some explanation is offered. “How do I trade the non-farm payroll report?” The answer is: “By maintaining a neutral position!”
To put it another way, YOU DON’T!
The market is far too volatile at this time to expect a high probability trade. There may be some gamblers out there who relish the thought of ‘placing a bet’ to go long or short. But serious traders know better.
Actually, the professional traders I know all say the same thing: “Stand aside and wait for the market to calm down.”
This may take between 30 to 45 minutes in some cases and even then the direction of the market may be uncertain.
Some suggest you can trade volatile market movers such as the non-farm payroll report by waiting for the first leg of the move, up or down, then wait for price to pull back 10 or 15 pips, then enter a trade to catch the second leg of the move which often follows.
That’s one possibility but still very high risk. Personally I prefer to base my forex strategy on sound market assessment and carefully researched trades.
However, while many professional traders sit out the non-farm payroll report, that doesn’t mean they don’t trade afterwards. After the market has made a violent move in one direction you sometimes see price stalling and then give a clear signal that it’s momentum is exhausted.
This may be in the form of a candle pattern such as a hammer with a very large shadow which also happens to be on a key support or resistance level.
Now you can enter a trade with a small level of risk as you place your stop just above the high or low of the candle signal.
This advice applies to all fundamental announcements which are considered ‘market movers’. By developing a cautious forex strategy based on sound trading principles, you will enjoy this business and get the satisfaction of seeing your account equity steadily growing.
Article Source: http://EzineArticles.com
Currency Trading - How Much Do You Need to Spend to Learn How to Trade Forex?
In a short space of time forex trading has become one of the most talked about online business opportunities. Anyone who wants to work at home and is looking for ideas has probably encountered one of the many providers of tuition or forex education. Without doubt, the rewards can be high. So high in fact that the education providers can charge a premium price for their services. It is easy to find a forex course or forex ebook selling for thousands. Yes, selling, not just for sale.
With sound forex trading strategies and good discipline you can make a lot of money. Therefore, a tutor who can show you how to trade effectively can probably charge a lot for their course, seminar or book.
So, if you are considering the various options of learning how to trade forex, do you need to spend so much money?
First, we'll look at these options available to people who want to learn to trade the forex markets. There are basically four, listed on order of cost.
1. Work with a forex trading mentor, who is successfully trading.
2. Enroll or buy a course on line or by mail order.
3. Go to your library or book shop and get a few well-chosen books on forex trading.
4. Read all you can of the free information you can find online.
The Forex Mentor. This is likely to be the most expensive option and is probably only considered by people who have quite a large amount of cash to start with. If you find a good mentor then your tuition fees will be returned many times over. Obviously, if you choose badly then your money go be going down the drain, not just on your training fees but also because you'll probably lose all your money trading too.
Forex Course, Seminar, or Ebook.
How successful you'll be after buying a course or paying to attend a seminar will again depend on the quality of what is on offer. If it is expensive, and it could be, then make sure that it covers the vital subject of trader psychology. This is an area where any trader must do all they can to gain experience and insight. It is no good having fool proof system if your mindset is such that your gains are given back or your winning trades are converted into losers through poor discipline.
There is no guarantee that paying a high price, possibly more than $5,000, is going to make you a wealthy trader.
Forex Books.
There is a huge quantity of them available, some well-recognised classics such as Market Wizards, and Reminiscences of a Stock Operator, are essential reading for a forex trader or any financial trader for that matter. There are many others though, some focusing more on the psychology of trading others on technical trading and more still on understanding how the fundamentals affect the markets. Buying, borrowing and then reading books is a very cost effective way of learning and this certainly applies to forex trading.
