The Advantages of Online Forex Trading

The Advantages of Online Forex Trading

Every year the attraction on online trading is fast increasing specifically on trading shares and forex trading. The coming out of a new profession, that is, dealer of currency, was caused by the remarkable development of the Internet. Forex trading can be done now not only in the office but also at home. Hence, the online forex trading was well accepted.The level of qualification for forex brokers was raised due the incredible advancement of online forex trading, the security program and telecommunications. Somehow, the online forex trading made the forex brokers to develop more their abilities for their own sake. Surely, the danger will be lower while on the operation. Thus, if the level of trading qualification is higher, then the trade amount will also be higher.The typical methods of the forex trading were completely changed because of the presence of dealing systems, which is automated in the eighties, together with the co-coordinating systems in the nineties. The systems of dealing are online computer systems wherein the banks are integrated in a united net, whereas, the co-coordinating systems are electronic brokers.The forex traders will have an increased number of present transactions because the dealing systems are very dependable and very efficient. Furthermore, they are safer as you will see the executors of the dealings. The online forex trading is continually expanding precisely of the dependability, safety, and swiftness of the dealing systemsThe online forex trading has been widely accepted considering the basic role of the computers. The dealing systems and the co-coordinating system are interconnected to all the traders of the world, thus, forming an electronic brokers market. The account report, filling vouchers, the work of the secretary, and the methods of lowering the risk are well in place.In order to use your investment capital to the maximum, you should be wise enough to avail the online forex trading. What are the advantages of the forex markets online? They are different compared to the other traders. We have the following advantages.1. The biggest market is the forex market. Forex traders are given approximately limitless liquidity and flexibility.2. The forex trading does not sleep. There is no need to wait for the opening of the market. They are open all night. This is the motive why the online forex trading is very much popular that suits practically to your day or night.3. You will have the same opportunity in having a profit whatever way the currency goes to. Aside from that, there are only fourteen pairs of currencies to trade, as compared to the several thousands of stocks and options.4. The online forex trading gives a great leverage. Your resources for investment will be treated to the fullest on online forex trading. In view of this, traders avail the online forex trading.5. The prices of the online forex trading are unsurprising. Prices of currency, though unstable have the tendency to produce and go along with the trends.6. There are no commissions for online forex trading. No exchange fees or any unknown fees whatsoever. The forex market is so transparent. No computation of commissions or any fees in executing a deal.7. The online forex trading is amazingly fast. The orders can be done within 1-2 seconds. You can choose whichever you think is faster and something that will be profitable for you.

Pros and Cons of Trading With Metatrader

Pros and Cons of Trading With Metatrader
In every item or device we use, they all have their own weaknesses and strengths. In using metatrader4 for trading, we find it useful though it also its limitations.

In using metatrader4 first, you will be able to check if there is still money available on your account. If there is not enough money on the account, the operation of opening a position will not be successful. It is for this reason that one need to have sufficient funds for investments.

With metatrader4, you can access history data by using the predefined arrays of Time, Open, Low, High, Close, and Volume. Due to historical reasons, index in these arrays increases from the end to the beginning. Another way of accessing history data is by using other time intervals and even using other currency pairs.


Another advantage in using the metatrader4 is that you can get the information about errors in the program. The “GetLastError” function is very useful. For example, an operation with an order always returns the ticket number. You can also define the beginning of a new bar but this method can fail while loading the history. That is, the number of bars is changed while the “previous” one has not been finished yet. In this case, you can make checking more complicated by introducing a check for the difference between the values equal to one.

The next method is based on the fact this method can fail to work when there are a lot of incoming price ticks. The matter is that incoming price tricks are processed in a separate thread. And if this thread is busy when the next tick comes, this new incoming tick is not processed to avoid overloading the processor. In this case you can also make checking more complicated by saving the previous “Volume” value.

After all pros and cons review, it is for the user to follow directions on how to use it and care for it so that the trading will be more successful and the goal will be achieved.

Thinking of trying your Luck in the Forex Market

Thinking of trying your Luck in the Forex Market
The Foreign Exchange market, also referred to as the "FOREX" or "Forex" or "Retail forex" or “FX” or "Spot FX" or just "Spot" is the largest financial market in the world, with a volume of over $2 trillion a day. Compare that to the $25 billion a day volume that the New York Stock Exchange trades. Making money in such a market should be easy, right? Not necessarily. But it can be done. And with the advent of the internet, its now more easier than ever for the average person to get involved in speculative forex trading. In the past, forex trades had to be carried out through a broker and the initial requirement was that you could trade only if you had about ten to fifty million dollars to start with! Today, carrying out a trade can be done by anyone from the comfort of your home or in front of any pc with internet access using an online trading account.
The fact that there is so much risk and yet so much potential involved with forex trading is what draws most people to it, sort of like gambling. Its all about the adrenaline rush. And making money, of course.



There are many benefits and advantages to trading forex such as no commissions, no middlemen, no fixed lot size, low transaction costs, a 24 hour market, no one can corner the market, leverage, high liquidity, free “demo” accounts, news, charts, and analysis and “mini” and “micro” Trading
However, the speed and complexity of market movements can be a deterrent to aspiring investors. Unless you have a trading system you follow and a good grasp of the forex market, you can find yourself struggling.
So many new entrants into the forex market always tend to search for the ‘ultimate’ forex trading system. And there are so many such trading systems being flouted on the internet as the next best thing.
A good trading system will provide you ‘signals’ or ‘alerts’ about market movements as they arise based on popular Forex indicators like the Relative Strength Index and MACD lines. However, what you need is a complete trading system, one that gives you a trading strategy or ‘auto trade’ option, not just a signal service.
With time, it is important that you take the time to develop your own trading strategies. Take the time to sit down and thrash out your entry and exit tactics.
Before you start trading, it is imperative that you ask yourself these questions:
1. How much money are you willing to risk per trade?
2. How much margin are you comfortable with trading on?
3. Do you have a recovery strategy in the event your trades take you below margins.
4. How do you intend to manage the overall growth of your portfolio?
5. Will you take all your profits out or reinvest them to achieve your set targets?

Forex Signals Services - Path to Profits or Trail to Tears

Retail forex trading is the most risky form of investing, yet every day hundreds, even thousands of people turn to forex as a way to make a quick buck. The idea of taking the time to learn the market and trade a demo account for months before risking real money can sound boring and nonproductive, so many seek out a way to start making money now, fast and easy. They seek out trading signals providers, there are hundreds out there with slick websites and claims of hundreds or thousands of pips per month, for a monthly subscription. The question is: Why do these signals providers really exist if they are truly making the amount of pips and profits they claim to be earning?


Trading for others helps you be a better trader

I personally know someone who provides a forex trade signal. I have been trading with her for 2 years now on a daily basis, but she has been trading this market for more than 5 years and she also trades accounts for others. When I asked why she does the trade signals she exclaimed, “It makes me a better trader, making my trades public. I think twice or even three times before entering a trade, I double and triple check myself.” I thought that was a pretty good answer. She also told me that her percentage of losing trades to winners has diminished since starting the service. Not only does she make a few extra dollars by her subscription service, but she also uses it as a tool to keep her own trading in check. Pretty smart.

