General Guides for FOREX Trading Newbie
Being new to FOREX trading? Don’t worry, getting started in FOREX trading is easy and you can always test your skills first in a demo account before you go ‘live’ with real money. To get started in FOREX trading, we have to get to know what FOREX is. For the inexperienced, FOREX trading involves buying and selling the different currencies of the world. A FOREX deal is made when one buys one currency and sells another at the same time. It is always traded in pairs, Euro/USD, CHF/USD, USD/JPY…you get ‘short’ in a currency every time to buy another and the profit is made when you buy-low and sell-high. FOREX market is the largest trading market in the world. It yields an average turnover of $1.9 trillion daily and the figure is nearly 30 times larger than the total volume of equity trades in United States. FOREX trading is very unique as the trades are done between two counterparts via electronic network or telephone connections. There is no centralized location as stocks or futures markets and trades are done around the clock. Everyday FOREX trade begins when the financial centers in Sydney start their day, and moves around the globe to Tokyo, London, and then New York. Traders can always response to the market regardless of the local time. Although FOREX trading involves such a big volume of trades nowadays, it is not made available for the publics until year 1998. In the past, the FOREX market was not offered to small speculators or individual traders due to the large minimum business sizes and extremely strict financial requirements. At that time, only banks, big multi-national cooperation and major currency dealers were able to take advantage of the currency exchange market's extraordinary liquidity and strong trending nature of world's main currency exchange rates. Only until the late 90s, FOREX brokers are allowed to break huge sized inter-bank units into smaller units and offer these units to individual traders like you and me. Nowadays with the rapid growth of Internet and communications technology, FOREX trading has become one of the hottest make-money-at-home-businesses for those who wish to avoid conventional 9-5 day job. As a fact in FOREX trading, FOREX is mainly traded in large international bank. According to Wall Street Journal Europe, 73% of the trade volume is covered by the major ten. Deutsche Bank, topping the table, had covered 17% of the total currency trades; followed by UBS in the second and Citi Group in third; taking 12.5% and 7.5% of the market. Other large financial cooperation in the list is HSBC, Barclays, Merril Lynch, J. P. Morgan Chase, Coldman Sachs, ABN Amro, and Morgan Stanley. For market participants segment, approximately half of the transactions done were strictly between dealers (i.e. Bank, or large currency dealer); others are mainly between dealer and non-financial institutions. To start trading on FOREX, one must first learn how to read FOREX quotes. Foreign exchange quotes are always listed in pairs (e.g. USD/JPY 109.2): the first listed currency is known as the base currency with a constant value of 1 unit; while the currency listed in the second is known as counter. In our given example, USD/JPY 109.2 means a dollar of United States Dollar is equal to 109.2 Japanese Yen. In other words, the quote shows the relative value of one currency compare to the other. It means the value USD had been increased when USD/JPY quote goes up However, a two-sided quote (e.g. EUR/USD 1.2435/1.2440) consisting of a 'bid' and ‘ask’ is often seen. The ‘bid’ price is the price at which you can sell the base currency; while the ‘ask’ price is where you can buy the base currency. The different of ‘bid & ask’ price is commonly known as ‘spread’. In the example of EUR/USD 1.2435/1.2440, this means you can buy 1 Euro Dollar with 1.2440 USD or sell 1 Euro 1.2435. Currency brokers make their profit through these differences of ‘bid & ask’ price and this is how they manage to provide their services to individual investors without charging them commission fees. You don’t need much tools to trade in FOREX market. A computer with Internet access, a funded FOREX account with foreign currency exchange broker, and a trading system should be sufficient to get things started. To reduce the risks of losing money, some basic charting knowledge is as well recommended before you start trading FOREX. FOREX charts assist the investor by providing a visual representation of exchange rate fluctuations. Many variables affect currency exchange rates, such as interest rates, bank policies, geopolitics, and even the time of day may affect exchange rates. As stated by expert FOREX trader Peter Bain, charting is an essential tool in FOREX trading. In his newsletter, he reveals that daily charts, hourly charts, and 15-minute charts are used while trading in FOREX. As quoted from his informative newsletter -- “Daily chart will help you define the overall trend from a position trading point-of-view, and the hourly (one hour) chart will give you a feel for the intraday trend. The 15-minute chart is used for entry and exit – with assistance from the five-minute chart, where price is moving quickly, and you need to be closer to the action.” Being one of the technical method, FOREX charting is based on the principal ‘history repeats itself’. FOREX traders who study charts predict the market future by evaluating past market performance. The time frame used for charting might differs for different traders, some analyze the past one week, some prefer six months analysis, and there are also traders who analyze the market for the past five to ten years before getting involved in a FOREX trade. A huge variety of FOREX charts are available in the market. Some charting methods are very simple, using a few FOREX indicators to show trading direction; other charts may include up to forty indicators and those are mainly for advance traders that are more skillful. MACD Divergence, RSI, RSI range, and price are some of the well-known indicators in charting. As the article is meant for FOREX rookies, you are probably one of those who are looking forward to get involved in the FOREX market. However, there is no shortcut to be success in FOREX trading. Trading in FOREX is not as simple as it seen from outside. Especially there’s margin involved in FOREX trading, you might lose a lot of money in the beginning and learn your lessons in a hard way. Take all the time you need to learn this new trading skill well -- practice everything you learn with a demo account before you consider going 'live' with your own money. Seminars, eBooks, Internet, papers, as well as video courses are all your needs to get involved. I wish you good luck and good profit making in your FOREX trades.