Online Forex Information
If you want to learn how to trade forex, you have the biggest resource at your fingertips. From trader psychology to understanding financial charts, all the information you will ever need is available on line. And, most of it is free and easy to access. It is all out there, it just takes a bit of finding. Trading forums, such as trade2win are fantastic resources because many contributors share their experiences of various systems and even publicly evaluate courses and books. It is, however, sometimes worth spending a small amount of money to get some nicely packaged education. A highly recommended ebook is called Bird Watching in Lion Country and similarly a good manual is called The Affluent Desktop Currency Trader. Neither of these two will break the bank and they both offer a very good foundation in an exciting and hopefully rewarding trading enterprise.
So, to return to our original question "Currency Trading - How Much do you Need to Spend to Learn How to Trade Forex?".
The answer is absolutely nothing. Although, for a few dollars, the titles mentioned above are indeed very worthwhile. What about the expensive courses? Forget them and add the money you save to your trading account because experience is the best forex trading education you can buy. Be careful though, it's very dangerous out there.
Graham Chapman
www.neeshenterprises.comNeesh Enterprises Trading ResourceAbout The AuthorGraham Chapman has worked in publishing for nearly 20 years and has been self employed for more than 25. He is a trained life coach and is qualified in sports psychology. He now runs Neesh Enterprises assisting people who work from home or small office particularly in publishing.
Your FOREX Trading Philosophy
By: Ron King
"Easy money" is the allure that captivates many beginning FOREX traders. FOREX websites offer "risk-free" trading, "high returns", "low investment." These claims have a grain of truth in them, but the reality of FOREX is a bit more complex.
Mistakes Of The Beginning Trader
There are 2 common mistakes that many beginner traders make: trading without a strategy and letting emotions rule their decisions. After opening a FOREX account it may be tempting to dive right in and start trading. Watching the movements of EUR/USD for example, you may feel that you are letting an opportunity pass you by if you don't enter the market immediately. You buy and watch the market move against you. You panic and sell, only to see the market recover.
This kind of undisciplined approach to FOREX is guaranteed to lose money. FOREX traders must have a rational trading strategy and not make trading decisions in the heat of the moment.
Understanding Market Movements
To make rational trading decisions, the FOREX trader must be well educated in market movements. He must be able to apply technical studies to charts and plot out entry and exit points. He must take advantage of the various types of orders to minimize his risk and maximize his profit.
The first step in becoming a successful FOREX trader is to understand the market and the forces behind it. Who trades FOREX and why? This will allow you to identify successful trading strategies and use them.
Accountability
There are 5 major groups of investors who participate in FOREX: governments, banks, corporations, investment funds, and traders. Each group has its own objectives, but 1 thing all groups except traders have in common is external control. Every organization has rules and guidelines for trading currencies and can be held accountable for their trading decisions. Individual traders, on the other hand, are accountable only to themselves.
Large organizations and educated traders approach the FOREX with strategies, and if you hope to succeed as a FOREX trader you must follow suit.
Money Management
Money management is an integral part of any trading strategy. Besides knowing which currencies to trade and how to recognize entry and exit signals, the successful trader has to manage his resources and integrate money management into his trading plan.
There are various strategies for money management. Many rely on the calculation of core equity -- your starting balance minus the money used in open positions.
Core Equity And Limited Risk
When entering a position try to limit your risk to 1% to 3% of each trade. This means that if you are trading a standard FOREX lot of $100,000 you should limit your risk to $1,000 to $3,000. You do this with a stop loss order 100 pips (1 pip = $10) above or below your entry position.
As your core equity rises or falls, adjust the dollar amount of your risk. With a starting balance of $10,000 and 1 open position, your core equity is $9000. If you wish to add a second open position, your core equity would fall to $8000 and you should limit your risk to $900. Risk in a third position should be limited to $800.
Greater Profit, Greater Risk
You should also raise your risk level as your core equity rises. After $5,000 profit, your core equity is now $15,000. You could raise your risk to $1,500 per transaction. Alternatively, you could risk more from the profit than from the original starting balance. Some traders may risk up to 5% against their realized profits ($5,000 on a $100,000 lot) for greater profit potential.