The best place to find a scam is on the internet

Yes, there are signal providers that are scams on the internet. Some start business knowing that they are a scam and just want to make as much money as possible from unsuspecting new traders before getting caught. Others actually start out thinking they will be great but soon end up making mistakes and making too many mistakes will soon mark you as a scam, whether you are one or not. In my opinion and years of seeing signals providers come and go, most services start with good intentions, but like with most trading systems they work for awhile and then lose their luster.

It is important to do some due diligence before sending money to any signals provider, for example:
1. Get a recommendation from another trader.
2. Check their website thoroughly, find out when they started giving signals and their trading methodology and performance record, and ask for a reference
3. A good provider will have a reduced rate trial offer
4. Money management is key, whether using a signal service or your own trading. Start with a demo first, then gradually add a mini lot, only adding to lot size if the trade signals prove to be consistently good.

At dailyforex.com we strive to provide helpful information to beginning and experienced traders. Therefore, we will be tracking various signals providers for their service and their monthly pip counts, to shed some light on the darker side of forex. Visit our website and join in the forums discussions regarding these services.

Create your Own System for Better Trading

If anyone wants to be a trader in the world of currency trading then he or she must know that this is not a breeze game or as easy to rolling one’s bed. Trading in the Foreign Exchange Market is actually serious business. So, you should respect and give extra attention about it. People who don’t take the business with enough respect ends up losing their investments soon. It can be the best thing you do in your entire life whereas at the same time, it can turn into your worst nightmare. Which one will be it totally depend on your performance. To beat the forex market you must bring into the light yourself with the different concepts of this deal, the basic trading skills, the pros and cons of the business, a lot of discipline and the sufficient knowledge to create your own forex trading system in order to run it successfully.
There are some people who may argue that why should you bother to make own system when there are several proven methods. They are available for taking in the net. So, why own system? The answer is very easy and simple because trading in the forex market is not the same for all. The greatest trading system for one may not be effective for another. Those systems are created based on both the goal of being able to identify trends and making money, and personal preference. For instance, the initial thing any trading system should have is a timeframe; if the timeframe used by any system is something you are uncomfortable with then it is not a suitable system for you. Actually it is very easy to create own forex trading system particularly with free demo accounts which are available in the web. You can test your system by use them. You should not spend thousands or even hundreds of dollars on anything because you can do better on your own. So, try to create your own system to get better success in forex trading.

Introduction to the Foreign Exchange Market

The rationale behind this post is to break down the inner workings of the foreign exchange market and perhaps provide some enlightenment on the current situation, the forex market in general, the reason why we have and need forex brokers, and how forex brokers make their profit. More importantly, it aims to provide some understanding as to why we, as forex speculators, can and should, despite a very volatile market, continue to trade.

Rationale

Let’s start with a basic explanation of why the forex market came to be, and how it is used by its principal participants. We’ll continue the explanation into the structure of the market, and how it operates. In conclusion, we’ll look at the implications and how this affects speculators.


The forex market isn’t usually used as a medium for investments, unlike other markets, such as those that trade equity and bonds. While speculation plays a smaller, but nonetheless important role, the vast majority of forex trades are primarily made as a means to facilitate international business transactions.

An example might help to shed a little light on this. Let’s say you’ve got a guy in Detroit who decides he wants to buy a nice shiny new import. He’s got his eye on a Mitsubishi Eclipse and goes to the local Mitsubishi dealership, where he’ll naturally pay for his car with U.S. Dollars. That’s all well and good, but the Japanese workers in the Mitsubishi factory in Japan naturally want to get paid in their own currency, namely Japanese Yen. Somewhere along the line, the U.S. Dollar money from the car purchase has to be converted to Japanese Yen to pay those workers.

If you think about it, huge multi-nationals like Nestle, Exxon-Mobil, Microsoft, Honda, Sony, G-E and tens of thousands of other smaller global entities move nearly every single U.S. Dollar, Japanese Yen, Euro, Pound Sterling, Saudi Arabian Riyal, Brazilian Real and Russian Ruble plus dozens of other foreign currencies you’ve never even heard about, through the foreign exchange markets. In a single day, more than $2.3 trillion in foreign exchange is traded, and that figure is expected to rise to $3 trillion within two years time. It isn’t difficult to comprehend, then, how truly insignificant is the presence of the individual speculators.

The fact is, businesses don’t really care (much) about the variances and intricacies of the foreign exchange rates. They’re in the business to make a product, sell it and reap the profits.

A bank, as the central depository of a company’s cash, is naturally the facilitator of a company’s foreign exchange transactions. Decades ago, it was a matter of a simple telephone call from a banker in one country to another banker in a different country. Banks that had an international presence could merely do a branch to branch transfer.

Remember, banks are in the business to make money, just like any other business. So when a bank bought foreign currency at one price, they naturally added their margin to it before selling it to another customer. That margin is called the spread. For all intents and purposes, that was, and remains, a fairly reasonable cost.

From our earlier example, Mitsubishi gets Japanese Yen in payment for the Eclipse, and is now able to pay its workers who built the car. The car owner is happy, Mitsubishi is happy and the Mitsubishi factor workers are happy. The banks which facilitated the foreign exchange transaction are also happy, because they earned a tidy little profit (the spread) for handling the transaction, and for accepting the associated risks inherent with foreign exchange.

One of the consequences of transacting all this foreign exchange business is that bank traders soon developed an ability to speculate as to the direction of future currency rates. With a better grasp of how the market works, a bank could give a customer a quote adding a spread to the current rate but actually hold off or hedge until a better rate comes along. In so doing, the banks were able to dramatically increase their net income. One unfortunate end result, though, was that the method of redistributing the liquidity made it impossible to complete certain forex transactions.

For that reason alone, the foreign exchange market needed to be made available to non-bank participants. Naturally, the banks wanted to be able to execute more orders in the forex market which would allow them to profit from less experienced participants (who provided a better distribution of the liquidity) and which permitted them to execute their hedge orders from their international customers.

Trade Mechanics

Given that there is in excess of $2 trillion a day being traded on the forex market, it’s easy to believe that there will always be enough liquidity in the market to do what needs doing. Sadly, belief doesn’t negate the truth that for each and every buyer in the market, there MUST also be a seller, otherwise no transaction can occur. If an order is too big to handle at the current price, then the price has to move to a point where there is enough open interest to cover the transaction. Each time you see a price move even a single pip, it’s an indication that an order was transacted or executed which “consumed” the open interest at its existing price. Prices can move in no other way.


As we discussed previously, each bank lists on the Electronic Broking Service how much and at which price the bank is willing to transact in a given currency. It’s important to note that Interbank participants are under no obligation to enter into a transaction if they feel it is not in their best interest. Remember, the Interbank has no “market makers;” only speculators and hedgers.

You may notice that there is generally open interest of different sizes at different prices. Each of those units represents an existing limit order; in this example, then, each unit is representative of $1 million in currency.