Other Trading System Articles
10 Common Mistakes In Trading I would like to talk about 10 common mistakes in trading. New traders are often unaware of what is required in trading and the bad habits that can lead to financial suicide.1. Under capitalization - One of the first mistake I made when beginning to trade was being under capitalized. I started with a $10K account without any idea on how to ...Water Pollution Problems: A Real Issue Water pollution has always been a major problem to the environment. With industrialization in major areas and urban cities growing the water around them just keeps getting polluted. The sad part about the whole ordeal is that water pollution can be prevented in a lot of cases.A lot of water pollution is caused by factories near rivers a ...Predict Stock Market Tops and Bottoms With The NH-NL Ratio The new high/new low ratio (NH-NL) ratio has been around for many years but different investors use this indicator in different ways. Some investors plot the ratio on a chart using the number zero as a neutral designation with positive numbers equaling more new highs than new lows and a negative number equaling more new lows than new highs base ...A Guide to Forex Trading System There is no other market in the world that can compare itself to the foreign exchange market. With almost USD 2 trillion in daily average the Forex market is bigger than all the stock and bond markets of the entire world. A better way to understand its enormous size would be to compare it with any national stock exchange. Let's use the New York ...Live Reported From the Stock Exchange: GOOG (+23%) - YHOO (-30%) The game continues ...GoogleAt the moment (25th of October) Google’s stock is valued 486.6 and Yahoo 24.5 dollar. In December (2005) the Google / Yahoo share price ratio was about 10, now the ratio increased to 20. Google’s growth is leveraged by two factors: autonomous growth and growth through takeovers. For the autonomous ...Commodity Trading Systems – This Ones Free and Makes Big Gains! Today many traders buy commodity trading systems and spent money on expensive software when really all they need is to do a bit of research on the net and build their own.Here we will show you how to build your own commodity trading system that will help you pile up big gains, even if you have never traded before.First things first ...State Treasuries of Alabama, Kentucky, Illinois, New York and Michigan State treasuries serve as the banks of the state; they also manage the money of the state, and therefore serve a vital role in their overall economic success. Universal among the states of Alabama, Kentucky, Illinois, New York and Michigan is the role of the treasurer and their attitudes on university education. Each department functions to inve ...Forex Day Trading Systems Usually, we associate trading with purchasing a commodity, bringing it home or to our business premises, and then selling it. Similarly, we purchase stocks and shares in the stocks and shares market, hold them until their value increases and then sell them off.Times have changed, and now trading can be done on a daily or even hourly basis ...Trade Entry Techniques Most traders tend to concentrate on pinpointing the perfect entry for a trade. However, in reality the entry price is just one part of the equation. The common entry techniques are:Channel BreakoutsA trend trader will tend to use channel breakouts to enter trades in order to catch a trend when it is beginning. The general ...Forex Signal Trading - What Shoud I Be Looking For? Forex offers many support services for its traders, including Forex signal trading. Either Forex brokers or independent analysts monitor and analyze the market. Signal trading includes identifying trends. They identify these trends in the Forex market by using many varied and subtle indicators. These indicators are used in Forex signal trading t ...High Levels of Radioactivity Found in American Baby Teeth In October 1999, the Radiation and Public Health Project (RPHP) released results of baby teeth examinations in an ongoing study called the "Tooth Fairy Project." These results showed startling levels of radioactive material Strontium-90 (SR-90) in teeth of children born in Southern Florida, New York and New Jersey in the 1980s. The levels were a ...Should You Use a Pareto Chart Unless you are familiar with manufacturing management principles, you probably have not heard of a pareto chart. It is a very effective tool managers use, to manage and effect outcomes in manufacturing environments. You're saying, How in the heck will this help my trading? Well it can, if you use it right.Another name for using pareto cha ...Feel the Gold Rush with Gold Coins A lot of people find collecting gold coins as not only an incredibly interesting hobby but a fairly lucrative one as well! Over