These are the kinds of strategic tactics that allow a beginner to get a foothold on profitable trading in FOREX.
Forex Trading: Investment Secret Of The Rich And Powerful
By: Ikey Benney
If you search on the internet you'll find millions of investment programs such as real estate, stock trading, bond trading, mutual funds, CDs, auction programs and various internet programs.
I have not done many internet income opportunities or programs or affiliate programs because I had been lucky to discover a very easy way to make money through forex trading, (Foreign currency trading) safely on the internet.
Perhaps you know about only stock trading or bond trading which are common, but not forex trading.
Forex trading is the most profitable and attractive internet income opportunity because you can do it from home or office and from any country in the world.
In forex trading, you don't need to do any marketing or selling or internet promotion to succeed.
In currency forex trading, you don't need to spend thousands of dollars to do any internet promotion.
In forex online trading, you don't need any stocks or warehousing.
In forex online trading , all that you've to do is open an account with one of the brokers with as little as $300 or $2000.
Then follow simple instructions to buy and sell the currencies.
When the price of the currency is low, you buy.
In a few seconds or minutes, the price will go up, and you sell it and make a profit.
By so doing , in a day, you can easily make $500-$1000 by just buying, selling and trading these foreign currencies for about 3 or 4 hrs!
And get this:
You don't even have to be stuck sitting behind your computer buying and selling these foreign currencies.
You can enter all your buy trades and specify the sell prices you desire and then log off.
Whenever the values of these foreign currencies rise and your selling prices reach, the currencies will be automatically sold for you and you make money!
You can do currency forex trading and at the same time keep your day job, because in forex online trading, there is no work to do.
In the future when you have made hundreds of thousands of dollars, you may then quit your job and just keep doing currency forex trading forever and go on permanent vacation!
To understand the beauty of forex online trading Picture this:
In the morning, you get up from sleep at 6 am.
You go to your bathroom and have your shower.
At 7am, you hurry and eat your breakfast.
At 7.20 am, you login into your day forex trading account on the internet and spend 10 minutes to buy about 3 or 4 different currencies, [for example British Pound, Euro, CHF (Swiss Currency) and Yen (Japanese currency).]
You can specify the price at which you wish to sell each currency.
Then you can log off.
By 9 am, you're at work in your office or business place.
You do your job as usual and by 5 pm, you're finished and heading home.
When you get back home around 6.30 pm, you login into your day forex trading account to see how much money you've made.
Holy Molly, there in your account it says you have made $750!
'Is this for real'', you wonder'
Yes, it is. (Your eyes are not deceiving you')
$750 in a day for just clicking your mouse twice and doing no work'
(Whereas at your job, you work 8 hrs, but make only probably $150..)
This is how easy it is to make money from day forex trading.
But before you use real money to open a live forex system trading account, you have to open a free trial (demo) account (forex simulation trading) and practice first, to understand how it works and to acquire the right skills.
This free demo (trial) forex system trading account (forex simulation trading) will help you to reduce a lot of risks that can lead to loss.
In forex system trading, you can choose how much money to invest, how much money to make and when to make it.
You can make money daily, 365 days all year from forex trading.
Your computer can be transformed into an 'ATM' machine that cranks out cash for you daily (without large investment or hassles) from forex trading.
In day forex trading, you can choose what type of risk you can manage, when to invest and when not to invest.
In Currency forex trading, you're the boss. You may do as you please.
When day forex trading is compared to other investment programs such as stock trading, bond trading, mutual funds, real estate and regular business, it is evident that forex online trading is the fastest and greatest way to make money in the world.
Forex system trading is a 2.5 trillion dollars daily business and it is larger than all the stock trading in the world combined.
These are some of the reasons why I believe that forex system trading is the best internet income opportunity.
Perhaps from reading this article you'll now come to know why currency forex trading is the secret behind the greatest wealth on earth and why it has been kept hidden from the average people of the world and therefore little known to the masses.