Knowing this information, say a market sell order is placed for 38.4 million, then the spread would widen instantaneously from 2.5 to 4.5 pips simply because there would not be any orders that were between the 1.56300 price and the 1.56345 price. The spread wasn’t increased by any broker, bank or market maker; it was a natural byproduct of the sell order that was placed. Provided there were no additional orders, the spread would continue to remain that large. Fortunately, at some point in time, someone somewhere will look at a price point somewhere between those two figures as an ideal opportunity and place an order. Such an order will either consume (remove) interest or increase it; the action it takes will largely depend on whether or not it’s a market order or a limit order, respectively.

You may wonder what might have happened if a sell order for 2 million is placed, just a split second after the 38.4 million order hits? That order would be filled at 1.5630. You may ask why was that order “slipped?” Because no one was willing to take the flip side of the deal (at 1.56320). It’s not that anyone was trying to cheat the trader; again, it was merely a by-product of the order flow.

The more interesting question would be what if all of the listed orders were canceled suddenly? In that case, the spread would increase to the point at which there would exist bids and offers. Now, that might be 5, 8,10 or even, say, 100 pips. It will widen to whatever is the difference between the bid price and the offer price. Nobody came in to “set” the spread; they merely refused to enter into a transaction at any price between it.

You can’t force an order into existence that simply doesn’t exist. Regardless which market is under examination, or what broker is attempting to facilitate a transaction, it is nearly impossible to avoid both spreads and slippage. In the trading world, they are simply a fact of life.

Online Forex Trading - These Two Simple Equations Can Lead You to Huge Gains

Enclosed you will find two equations which most traders don't understand and that's why most traders lose however if you understand them and incorporate them in your Forex trading strategy you could be on the road to huge gains... Let's first of all start with the equation which relates to how and why markets really move and it's this: Supply and Demand Fundamentals + Human Perception of them = Price Simple? Yes it is but most traders fail to see its signifcance which is: It's not the facts that are important, its how humans perceive them that is; always remember humans are creatures of emotion and don't conform to some scientific theory which means all the commonly perceived views below about trading Forex are wrong: - You can predict market movements in advance- You can trade breaking news and the facts - Markets move to some mathematical theory - You can make money from short term moves i.e. scalping or day trading. Its clear that markets move to probabilities not certainties. So using complex theories or mathematical theories is doomed to failure; its also impossible to work out what millions upon millions of traders will do within a day, as all short term moves are random and breaking news stories and facts cannot be traded, as the facts by themselves not important, its how there perceived that determines what happens next. So how do you trade online Forex markets and win? In an odds based market, simple systems works best and you should simply trade the reality of price change on a Forex Chart. Most traders make Forex trading more complicated than it really is. Having a successful trading system though is not enough next, you now need to understand another simple equation to succeed. A Simple Robust Forex Trading System + Disciplined Execution = Forex ProfitsThe key to winning long term at Forex is disciplined execution of a system. If you can't execute your trading system signals with discipline, you have no system and don't be deceived, trading with discipline is very hard. The reason discipline is so hard is you are going to have losing periods ( all traders have them) and you are going to have to keep going while the market takes your money and wrong foots you and makes you feel a fool. When this is happening, you need to keep your losses small and stay on course until you hit a home run and this is hard. Most traders think they will never lose and believe the rubbish that vendors of "sure fire" systems tell them which is - losing periods don't occur or are very short. When they hit a period of losses, they simply cannot cope with them and throw in the towel. if you understand that you have to lose to win and can trade with discipline, you can enjoy currency trading success. Most traders don't really understand how markets really move and lack the mindset to win. Above we have shown you what it takes to win at online Forex trading and the rest is now up to you - good luck!

Forex Trading Indicators and the Ever Changing Market Conditions

Once you enter the Forex trading world you will immediately notice the need of using technical analysis in order to find trends when looking at the forex charts and also the importance of being aware of when they first develop so you can ride the trend until it ends. The foreign exchange market is a very strong trending market, lots of ups and downs in short periods of time, and it's, therefore, a place where technical analysis can be very effective.

But you should always remember that the indicators are only giving you a high probability behavior the markets may show when you are trading, but will never tell you the behavior of the currency prices with total certainty.

If you want to become a profitable forex trader you will need to use as many technical indicators as you can, or create a personalized trading strategy based on a combination of these indicators, to recognize with the best accuracy possible the trend. In other words, a professional forex trader will try to identify the major trend, the intermediate trend, and the short-term trend and then construct his trades in that direction based on how long their rules allow him to hold a position.

The forex markets are always changing, that's why you should always have an open criterion when using your technical indicators. Markets will be changing and different combinations of indicators may be required with time in order to have the most accurate, highest probability, prediction of future currency price behaviors.

If the action of the market shows your judgment to be correct, then you must consider staying with the market' and look for the maximum profit on each trade, according to your risk-to-reward/equity management rules. If you happen to be in a bad day and the market goes against you, the smart trader will take profits and get out of that trade. In a narrow market, when prices are not going anywhere, but move within a narrow range, there is no sense in trying to anticipate when the next big movement is going to be.

So, you must always be alert and open to use as many and as different indicators in order to stay tuned with the market and become a profitable trader at the end of the day.

by Martin Redhead

http://www.forexmentor.com

Forex Trading For Beginners - 10 Essential Tips For Forex Trading Success

If you are new to Forex trading you understand need to understand that 95% of trades lose. If you want to win you can but you need to follow these essential trading tips. Here are your ten tips and there in no particular order of importance, there all important!1. Don't Use a cheap Forex Robot or Expert Advisor If you think you are going to get rich by paying out two hundred dollars or less for a cheap software package think again you won't, all these systems lose money. If Forex trading were as simple as paying a few hundred dollars for a lifelong income, 95% of traders wouldn't lose money. 2. Accept Responsibility Leading on from the above point, it should be pretty obvious that you need to accept responsibility for your actions, learn skills and get a decent Forex education. 3. Work Smart Not Hard You don't need to Work hard just get the right Forex information and that should only take you a couple of weeks at most and your all set. 4. Keep Your Strategy Simple Simple trading strategies work best as they are more robust than complex ones, with fewer elements to break, so keep your system simple. 5. Use Technical analysis This is simply the most time efficient way to trade and all you need to do is learn the right chart formations, to spot profitable chart set ups and that's a learned skill. 6. Be PatientDon't trade to often, once or twice a month is enough to make big gains and is the best way to trade, as you will be focusing on the high odds trades which offer the biggest profits.7. Use tight Money Management You are going to get losses, so make sure you keep them small and always place a stop before you start to trade, so you are not tempted to run losses and hope they turn around - most times they don't!8. Use Sensible Leverage You can get 200: 1 leverage with any Forex broker online but this is far too much and you will eventually destroy your account. 10- 20:1 is plenty for most traders. 9. Learn Discipline You will here this word a lot and it's the key to Forex trading success. You must follow your system with discipline and keep your losses small. If you can't follow your system with discipline you don't have one!10. Be RealisticDon't be afraid to make mistakes or take losses, all traders do and you will too. Forget perfection and focus on making money; if you can make 50 - 100% in your first year of trading you are up there with the best and can be very proud of yourself. These are 10 very simple tips for novice Forex traders and if you follow them you could be on the road to Forex trading success and a great second or even life changing income.