time, your collection will accure value and parts of it can be sold if you desire. This way, you will have additional income for yourself later in life in addition to a fantastic collection of valuable coins.1. F ...Evaluation I An insane person cannot evaluate an insane evaluation system.As you know I have been trying to restore sanity to the insane premises Wall Street has been teaching its brokers and you for all these years. Their insanity has become so pervasive that it has become conventional wisdom. The brokerage houses have taught everyone to act insanely ...Traders, Defend Against the Dreaded Death Spiral. It has often been said that there is only two ways to get hurt really bad on a stock trade, getting caught in a "death spiral" by not using DTM: Decisive Trade Management in the way of stop loses and having a stock halted on you. Halts you have zero control over. Death spirals are of your own making if you do not practice the use of stop loses. ...Stocks Trading - Advantages and Disadvantages What is Stocks Trading?Companies throughout the world issue new stock shares every day. They do so to raise capital in order to invest in the business. Once stock shares have been issued the public is free to buy and sell those issues through a stock broker. As the supply and demand for the shares changes so too does the price. ...How to Get a Lower Blood Pressure Using Medical Treatment The treatment for lowering the blood pressure is usually recommend by physicians for patients with a blood pressure of above 160/95mmHg. For those with a blood pressure immediately bellow these values it is taking into account age, sex or other individual factors of the patients before taking the treatment.The first kind of treatment reco ...What is Expectancy? I have been watching as a several people on a forum discuss, argue and lend their ideas about entry techniques. They are going crazy over what the proper entry should be and why one chart pattern is better than the other. One person has even said how they purchased massive amounts of software to help them enter the market. Now don’t get me wrong ...An Introduction to Forex Trading Foreign Exchange or FOREX Trading has existed for as long as merchants ventured to new lands hundreds of years ago and traded with their counterparts.It is only since the latter part of the 20th and the beginning of the 21st century that faster and more efficient ways of trading via the Internet have evolved.Forex trading online ca ...B2B Connections With One of the Planet's Biggest Markets Alibaba.com is a Hong Kong based online business-to-business commerce and auction company that has developed into a substantial resource for both Asian businesses and Western corporations. Originally designed to connect Chinese businessmen with Western buyers, Alibaba manages a bilingual format that both Chinese businessmen and English speaking ...Forex Trading – The Six Major Reasons Traders Lose Money In FOREX trading, there are six major reasons traders lose money. If you can avoid these pitfalls then you can join the minority of winners that pile up the big profits consistently.Here are the trading traps that will cause you to lose money:1. The Contrarian’s DiseaseYou should have a contrary opinion to the other Forex tr ...The Traders Secret Art of Setting Stop Losses - Guaranteed To Boost Profits When traders first begin considering their stop losses, keep in mind this comment from Tom Baldwin, a leading day-trader. He said, “The best traders have no ego.”Successful traders are faced with losses constantly, and they swallow their pride and get out of the position when they have to. This allows traders to survive in the market long ...Planning for Success - Part 2 If you're a coach, student coach, business owner or someone with a desire to get into business, take careful note of the powerful tips and development strategies presented within this series and GET READY to make the leap to ultimate success.Plan for Success For the purposes of the Business Development Program, we assume that ...Understanding Emissions Trading and Global Warming It goes without saying that there is often an inherent conflict between science and economies. Emission trading is an interesting effort in the global warming arena.Understanding Emissions Trading and Global WarmingIt is a mild understatement to say that global warming is both a controversial and misunderstood field. As the decay o ...Women Abuse and what Affect Patriarchy has on it In the basic of the traditional system of education and socialization of a gender there is a so called initial work distribution between men and women. This work distribution has defined completely different conditions for life of men and women. It gave men the right to external activity for world survey and its governance, thus he received a ...
|