May these forex trading insights open your eyes to the possibility of infinite wealth and success that can be yours from day forex trading.
Trading In The Forex Requires Some Caution
By: Sara Jenkins
Whether it is in the millions or thousands, trading in the Forex is a bit risky. There are a lot of players involved and if you don't arm yourself properly with knowledge about the Forex you may just get swamped.
The Forex is the largest most vibrant market in the whole wide world. The financial world has never had a market that involves so much transaction. Over a trillion dollars worth of different currencies exchange hands everyday. Some losing in the trade, while some hit the jackpot and make tons of money. The Forex is characterized by its unpredictability and the liquidity because it deals with foreign currencies and each one's value influenced by their own country. That's why anyone who is greatly considering joining the Forex trade should think twice, thrice and maybe even ten times before doing so. This is not an arena for the weak and nervous.
The Forex is a very complex financial arena and only those with enough knowledge, experience and financial capability can join the foray. Managing the risk factors is a priority task for those professionals who do this everyday. They direct and manage accounts from their investors, full confidence is placed on them and their client's success is also their success. Some professional Forex brokers have placed high-value on their credibility. The more clients they have the more they earn as well. They make a profit by eating a slice of their client's profit. If they have made a name for themselves in the Forex trade, they don't need to go look for clients; the clients will look for them and invest.
There are those however who wants to manage their own portfolios. A word of caution though, educate yourself first about the trade. Learn the ropes and tricks of the game before throwing your hat in the ring. Try to gain access to many self learn and self study websites that can impart their knowledge with you. Try out the website of the federal Commodities Futures Trading Commission (CFTC), there they offer consumer reports as well as articles about applicable laws in Forex trading. Many Forex management firms maintain a website that offers free online tutorials and brochures. You may need all the educational information about the Forex that you can get your hands on.
They may not outright say it, but the best and the finest and most skilled Forex traders have learned all the secrets of the game. From trading signals technical indicators, and theories that could explain about the market behavior. When you have mastered these skills, you can have a more accurate prediction of the direction of the market resulting to lower risks and higher profits. Even when dealing with money managers they have to be knowledgeable about the trade so they can be on top of their investments. Have a constant conversation with your broker and be updated about your account.
For the self-traders, some of them are very admirable to have the courage to act as their own money managers. As with any business, success will come only after hard work and diligent research. With Forex trading you should always be on your toes for developments. A wise Forex trader knows that that learning and educating about Forex trading never ceases.
Introduction To Fundamental Analysis: Forex
By: John Sanderson
FOREX traders almost always rely on analysis to make plan their trading strategies. There are two basic types of FOREX analysis — technical and fundamental. This article will look at fundamental analysis and how it used in FOREX trading.
Fundamental analysis refers to political and economic conditions that may affect currency prices. FOREX traders using fundamental analysis rely on news reports to gather information about unemployment rates, economic policies, inflation, and growth rates.
Fundamental analysis is often used to get an overview of currency movements and to provide a broad picture of economic conditions affecting a specific currency. Most traders rely on technical analysis for plotting entry and exit points into the market and supplement their findings with fundamental analysis.
Currency prices on the FOREX are affected by the forces of supply and demand, which in turn are affected by economic conditions. The two most important economic factors affecting supply and demand are interest rates and the strength of the economy. The strength of the economy is affected by the Gross Domestic Product (GDP), foreign investment and trade balance.
Indicators
Various indicators are released by government and academic sources. They are reliable measures of economic health and are followed by all sectors of the investment market. Indicators are usually released on a monthly basis but some are released weekly.
Two of the most important fundamental indicators are interest rates and international trade. Other indicators include the Consumer Price Index (CPI), Durable Goods Orders, Producer Price Index (PPI), Purchasing Manager's Index (PMI), and retail sales.