FOREX-Asian comments provide a big boost to the dollar

FOREX-Asian comments provide a big boost to the dollar

The dollar recovered from its lowest levels this year against the euro on Wednesday after monetary sources in Asia said they would keep buying U.S. Treasuries even if the U.S. credit rating were to be cut.

The remarks from sources in China, Japan, India and South Korea [ID:nSP412010], compiled by Reuters from separate interviews, helped to stem recent selling that has driven the dollar index .DXY to its lowest this year and down more than 7 percent since the start of May.

Traders viewed the comments as an expression of support for dollar-denominated assets from the nations that control about half of the world's currency reserves. Dollar weakness would erode the value of U.S. investments.

"As the dollar continues to weaken, vocal intervention of this sort will rise," said Jacob Oubina, currency strategist at Forex.com in Bedminster, New Jersey. "This at least sets some kind of ceiling on euro strength and puts a floor under dollar weakness."

The euro pulled away from a five-month high it had hit in early trade and selling accelerated after the Reuters story was published. Sterling retreated from a seven-month high against the U.S. currency.

In early New York trade, the euro traded 0.7 percent lower at $1.4210 on electronic trading platform EBS , after hitting a session low $1.4177 and falling from $1.4339 hit in early trade, its strongest since December.

The dollar index, which tracks the currency's moves against a basket of six currencies, rose as much as half a percent after the comments, keeping just above its lowest level of the year hit on Tuesday. .DXY

Some of the dollar's slide in past weeks has been attributed to speculation that the U.S. credit rating may be downgraded, a move that may prompt nations to diversify their foreign reserves away from U.S. Treasuries.

The comments by the monetary sources in Asia came after a visit by U.S. Treasury Secretary Timothy Geithner to China, the world's biggest holder of Treasuries, during which he assured Beijing its U.S. investments were safe because Washington is committed to a strong dollar policy.

Analysts said that the dollar-positive comments had prompted traders to lock in profits against the suffering U.S. currency and that it might help to stem its recent selling for the time being but was unlikely to change the trend.

"The market is becoming somewhat stretched on short dollar positions as there has been decent-sized buying in euro and sterling, so traders were looking for a reason to calm things down," said Geoffrey Yu, currency strategist at UBS in London.

Tips for New Forex Traders

Forex has always been a magnet for investors and traders, who are looking for an exciting business venture to invest in, giving them the thrill, adventure and excitement, along with an idea of a quick and easy way to make profits.

But, for those who are relatively new to the Forex trading world, it is extremely important to know exactly what you are getting into. When it comes to the matter of investing a huge amount of your hard earned money into something, first time investors should always make sure what they ought to expect out of it. What should and should not be done. What steps should be taken to play safe and what to do that keeps them at away from the frauds and scams.

First of all what needs to be learnt is, what is Forex and how does it work? What need’s to be known next are a few important trading tips, which will facilitate you during your transactions.

Foreign Exchange or Forex or FX is one of the biggest money market in the world, and is a platform where currency is sold and bought freely between buyers and sellers. Forex, unlike any other financial markets, has no physical location or central exchange.

With over $1.5 trillion USD being traded daily, the foreign exchange market has now become a market which is open to trading by an average investor as much as it is open to a high investor.

Launched over three decades back, in the early seventies, Market Forex introduced free exchange rates worldwide, according to which, the price of the currencies was determined on the basis of demand and supply only.

A number of reasons are responsible for making Forex a distinctive financial market. To begin with, no external regulatory authority is allowed to set or fix currency prices or rates in this market, making Forex is market which cannot be controlled in any way. Also, it is one of those few money markets that necessitate very little trading education, training and experience.

In order to know the Forex market well, the new traders should know how to start trading Forex. The few important things to be kept in mind when beginning to trade Forex are as follows:

What needs to be done firstly is, to open a Forex account. This can be done by filling up an application form, providing the required essential credentials, like personal details, financial particulars, and other details such as whether or not, a broker will be allowed to mediate with any trade if it appears to get too precarious and dicey.

Once your account has been created and recognized, you can begin to flow cash in to it and start trading Forex.

New Forex traders are always advised to create two accounts while trading, one of them being a real account, while the other being a demo one. A real account will facilitate the trader to actually trade in the market, with real money.

The demo account helps the new investor learn more about the trading business. This way the new trader can practice his moves of trading in the market, without the fear of losing all his money in case he/ she goofs up or ends up making the wrong deal.

Also, before you start trading in the market, you should have a closer look at all the top five foreign currencies and their current rates to make sure, you are aware of the current rates and are not missing anything.
The top five Forex currencies are: Pound/USD, Swiss franc/USD, Euro/Yen, USD/Yen and Euro/USD.

Always keep a check on the market. With the time intervals on hourly, daily and weekly schedules with all the currencies that are in any way related to your trade.

Being a successful trader requires to come up with individual and unique trading strategies. There is no “Golden Mantra” or “Trade Secret”, which will work for the traders.

Every investor needs to come up with their own, personal and distinctive trading approach when it comes to the market. There are different ways by which, the traders approach the market. Sometimes they may bank solely on industrial and technical analysis.

Some may like better to go in for a more elementary and basic approach for trading, while others may make use of the past records of the market, combined with both technical as well as fundamental techniques for trading.
All these strategies help the traders in studying the patterns of currency price trends and movements, making it easier for them to foresee the course of the potential developments in the Forex market.

Currency prices in Forex market mostly move in trends. They have a pattern, through which, certain movements can be studied. Some of these movements which have been studied over several years mostly help in discovering that pattern in the market trend. These trends are what should be recognized and valued properly, to facilitate the creation of an excellent trading strategy.

Any factors, financial or political, having some control over the value or the price of a currency, have already been measured by the market to be included as an important factor in creating a price trend.

When trading for the first time, it is always advisable to invest by the trends. Trading with a trend can facilitate you by advancing your chances with profit. Many new investors are enthusiastic to start trading as soon as they can, eventually ending up trading in any direction.
Trading by a trend or following a pattern and studying the market can increase your odds of being favored by the market, making your trading prospects high.

THE CAUSES FOR MOST DEVASTATION IN DA FOREX

It looks and seems so simple - just buy and sell, or buy and sell using sophisticated trading indicators and the modern commercial software. All you have to do - it cut its losses and find a trading system that wins more than loses money polyutsya river!

You are viewing all the best books on trade, in which a trader in another state that they are doing a lot of money, because it knows how to use the correct methods of trading. The author is a man who has just lost his job and now trades from his home and earns much more money than ever before!

You say, "I can do it, I'm ready. I've been using their savings, and by trade will make them millions. So, you're going to make their millions and live a beautiful life! You buy the latest trading system, which promises more profit. No waste of time to a virtual trade or to develop your trading skills - you must begin to make money now, because you need the income and all you want to show that you have succeeded!

