Archives: 2008 September

Anyone can learn forex trading if they want to. If you’ve never considered how to trade online then you should. Why watch your pension fund climb a measly 7% in a year when you can have more than that in a single day? Find out how in this article.

The Wheels Of The Forex Market

You already have some experience of forex when you buy foreign currency for your vacation. To make money out of it, you need to be able to predict if the price is going up or not.

The great thing is that you only need to understand a little to make a lot of money. Thousands of people do this every day.

Predictable Behaviour

The forex market moves in very predictable ways. Within a very short space of time you can easily learn enough about it to be able to predict some major movements, for instance by looking at chart patterns or watching the daily forex news.

Although it helps to learn as much as you can, what really separates a consistent winner from a consistent loser is not knowledge but discipline.

Logic Over Emotion Always

If you want to learn forex trading and win consistently then you must always use your brain and not your heart or your gut.

Always have a reason to place a trade and never trade because you “have a feeling”. Intuition is notoriously inaccurate and many traders have clocked up winning streaks only to lose it all on a single bad trade.

Have you heard about forex? Do you know how currencies are traded? What are advantages and disadvantages of currency trading?
Let’s first learn some basics about forex.
Good thing about currency trading is that you can’t lose more money than you placed.

forex currency trading

Of course, with the proper self-taught education you will win more often than lose, but you should know that despite the high leverage of forex currency trading (200:1 is possible, which means that when you put up $1 the trading vendor will allow you to trade it as if you have $200), it is still less risky than futures (commodities) trading. Because of the forex market’s liquidity and twenty four hours continuous trading, dangerous trading gaps and limit moves are eliminated. You’ll never lose more than you have in your currency trading account.

currency trading

Currencies are traded in dollar amounts called *lots* — One lot is equal to $1,000, which controls $100,000 in currency. You can control $100,000 worth of currency for only 1,000 dollars.
Currencies are always traded in pairs. The most popular currencies and their symbols are:

USD – The US Dollar

EUR – The currency of the European Union “EURO”

GBP – The British Pound

JPN – The Japanese Yen

CHF – The Swiss Franc

AUD – The Australian Dollar

CAD – The Canadian Dollar

A currency can’t be traded by itself, so you can’t trade a EUR by itself. You always need to compare one currency with another currency to make a trade possible.
The most commonly traded currency pairs are:

In trading courses I ran in the past, here are a few questions I encouraged students to think about and answer. Once they answer these objectively, I help them clear it up through a back and forth email dialogue. I thought I would share them here for the benefit of our readers:

1) Why Do You Want To Trade? The obvious answer is to “make money” but the successful trader takes this much deeper. Are you trying to get to a profit threshold that will allow you to leave your day job and trade from home? Are you retired and want to stop digging into savings to live so you want to trade to make up for that? Are you trying to create wealth with long term positions while enjoying your career outside of the markets? When students answer this question properly, it is easy for me to guide them into the right markets, time frames, and strategies.

2) What Is Your Strategy? This one is key. you must have a detailed strategy, I tell students to be as specific as they can. In other words: When exactly do you buy and sell? How exactly do you handle stops and targets and so on? From my experience, the more you can make market speculating 100% rule based, the better you will do. Even though I tell students to be very detailed here, I always end up adding rules they did not consider

Forex trading has become a topic of great interest lately, ever since the automated trading systems were introduced. What was once the sole domain of banks and other such large investors, financial and otherwise, is now luring small and mid level investors. This is the market where one currency is traded against currency of another country. Because trillions of dollars are traded 24/7, it makes this one of the largest and most active financial markets.

Now that there is internet and advanced computer technology in place, any one with an internet connection, a forex trading account and good brokering knowledge can trade in forex. However to remain on top, it requires constant monitoring as global markets are open round the clock. You could choose a currency and its price before hand with the help of these automated systems. You need an amount as seed money and a broker then your buy and sell orders will be acted upon straight away.

The automatic systems can help you enjoy the profits from this forex trading without having to be a specialist. Automated trading through managed accounts, the program itself takes the responsibility of trading for you. You save a great deal of time with these auto systems since you do not have to carryout the trading yourself. Unlike manual trading the auto trading platforms can help you manage more than one account at the simultaneously. These trading programs allow you to play in any number of markets trading multiple systems.

The need for Forex education doesn’t stop once you have become an experienced trader. Like any professional in any field you must continue to learn to continue to grow and profit. Those who are new to Forex trading should simply not start to trade without some type of Forex education or training.

Technology has dramatically increased the number of participants on the Forex markets. This has caused a boom in the number of traders speculating in the Forex market. Increased liquidity in the markets is a direct result of the increased popularity of Forex.

Since their is so much Forex information available novice traders must be selective in the information they use. Take your time and get your trading off to a good start. If you naively jump into the deep water of Forex trading you will get eaten alive. Trading Forex profitably is possible only if you know what you are doing.

Traders are attracted to the Forex markets because of the potentially huge returns on investment. They enjoy the ability to get into and out of trades more easily because of the vast liquidity of this market. Forex traders love the leverage available in Forex as compared to other markets.

Trading factors such as increased leverage are one of the primary reasons Forex education is needed. You see leverage can work for you as well as against you. In other words, more leverage means that you can potentially make greater profits but it also means the same for potential losses. This means you need to know what you are doing before you start trading Forex. The sooner you start your Forex education the sooner you have the potential to profit.