Interest Rates - can have either a strengthening or weakening effect on a particular currency. On the one hand, high interest rates attract foreign investment which will strengthen the local currency. On the other hand, stock market investors often react to interest rate increases by selling off their holdings in the belief that higher borrowing costs will adversely affect many companies. Stock investors may sell off their holdings causing a downturn in the stock market and the national economy.
Determining which of these two effects will predominate depends on many complex factors, but there is usually a consensus amongst economic observers of how particular interest rate changes will affect the economy and the price of a currency.
International Trade ' Trade balance which shows a deficit (more imports than exports) is usually an unfavourable indicator. Deficit trade balances means that money is flowing out of the country to purchase foreign-made goods and this may have a devaluing effect on the currency. Usually, however, market expectations dictate whether a deficit trade balance is unfavourable or not. If a county habitually operates with a deficit trade balance this has already been factored into the price of its currency. Trade deficits will only affect currency prices when they are more than market expectations.
Other indicators include the CPI ' a measurement of the cost of living, and the PPI ' a measurement of the cost of producing goods. The GDP measures the value of all goods and services within a country, while the M2 Money Supply measures the total amount of all currency.
There are 28 major indicators used in the United States. Indicators have strong effects on financial markets so FOREX traders should be aware of them when preparing strategies. Up-to-date information is available on many websites and many FOREX brokers supply this information as part of their trading service.
Forex Trading - Understanding Commissions, Spreads and Trading Costs
By: Rich Cochrane
The forex market is quickly becoming one of the most popular markets for trading.
Not only are the experienced traders looking to this market to maximize their trading returns, but many new, individual investors are now able to trade the Forex market - just as they do stocks and futures.
More and more individuals are seeing Forex not only as a new way to diversify their portfolio, but are also finding that it is becoming the most profitable component of their investments.
And that's because of the many advantages Forex offers over other markets like stocks or commodities. Here's what you will typically see advertized about Forex:
- Unparallelled liquidity. It is the largest financial market in the world by far. Almost $2 trillion being traded daily!
- Excellent leverage potential. Individual investors have access to leverage of 100:1 and even 200:1
- No Commissions (more on this later on)
- Low trading costs.
And yes, the Forex market really does offer all these advantages.
But the last two points above talk about costs, and that's what we'd like to focus on in this article.
Like any trading, there are costs involved, and, while these may be much lower than they used to be, it is important to understand what those are.
Let's start by looking at stock trading, something that most of us investors are pretty familiar with.
When trading stocks, most investors will have a trading account with a broker somewhere and will have investment funds deposited in that account.
The broker will then execute the trades on behalf of the account holder, and of course, in return for providing that service, the broker will want to be compensated.
With stocks, typically, the broker will earn a commission for executing the trade. They will charge either a fixed dollar amount per trade, or a dollar amount per share, or (most commonly) a scaled commission based on how big your trade is.
And, they will charge it on both sides of the transaction. That is to say, when you buy the stock you get charged commission, AND then when you sell that same stock you get charged another commission.
With Forex trading, the brokers constantly advertise "no commission". And, of course that's true - except for a few brokers, who do charge a commission similar to stocks.
But also, of course, the brokers aren't performing their trading services for free. They too make money.
The way they do that is by charging the investor a "spread". Simply put, the spread is the difference between the bid price and the ask price for the currency being traded.
The broker will add this spread onto the price of the trade and keep it as their fee for trading.
So, while it isn't a commission per se, it behaves in practically the same way. It is just a little more hidden.
The good news though is that typically this spread is only charged on one side of the transaction. In other words, you don't pay the spread when you buy AND then again when you sell. It is usually only charged on the "buy" side of the trades.
So the spread really is your primary cost of trading the Forex and you should pay attention to the details of what the different brokers offer.
The spreads offered can vary pretty dramatically from broker to broker. And while it may not seem like much of a difference to be trading with a 5 pip spread vs a 4 pip spread, it actually can add up very quickly when you multiply it out by how many trades you make and how much money you're trading. Think about it, 4 pips vs 5 pips is a difference of 25% on your trading costs.