This is - a fantasy that lures in a trap so many novice traders. The reality is that it is very difficult to trade with consistent profits. In fact, 90 percent of all traders lose money in the trade! Most novice traders lose their money within the first 6 months. So why trade is so difficult?

Requires responsibility, discipline, reason, concentration, hard work, practice and time to become a profitable trader. It does not depend on trading systems, because the best trading systems are a by-product of the trader. "Best" in one way or another, is a relative term, because what is best for a single trader may not be the best for another, as their trading styles are different.

Beginner trader should strive to develop a reliable trading approach, based on his beliefs and to exercise strict control over the risks and proper management of money. Traders must have the discipline to manage themselves and their trade. Only one out of this because a lot of novice traders. Still, much depends on the fight with his mentality and his reactions to market events that awaken fear and greed.

As a trader, you should be fully aware about the reality. Let your positive beliefs lead you to take the actions necessary in order to succeed. However, this does not mean that traders can enter the financial markets and start trading blindly, simply because they are positive and ignore the whole spectrum of what is possible when trading in the markets.

You should be aware of both sides of the coin, good and bad - and respond with a full understanding of this. Everyone wants easy money, without a hard work necessary to achieve success. However, success must be earned. May take many years before you will make a profit. Everyone has different strengths, which he can use and different weaknesses, which must be overcome, and the time required to achieve success, will be different for everyone. There is no quick path to success, as there is no "Holy Grail chalice".

Most traders spend their time looking for answers side, but the answers are in them!

TRADING ONLY WITH MOVING AVERAGE

At the moment I am rather busy. Moving to a new place and house. The house still needs a lot of work. As a result, I do not have time to update this blog. Trading is still going on but on a shorter timeframe. Result is consistent now. AudUsd is very kind at the moment with no sudden movement.

In the next few weeks I will show you how to trade using only MA. As usual what works for me may not work for you. This is because some of you may not be able to follow the rules of the game.

RULES OF THE GAME
1. Trade based on your capital and the time that you have. The bigger your capital the longer the TF. The more time you have the longer the TF. Vice versa.

2. Only trade at the direction pointed by the MA pairs. If the MA pairs is showing mixed direction, do not trade. The MA pairs must be pointing at the same direction.

3. If a trade suddenly change direction, do not hesitate to close it at a loss and turn the trade. This is the hardest part where most of you failed. Free your mind or become a loser all your life.

4. Keep in mind, there is no such thing as winning all the time. Just make sure you win a lot more than you lose. In the end your profit will grow along with your confident.

Simple system with simple rules. I like to keep it simple. No point of having the most complex system when simple system can have the same result. With this system you will be out of the market most of the time. This is because you will only be taking the big move and avoiding the small move and market noise.

Last advise. Do not anticipate. Forex is not a game of inteligence eventhough this system at full swing will show you possible turning point. I am having a possible turning point for audusd at 0.7200 but I will not take it coz there will be market swing before the actual turn. Why wast time waiting for the big move when you can actually see when its going to move.

In the mean time, good luck for all of you. I will be back once my pc is online again. At the moment I am posting this on a laptop. I dont like laptop, too small keypad, makes it hard to do speed typing.

Trend Lines: Good Areas to Buy Stocks

Trend lines define and confirm trends by connecting a series of highs or lows. Trend lines offer excellent places to buy stocks within an uptrend, because they offer a natural stop loss area just below them.

Right now, the stock market is trending higher. We’ve been swing trading aggressively on the long side during the past few weeks, but the virtual straight-up move lately offers little in the way of new stock picks for buying. While the trend remains solidly up and we’re expecting additional rallies in the coming weeks, we’ll be looking for pullbacks to uptrend lines to establish new positions.

One example of an uptrend stock is AAPL. We highlighted AAPL in our stock newsletter on November 10th with a buy price of $61.25. Wednesday it reached $67.98, which is a very nice gain of 11% from our buy price in less than 2 weeks.

This stock and many others will be on our radar to highlight for additional buys in the near future as they find rising support at their uptrend lines.

Downtrending Stocks - Don’t Buy!

Everyone wants a great deal. If you don’t think so, just consider the day-after-Thanksgiving sales with people lined up outside the stores at 5am to buy merchandise on sale. We want things now and we want them cheap! When it comes to stocks, however, I know better.

They say to buy low and sell high. It’s a good concept if you can get it to work, but it implies that buying low is the first thing to do. Novice stock traders look to buy “cheap” stocks, whether it’s just a low-priced stock or a stock well off its highs. Remember, cheap stocks tend to be cheap for a reason!

Low-dollar stocks often fall into one of two categories: the former high-fliers which have split so many times and come down so far that they are simply too liquid and “thick” to make much of a move (LU, NT, etc.), and stocks which are cheap because they fizzled out long ago and no buzz has been generated since. These kinds of stocks don’t move enough for an active trader, unless you are as interested in trading so many shares that your broker makes as much in commission as you do in profits.

A downtrending stock is making lower highs and lower lows. Money is coming out of it. People are walking away in search of finding something more attractive. When you buy a stock, you want it to go up, so look for stocks with some buzz, some positive activity, and some momentum.

An example of how disastrous it can be to buy a downtrending stock is MOVI. This stock began trending lower many months ago, and has shed most of its value.

MOVI continues to trend lower, and buying a “cheap” stock would have been costly!

Consider the novice traders who wanted to buy a stock off its highs. They may have moved in to pick up shares in late June near $27 or so, which was more than $7 off the recent high. Those buyers never saw their trade turn profitable. What if they “averaged down” in the $20 area, hoping to catch a quick bounce to let them out? All they did was compound their losses. What about now that the stock is trading near $5.00? Would you feel like getting up and running after falling off a 20-story building? This stock probably doesn’t either. It’s best to stay away fromchart patterns like this until the buyers regain control and the stock begins to build some upside momentum.

Buying stocks in downtrends is a recipe for disaster. Save your bargain-hunting for the retail stores and holiday shopping, but prepare to pay up if you want to buy a stock and turn a profit!

Home Equity Line Of Credit

Home Equity Line of Credit is abbreviated as HELOC. This refers to a loan in which the lender agrees to lend a maximum amount within an agreed period. This differs from standard loans or a reverse mortgage because the borrower is not advanced the entire sum up front, but uses the line of credit to borrow sums totaling no more than the amount.

A Home Equity Line of Credit in many ways is similar to a credit card. At closing you are assigned a specified credit limit that you may borrow up to (this is not a check).

A draw period usually lasts anywhere from 5 to 25 years and allows you to borrow HELOC funds whenever you feel the need; you're only required to pay back the amount you use plus interest.

What's nice about the home equity line of credit is that often, you are only required to pay the interest until the end of the draw period. At the end of the draw period, you'll have to do one of the following:

* Pay back the full principal HELOC amount borrowed
* Pay a Home Equity Line of Credit balloon payment
* Pay based on a loan amortization schedule.

HELOC vs. Conventional Loan

HELOC's differ from a conventional loans in that the interest rate on a home equity line of credit is variable depending on an index (Prime Rate for example). In plain terms, this means your interest rate will most likely change over time!

What makes a Home Equity Line of Credit so popular is that interest paid is usually deductible under federal and most state income tax laws; this makes that cost of borrowing money not as high!

Sounds easy, so why doesn't everyone do it? Most people are doing HELOC's and most can't afford it! These people are considered to be Upside Down – a term used to describe someone who owes more on their home than it's worth (much like a car :)

Here is the catch! You owe $80,000 on your home loan and your house is worth $90,000 on the open market. You decide to apply for home equity Line of Credit and the banker asks you what you would like the loan for - That's right! Most of the time, you can ask for more than your home is worth, say $110,000 and almost always, you'll get the loan.
$30,000 to Invest

Now you have $30,000 and live the life for awhile, perhaps a new boat, car or vacation. Then comes the day you need to sell your home but it's only worth $90,000 and you need $110,000 plus the realtor fee of $7,700 (7%), so you put the house on the market for $117,700 and it never sells, payments become late and worse case scenario, you have a foreclosure on your hands! See for yourself, check out our Mortgage Calculator!
HELOC – Not always bad!

A Home Equity Line of Credit can be good or bad depending on how you use it. There are 10 things savvy home owners should look for when considering a Home Equity Line Of Credit:

1) No HELOC application fee or at least the fee should be refunded at closing. If your lender assesses an application fee, make sure it's refundable at closing.

2) No home loan appraisal or closing costs - there are plenty of no-cost options available that you shouldn't have to pay a HELOC appraisal fee.

3) No HELOC account maintenance or check-writing fees - Lenders already make money when you write checks (read - borrow) on the home equity credit line. If your lender tries this, dump him!

4) No "usage" fees – Apparently, HELOC lenders don't approve of the notion that a homeowner may want to have a HELOC as an emergency "reserve" account. Definitely look for a lender that does not charge this type of fee.

5) Variable APR equal to or near the prime rate (adjusted quarterly) – Interest charged on the balanced borrowed should be the only cost involved with a good home equity credit line!

6) Periodic cap on interest rate changes (the amount that the rate can be changed at one time) - Look for a Home Equity Line of Credit that adjusts quarterly (rather than monthly) in increments of 0.5% or less.

7) Lifetime cap on rate increases (the amount that the rate can be adjusted over the loan's life) - You'll want to find a HELOC loan with a lifetime rate cap that you can live with. Ask your loan officer to clearly spell out the "worst case" scenario for HELOC rate increases!

8) Ability to convert to a fixed rate loan - When rates do rise, people often get skittish about their variable-rate debt. A useful feature to look for in a HELOC loan is the ability to convert the line of credit to a standard fixed-rate, fixed-term home equity loan.

9) Interest-only payments allowed – Get this option but only use it if you need to! It's always best to pay down the principle, not just interest!

10) Unrestricted ability to repay principal without penalty – You should be able to pay off the Home Equity Line of Credit at any time without paying extra!

Enjoy these ten basic tips and now, more than ever, be careful! There are a lot of shady deals out there and if you don't take your time reviewing the fine print, it will come back to bite you! Also make sure the pay close attention to any PMI that are presented.

Triple Bottom Pattern

Chart patterns work the same on an intraday basis as they do on a daily chart. Today I was watching GRMN, which had been weak all day and was nearing the lows of the day. I actually was waiting for a breakdown to short sell the stock, but once the lows held, I noticed a familiar pattern – the triple bottom pattern. Immediately I bought the stock and set my stop loss for the low of the day. Momentum began to build as the shorts started to get squeezed, and I had quite a nice winner on my screen. While I didn’t catch the entire move up, I did catch a big piece of the move and it was great for my P&L.

Triple bottom patterns aren’t just found on daily charts - they can also be found and traded on an intraday basis.

Be sure to apply well-known chart patterns to your day trading as well as your swing trading. Being a flexible trader with a willingness to change directions when your original thesis is proven wrong can pay off very nicely!

The psychological aspect Of Trade

Brett N. Stinberger - Doctor of Philosophy and Professor of Psychiatry at the Medical University in Syracuse, NY. New York. He is also an active trader and writes articles on market psychology. The author of the book "Psychology of Trade, 2003. Doctor Stinberger published over 50 articles on short-term approaches to behavioral change for traders.

If I had to give one piece of advice to most traders, who are struggling with their ratio of profits to losses, it would be to trade for a proven systems and models and sell them systematically. If you look at very successful companies, such as "McDonald's", "Dell", "Federal Express" or "Wall-Mart", then find a company that makes the same things and in the same way every day, with high degree of consistency. They invented the formula for victory, which is the key to success and they are doing this formula with high fidelity and regularity. That's exactly the way you have to sell.

Thus, this raises two important questions for any self-trader:

. Do I have a formula for victory, and whether I have checked to make sure it is successful and to have the necessary confidence in this?

. I sincerely follow his formula, and whether I track every transaction and know that I follow the formula and to have confidence in their ability to follow it?

A very large percentage of traders that have applied to me for help, they could not honestly answer these questions affirmatively. They want to get help for themselves, when what they need - is the need to consider their trade as a world-class business.

Trade and individuality
About three years ago, I along with Linda Raška examined a group of about 64 active traders. We wondered whether any particular individual and repetitive style that distinguished the more successful traders from the less successful. We received a large number of results that lead to think. For example, we found that successful traders have a lower level nevrotizma (negative emotional experience) than their less successful colleagues. They also used methods are more focused on problem-solving (developing strategies to deal with problem situations), as compared with the concentration on their emotions. Successful traders, as we found higher were evaluated on a scale of "good faith", reflecting the motivation to follow their plans and commitments. In general, these results confirm what many of us have seen in my career on the market: traders to temper their emotions and act on the basis of his plan, selling better than their more emotional and impulsive counterparts.

However, it was unexpected and a conclusion in our study, which was that a disproportionate number of successful traders - about half - said of the use of mechanical trading systems. Of the unsuccessful traders, no one has used a mechanical approach. When I later took an interview with successful traders, it turned out that even those who were not committed to trading systems that base their transactions on the models that they have carefully studied. On the contrary, almost all unsuccessful traders lacked such training in relation to the models and research.

In his recent book "The Psychology of trade" (2002), I describe these successful traders as the following rules. I am confident that the main reason why they were successful is that they use trade rules for the conduct of its trade, and to maintain a positive mental attitude. In this article, I would like to explore in detail why trade rules are one of the most powerful psychological strategies that can be used in active trade.