The other thing to recognize is that spreads can vary based on what currencies you're trading and what type of account you open.
Most brokers will give you different spreads for different currencies. The most popular currency pairs like the EURUSD or GBPUSD will typically have the lowest spreads, while currencies that have less demand will likely be traded with higher spreads.
Be sure to think about what currencies you are most likely to be trading and find out what your spreads will be for those currencies.
Also, some brokers will offer different spreads for different types of accounts. A mini account, for example may be subject to higher spreads than a full contract account.
And finally, because the spreads really are the difference between bid prices and ask prices as determined by the free market, it is important to recognize that they are not "guaranteed". Most brokers will tell you that there may be times during periods of low demand, or very active trading when the spreads widen and you will be charged that wider spread.
These do tend to be rarer situations because the Forex market really is so large and demand and supply are generally quite predictable, but they do occur, especially with some of the lesser traded currencies. So it's important to be aware of that.
In summary then, when trading Forex, understand that the "spread" is truly your most important consideration for trading costs.
Spreads can vary significantly between brokers, account types and currencies traded. And small differences in the spread can really add up to thousands of dollars in trading costs over even just a few months.
So be sure to understand what currencies you are going to be trading, how frequently, and in what type of account and use those factors to help decide which broker can offer you the best trading costs.
Explosive Profits: 7 Reasons to Trade Forex
by:
Sorna Devadas There are many money-making opportunities out there and we’ve been involved with quite a few, namely property marketing, web development, residential construction security, multi-level marketing businesses etc.
We’ve come to a few conclusions with the help of some well-known properity coaches.
Often people with the income they desire don’t have the time to enjoy it. Those that have time don’t often have money. You don’t have to sacrifice your life-style to earn an above-average income. If you focus on the Forex for a few months you can make that dream a reality and create time and money to do what you REALLY want.
To earn a living money is given in exchange for a product or service rendered. It needs to be sold continuously otherwise your income stops abruptly unless it’s a repeat type of product or service.
Money is a medium of exchange. There’s no magical formula to possess it, you need to exchange something of value for it.
What if, you could have access to thousands of customers who are ready, willing and able to buy from you whenever you wanted? Wouldn’t it be great to avoid any hassles like money collection problems (just had a delayed payment from my web business), keeping difficult customers happy (we all know what that’s like), competition stealing your business without providing the same value etc.
All that is possible with Forex. You can also trade from anywhere. Take your laptop with you, find an internet connection and away you go.
Another advantage is that you don’t need experience to get started. Get a traditionally job involves accumulating specialized experience, having a well-polished resume and having the right contacts. With the right training course, you can get started straight away.
Here’s 7 more reasons to trade Forex:
1. It never closes. It’s open around the clock, worldwide. Trading positions open at Monday 7am, New Zealand time and close 5pm New York time on Friday. During this time, you can enter or exit the market whenever you like. It’s a continuous electronic currency exchange. This is great because you can trade whenever you have spare time.
2. Leverage. Standard $100 000 currency lots can be traded with as little as $1000. This is mainly because of the ease with which you can buy and sell, some brokers will leverage up to 200 times, so with $100 you can control a 200 000 unit currency position. It’s the best use of trading capital around, even banks lending on property investments don’t come close.
3. Accurately predict the outcomes. Currency prices generally repeat themselves in predictable cycles so you can see what the trends are. ‘Technical Analysis’ helps to see these trends and profit from them.
4. Low Transaction Cost. In other words, you mistakes won’t cost you a fortune. Good brokers won’ charge commissions to trade or maintain an account even if you have a mini account and trade small volumes.
5. Unlimited Earning Potential. Forex has a daily trading volume of over 1.5 trillion, the largest financial market in the world. It dwarfs the equities market (50 billion daily) and the futures market (30 billion).