Psychology rules
What is a mechanical trading system? Basically, a set of trade rules. They perform several functions. The first of these functions - logic: the rules are designed to maximize profits by exploiting the anomalies that arise in the relatively efficient markets. Each set consists of trading strategies that the statistics referred to as rules of decision-making. That is, they set the terms - A, B,. n, that the market must comply with before traders come in long or short side or a closed position, etc. The idea is that, without these conditions, the likelihood that the open position will be determined by pure happenstance profitable. As soon as we upgrade this probability under certain conditions, greatly increasing the chances in favor of the trader. While any individual transaction may not prove beneficial, for a sufficient period of time and with sufficient number of transactions, the increase is likely to affect the curve of the trader's assets to the extent to which the decision rules were investigated. Is vital for any trader to know how the system has been developed. Has it been tested over a period of time, regardless of when it was developed? Is it work in real-time comparable to its historical performance? Is the built-in logic is obvious, or there are too many parameters, complicated logic or other signs of adapting the system under certain conditions?

Less well-valued function is that such rules have a second decision, psychological function. Body of trade to a set of rules, traders reduce its ambiguity so that it can operate on automatic mode. This allows precise control of the new trading opportunities in a way that improved their chances could ultimately work in favor of the trader. With the reduction of ambiguity, the rules make a significant contribution to the sense of mastery and reduce much of the stress associated with high activity of this kind of activity. Think how hard it would be to move in a lively city where there are no rules of the road! Almost exactly the same emotional state of many traders, who operate without any rules. The existence of trade rules provide the procedure, as opposed to chaotic process.

However, in order to serve the system of psychological help, it must comply with the identity of the trader. A study conducted by the London Business School, shows that there is another personal trait - extraversion, which shows a positive correlation with tolerance of risk. Some traders are far more inclined to take risks than others, simply because of their individual characteristics. It is essential that the system on which you sell, take this into account. Thus, the ratio of profits to losses of the system is only one parameter, which should be evaluated when searching for a better shopping method. Statistics of the recession and the percentage of winning / Losing transactions can be crucial for the psychological comfort of the trader. For instance, I discovered for myself that I was much more successful at short-selling within-day models, than on large fluctuations. With the average holding time positions less than 30 minutes, I can get a small profit with reasonable consistency, maintaining its concentration on trade and limiting its losses. While I theoretically possible, can make more money, in keeping with longer-term fluctuations, in practice this does not happen. Increased volatility of longer-term time period is in conflict with my emotional state, influencing the decision to turn my bargain for the one that does not correspond to a reasonable minimum wage!

Trade is indeed a highly activity. Like other high-level activities, it requires directed effort. The football team, which is a great game is a game plan, the army seeking to wage war, develops a plan of battle; psychotherapist holds sessions with a coherent strategy to help the patient. These plans are actually sets of mainstreaming rules that, in general, the artist focuses on the challenges faced by them. In the same way in which the singer had planned a tree of decisions in advance, quickly and decisively can be found responding to the evolving situation. In many areas, trade one of them, the difference between success and failure can be a matter of seconds or minutes. This makes the cognitive efficiency of the main component of highly active activities. Expression of many years of experience in several approvals, rules and plans that improves efficiency.

This brings us to another important psychological aspect of management - to improve efficiency in decision-making rules should be simple. That is, when all the rules set out in a coordinated manner, they are plans that are flexible guide traders to complex situations. In his own trading on the index, I, for example, share each day into four parts: a morning session, midday session, day and night session (Globex) session. Then I assess market trends and sub-trends, measure the degree of institutional purchases / sales and looking for testing and breakthroughs from one period to the next for the intra-day transactions. By combining simple rules of decision to segmentation trading day, I can come to each day with a flexible strategy that is not slaughters my head.

Regulation and function of the brain
Research in cognitive neuroscience also help illuminate the value in the management of the rules on the basis of performance. We know that the area was named predlobnoy cortex is largely responsible for what is known as "executive functions" of brain. They include planning, reasoning, decision problems, and many of the actions that allow us to engage in purposeful activity. When predlobnaya bark is damaged, the result will be a "disability syndrome" in which patients are unable to plan and carry out complex actions. They are easily distracted, reflecting the lack of memory and concentration. As a result, even the simplest coordinate concerted activities like visits to the food store, can cause trouble.

Recent theories of attention deficit and hyperactivity syndrome (DVSG) argue that the lack of predlobnoy cortex leads to a periodic absentmindedness with hyperactivity children. Indeed, studies have found a decrease of blood flow to predlobnym areas in these children. Interesting, but the same decrease in blood flow occurs in normal people during the high emotional stress or disorders. As an emotional experience is processed by the lower cerebral structures, located far from predlobnoy crust, the relative blood flow to the frontal area is a useful measure of executive abilities. When a person is highly upset, for example, deactivation of frontal cortex leaves him in a position where it is becoming like a child DVSG or incompetent patient. How many times have you looked at a losing deal, and wondered whether you were in his mind, when placed an order? According to brain research may not exist!

Traditional trading wisdom says that we need to manage their emotions, acknowledging that it was very emotional state make us more vulnerable to losses of concentration and impulse behavior. When we activate the wrong brain area, we can expect the adoption of the wrong trade decisions. The rules allow us to firmly adhere to the appropriate trading actions, regardless of the psychological and emotional state, which we feel at this time. Indeed, the full process of formulating, coordinating and following the rules will increase the executive functions necessary for proper trafficking. It is really that remain committed to the rules is a way to stay focused and rational. That is why, I believe, with Linda, we noticed that the successful traders tend to follow the rules and be systematic.

Conclusion
Habitually enough to hear, as traders argue that the emotional composure is the key to profits in the markets. This article suggests that the converse assertion is also true: Strict adherence to good trading rules and systems is one of the most powerful ways to maintain a positive emotional state in the trade. When we operate according to the rules, we are in a psychological state which allows for effective perception of decision problems and actions. Therefore, training to follow the rules during the rehearsals of trade is an effective strategy for the cultivation of the rules for trade in real terms.

Different systems of law can work in different ways for different traders, depending on the time period selected and traded market. For example, some rules will use statistics such as ticks and increasing and decreasing the number of shares during the day, which would not have to trade in agricultural contracts, but may be useful in intraday trading on stock index fluctuations. Other rules, such as trade practices in the breakthrough may be more widely applied in various markets and would allow to hold the position for a long period of time in order to maximize potential profits.

Ultimately, the rules and systems, which you follow, and their implementation in successive trading plans must be your identity, including your risk tolerance. The research work on your system - identifying its strengths and weaknesses, and the initial trade on it on a small position provides a great help in building your confidence to trade and to ensure that the rules work for you. If you believe many of the traders, who took the interview, Jack SCHWAGER, the key to success in trade is the commitment of its own study of the curve. Defining the systems that work for you, transforming them into coherent strategies and methods of trade and the detailed study of them in order to feel comfortable with them, is an important part of this process.

Forex Market Deconstruction

Now that the trading week is over I thought I'd write about a few things that came to mind over the last couple of days.Current SituationEveryone is expecting the Fed to come along and put a multi-hundred billion dollar package together with the help of congress. Obviously, this is relieving a lot of the unprecedented pressure on both stocks and various Forex markets. The only fly in the ointment I'd keep an eye on is whether or not things get delayed for any period of time

Carry Trade Panic Selling?

Did anyone notice the panic selling out there?All kinds of carry trades unwound several hundred points in a very short period of time. Speculation in the Forex news rags suggests that losses due to the falling stock exchanges forced people to unwind their carry trades to cover their margins.In any case, after days of regimented downward movement, the sudden fallout represented a panic moment -- for someone. In the short term, at the very least, this should represent opportunity. I've stuck my toe in.

AUD/JPY Trading Week

Well, the last couple days weren't as good as the first portion of the week, but they were still positive. I'm not complaining!Thursday and Friday were positive by 0.4% and 1.1% respectively. So, for the week, that gave me a NAV gain of 23.2% in total.If you've been following along you know that I only have a tiny total account size. However, the current plan, now that I seem to be able to generate profits, is to grow the account to a meaningful size

Understanding Forex Quotes

Reading a foreign exchange quote is simple if you remember two things:

1. The first currency listed is the base currency
2. The value of the base currency is always 1.

As the centerpiece of the forex market, the US dollar is usually considered the base currency for quotes. When the base currency is USD, think of the quote as telling you what a US dollar is worth in that other currency.

When USD is the base currency and the quote goes up, that means USD has strengthened in value and the other currency has weakened. Rising quotes mean a US dollar can now buy more of the other currency than before.

The world's most traded market, trading 24 hours a day

With average daily turnover of US$3.2 trillion, forex is the most traded market in the world.
A true 24-hour market from Sunday 5 PM ET to Friday 5 PM ET, forex trading begins in Sydney, and moves around the globe as the business day begins, first to Tokyo, London, and New York.

Unlike other financial markets, investors can respond immediately to currency fluctuations, whenever they occur - day or night.

Who trades currencies, and why?

Daily turnover in the world's currencies comes from two sources:

• Foreign trade (5%). Companies buy and sell products in foreign countries, plus convert profits from foreign sales into domestic currency.
  
  
• Speculation for profit (95%).

Most traders focus on the biggest, most liquid currency pairs. "The Majors" include US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. In fact, more than 85% of daily forex trading happens in the major currency pairs

How to Read a Forex Quote

Currency Pairs

A forex quote always consist of two currencies. A base currency and a quote currency. The second currency is always the base currency. So for example, if the quote for EUR/USD is 1.36, the USD is the base currency, this quote says that the Euro is worth 1.36 US Dollars.

Bid Price

There are two parts to a forex quote. A bid price and and asking price. The bid price is the price that you will receive if you place an order to go long on a currency pair.

Ask Price

Forex quotes include a bid price and an ask price. The ask price is the price that your order will be filled at if you sell or go short on a currency pair. In the quote above, the asking price for the EUR/USD is 1.3640, this is the price your order will be filled at if you decide to go short. This is also the price your order will be closed at if you are closing a long that you had open.

What is the spread?

The difference between the bid and ask price is called the spread. The spread is the way forex brokers make their commission on your trades. If you place a long order you will receive the bidding price. When you close that long order, you will receive the asking price. The forex broker will collect the difference. If you opened and immediately closed an order, without any movement in price, you would have paid the spread to the broker.

The Benefits of Forex Trading

1. 24 Hour Market

Since the forex market is worldwide, trading is continuous as long as there is a market open somewhere in the world. Trading starts when the markets open in Australia on Sunday evening, and ends after markets close in New York on Friday.

2. High Liquidity

Liquidity is the ability of an asset to be converted into cash quickly and without any price discount. In forex this means we can move large amounts of money into and out of foreign currency with minimal price movement.

3. Low Transaction Cost

In forex, typically the cost for a transaction is built into the price. It is called the spread. The spread is the difference between the buying and selling price.

4. Leverage

Forex Brokers allow traders to trade the market using leverage. Leverage is the ability to trade more money on the market than what is actually in the trader's account. If you were to trade at 50:1 leverage, you could trade $50 on the market for every $1 that was in your account. This means you could control a trade of $50,000 using only $1000 of capital.

5. Profit Potential from Rising and Falling Prices

The forex market has no restrictions for directional trading. This means, if you think a currency pair is going to increase in value; you can buy it, or go long. Similarly, if you think it could decrease in value you can sell it, or go short.

Simple Guide to Earning Online From Forex Currency Exchange

"Earning online from forex currency exchange

is almost similar like earning online from the stock market" is common idea within most of the people who are not fully aware of the excitement and opportunity there in earning online from foreign currency exchange.

Since, we all know that the currency value of each and every country differ depending on resource accumulation of different countries.

Resource accumulation are measured on basically on these following natural mineral like Gold, Petroleum, Diamond, Platinum etc. To name some powerful currencies of the world are Dollars ($), Pound, Euro, Dirham etc.

The values of these currencies differ in terms of rate with the other development countries. So, here comes the excitement where you can earn mainly from the inter-country differentiation between the countries' currency values. The word Forex derives from the two words Foreign and Exchange.

If you are really novice of understanding what forex is, then here i am giving you some clue. I am sure you have been to some foreign countries, right! There when you exchange your own country's currency exchanging it with that country's currency is known as Forex or foreign exchange.

But exchanging the currency is not the trading because there you are not intended to ear money by investing on it. Yes, you can earn online from forex currency exchange trade. Here, you mainly earn from the difference value of the currency rate. These fluctuations of currency rate mainly depend on natural resources availability and its supply and demand in the world market. Country’s' political influences, war, economical crisis and inflations in the world market are the other factor of change of currency values of all the countries.

The main earning opportunity from online forex currency exchange which differs from the earning opportunity of stock trading is somewhat the stable movement of up and rise currency values. If you monitor and keep watch on the world market, it is comparative easy to predict the market in compare to stock market. Even multinational banks rely on forex trading rather than stock trading because you can earn more from this.

Forex trading market get controlled from London, New York and Tokyo in terms of currency value, similarly like the stock exchanges NYSE (New York Stock Exchange) or NSE (National Stock Exchange).

So, to earning online you have to keep these following points in mind:

1) Strong market prediction by analyzing the market trend. See, nobody can predict anything 100% correct but if you monitor something very seriously or closely and have adequate knowledge on the subject you can atleast make a close prediction of the future trend. Same is applicable for earning online from forex currency exchange.

2) Be informative by using your online resources. Use different search engines like google, msn, amazon or yahoo and keep monitoring on change of currency value fluctuations of different countries.

3) While doing online trading you have to be very much calculative in terms of your investment. Remember that you are investing in such a market where the value change ratio is very dynamic.

4) Selection of a right broker for you is very important. You need to check the past credential of market earning on their tips. You also need to find out from collective study that how he can be helpful for you.

5) Please remember the money you are investing in forex is comparatively safe from stock market but not 100% save, so if you invest and loss then you must have the strength to cover it. So, it is advisable to start with the minimum amount at the beginning.

These are some of the guided steps towards earning online from forex currency trading. Remember, before investing you must have a proper short term and long term strategy to for investment. Calculative measures for your expected return. Take calculative risk and not on full risk. Last but not the least in the thorough knowledge of the market by using internet to get the global news and keep you updated.