6. You can make money in any market conditions. Each market is one currency against another, so when you buy in one, you’re selling in another so there’s no biase towards either currency moving up or down. This means it’s up to you to choose which currency to buy or sell with. Yu can make money going up or down.
7. Market transparency. This is an advantage in any business or trading environment. It means you can manage risk and execute orders within seconds. It’s highly efficient and allows you to avoid unexpected ‘surprises’.
I hope you’re now convinced that Forex is the best investment and income opportunity around.
Forex Currency Trading, A Great Work At Home Opportunity.
Everyday more and more people looking for a work at home opportunity and the possibility of braking free from the corporate world without losing their current lifestyle and even improving it, realize that the world of forex currency trading could be the answer to what they have been looking for.
Some of the great reasons why FOREX trading is such a great way of entering the capital markets are; it's easy accessibility thanks to the widespread use of the internet, the fact that currency trading is all commission-free and also the low transaction costs involved. All the best forex brokers will facilitate you a trading account with these characteristics and even Mini Forex traders (i.e., traders starting with accounts having a capital as low as $250), who are just starting in this field, can buy and sell currencies online always commission-free.
When trading the forex markets you don't have to worry everyday about fees you may have to pay your broker; there are also none of the usual fees to which futures and equity traders are used to pay every day the enter a trade; no exchange or clearing fees, no NFA or SEC fees.
You may be asking how forex brokers make money if they don't charge you fees for placing trades. They make money thanks to one characteristic of currency markets, this is, they are over-the-counter markets and trading them involves a bid/ask spread and that's how the brokers make money. Thankfully the currency markets are capable of offering you a round-the-clock liquidity and this way you will receive tight, competitive spreads both in intra-day and night trades, without worrying about having big spreads in prices.
Once you have decided to enter and learn how to trade forex, always remember that practice and more practice makes the master and one of the best ways to get a feel for the market is to paper trade. No one wants to experiment with their own hard earned money; this is why many brokers came up with an innovative idea that would take all the risk from trying out forex trading. This way of trading is called simulation trading or paper trading as mentioned above, and the premise is simple. The program is an exact copy of the broker or trading systems real-time trading program. The main difference is that they allow you to “play” the market just as you would if you were actually investing, but obviously without the persistent worry of losing your money. You can do a simulation trade with a set amount of money, usually around $50,000 dollars. You can practice setting bid and ask prices, and using their various analysis tools provided by the broker software, which is the same you would have in a real account.
From all these facts you can see there are many advantages, and lots of money to be made, if you decide to enter the world of forex currency trading and learn the basics of the markets behavior.
Forex Trading Strategies
The world of trading and investment can be as frustrating as it can be rewarding! And FOREX (Foreign Exchange) is no exception - often described as risky, profitable and complicated.
Forex is the largest trading market in the world.
Forex is the worldwide market for buying and selling currencies. These markets were developed to cater for the supply and demand of different currencies by governments, companies and individuals - for international trade and assisting importers and exporters.
Therefore those who trade in this market include consumers, businesses, investors, speculators and the banking industry.
Different countries use different currencies - which vary in their values against each other. Forex trading invovles the buying and selling of two currencies - trading pairs - you are selling one and buying another eg you may use the US dollar to purchase British pounds - if the supply of the pound lessens - it will cost more dollars to buy pounds - the Forex trader hopes to sell their pounds at a higher price than the purchase price.
A speculator in Forex is someone who accepts the possibility of adverse exchange-rate movements in the hope of making a profit from favourable movements in currency.
As a speculator you should always start trading with a small amount and have a trading system - which tells you when to get in and out of the market. It is a favourite option for currency traders as you can trade the Forex market 24 hours per day and the transaction costs are minimal.
This market - because of its sheer size - is hard to be manipulated - which stocks can be - it is more likely to be influenced by global news or events. Hence, the opportunity for 'insider trading' is eliminated.
However - beware -Forex brokers estimate that 90% of traders lose their money; 5% break even and only 5% achieve profitable results!
