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Nov 25 2009
You probably know some basic information on forex trading, but if you want to start your own forex business, you will need to know more. This article is devoted to the most essential things you need to know about forex trading on your first stage towards forex success.
The forex market is based on the currency exchange, or currency trade. The value of a currency is defined in correspondence with any other currency, and they are traded according to their respective values.
The forex market is very special because it involves traders from all over the world and there is no institution which regulates it as a whole. There is no even a place where the forex market is situated – everything is based on the free trade. Every country that participates in the forex trading defines an institution that is responsible for regulating the forex traders, but these regulations mustn’t contradict the main principles of forex trading. What actually rules and moves the forex market are its unwritten internal laws and people who trade in it.
The size of the forex market is truly impressive – nearly two trillion dollars circulate in it every day! It is open twenty four hours a day (except Saturday) and you can enter it any time you wish. The forex is extremely fast – the tendencies change fast, the transactions are performed within seconds, and any information can be received any time. You don’t have to adjust your timetable to the forex market, instead you have a possibility to enter the trade at any convenient time.
It is a surprise to some people that the forex market was created in 1997, and at that time the situation in it was completely different. The market has gone through enormous changes, which resulted in what we can see nowadays. At the beginning the market was not so large and free. It was created for big companies, and the entry requirements were extremely strict. People like you and me didn’t even dream of participating in it. But the times change, and over a comparatively short period of time the forex market has become available to the vast majority of people. You can start your forex business even right now if you have at least one hundred dollars. There are no limitations in the amount of money you can earn, and there are no limitations as to the type of people who can trade. Any person of any age and occupation is capable of mastering the forex trading and becoming a real expert.
In spite of the popular opinion, the forex market is not a very easy place to make money, and you will have to make considerable effort for this, but you can be sure that your effort will be rewarded.
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Nov 25 2009
FOREX trading refers to an international, 24/7, over the counter, exchange market where currencies of different nations are bought and sold. Trading is always done in pairs assuming the price of currency bought to go up and that sold to fall down. It is the largest liquid financial market making it impossible for any single investor to influence the prices of currencies.
There are two kinds of FOREX investing strategies:
TECHNICAL ANALYSIS
FUNDAMENTAL ANALYSIS
TECHNICAL ANALYSIS:
Technical analysis is mostly undertaken by small and medium size investors.
A technical analysis considers factors that are actually affecting the market rather than factors that can affect it. Thus the price quoted reflects all the factors that have influenced it. Only market generated facts and figures are taken into account and factors like fear, hope, expectations or other changes are not considered. Thus the analysis is generally based on these suppositions:
• Price reflects all actual market movements. That means price includes everything known to the market like supply and demand of foreign exchange, political factors, trade agreements etc. It is not concerned with what resulted in change rather deals with actual changes. It works on the assumption that price can take only one of the three directions:
? Upward
? downward
? sideward
• It rest on those market patterns that have been identified as significant. That means those factors which are repetitive in nature or will produce desired results.
• History always repeats itself as human psychology changes very slowly with time. That is market movements are predictable.
VARIOUS TECHNICAL INDICATORS ARE:
1. RELATIVE STRENGTH INDEX:
It takes into account the ratio of upward and downward movements in index and expresses it in the range of zero to hundred.
2.CHARTS:
Charts include various hills, slopes, curves that develop on a chart over a time and reflect some major and minor changes in pattern. Some of the chart formations include:
• TRIANGLE
• RECTANGLE
• HEAD AND SHOULDERS
• DOUBLE TOP AND BOTTOM
• SAUCERS
• V
3.GAPS:
A gap represents area on a bar chart where no trading took place.
• UPGAP: it is formed when the lowest price on a particular day is more than the highest price of previous day.
• DOWNGAP: it is formed when highest price of a certain day is less than the lowest price on previous day.
NUMBERS:
Various number theories are used in technical analysis like:
• Fibonacci theory
• GANN
STOCHASTIC OSCILLATOR:
This indicates the overbought or/and undersold condition. It uses a scale of zero to hundred percent.
FUNDAMENTAL ANALYSIS:
It is the one where current economic, political, financial situation of the country of currency is studied. A country’s economical and political condition depends upon many factors like the interest rate, unemployment level, exports and imports, per capita income, percentage of population living above and below the poverty line, inflation, trade relations with other countries, tax policies etc.
A fundamental analyst studies and evaluates all these factors before coming to any decision. Thus it helps in long tem decision making and making profits in short term by extra ordinary developments.
Some of the indicators that help in fundamental analysis include:
1. GROSS DOMESTIC PRODUCT:
It reflects total market value of all the goods and services produced in a country during a given year.
2. RETAIL SALES:
This reflects total receipts by all the retail stores in a country.
3. CONSUMER PRICE INDEX:
It reflects change in prices of consumer goods.
4. BUSINESS CYCLE:
It reflects various phases through which a business passes. These phases include:
• EXPANSION
• PEAK
• RECESSION
• DEPRESSION
5. MONETRY POLICY:
It controls the supply of money in an economy.
Trading successfully needs knowledge, time and understanding of a market. You cannot earn continuously in a Forex market due to its volatile nature. Thus as a trader you should try to consider both technical and fundamental strategies of forex trading and make decision based on market expectations and trends. Try trading with money that you can afford to loose without any regrets. Trade with logic and if you are not sure quit and take rest for some time.
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Nov 25 2009
Forex trading is for everybody who would like to make money. If you want to find your place and cannot you should take into consideration the fact that with the help of forex market it is possible not just earn your living but make a fortune. However it is not as easy to do as it may seem from the first sight. That is why, you should take into consideration some facts before you make your final decision. There have been written a lot about forex trading market and the aspects that may influence the trade and your success when trading. If you would like to figure everything out by yourself you should understand that without careful and detailed analysis it is impossible to do. That is why you should first of all take into consideration all the aspects and only after that you will be able to make your final decision.
You have probably heard a lot about stick market and the opportunities that it offers. It is one of the most popular markets in the world as there are numerous investors and a great sum of money. The main concept of the stock market is to buy the shares in a hope that their prices will go up and you will be bale to sell them and to make profit in such a way. Stock market is extremely popular because it is always observed in the news and many people trade there.
Forex market to the contrary deals not with shares but with currencies. It is an exchange market where people buy and sell currencies. It is one of the most popular trading markets in the world too. With the help of forex market people get more chances to make money because they trade currencies which fluctuate a lot in their prices and with the help of which it is possible to make small but reliable profit. You have to figure out in what currency rated you would like to trade and to start. Of course there are some aspects which you nee ??? take into consideration and to pay your special attention to but there is no need to have any college education as a person with average knowledge can achieve a lot.
It is up to you what to choose and with the help of what to make your living. However you need to understand that with the help of forex market you will be able to make a lot of money. What is more, the forex market gives a lot of other benefits. You can divide your working time as you like, there is no need to spend hours trading – sometimes it is enough 30 minutes a day.
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Nov 25 2009
Do you want to be rich? Certainly, you want. Do you want to be rich and do not go to work every day? Well, this is probably everybody’s dream. Do you want to have steady income and be your own boss? This is possible with forex!
What is forex? This is the biggest financial market in the world. It has no certain place. It is everywhere. There are market participants who trade and exchange foreign currencies. If 20 years ago those market participants were huge banks, large corporations and rich individuals, now forex is full of ordinary people. Some of these people are not rich at all. Sometimes, $200 they invested in forex is all they have.
Forex is a dangerous market. Sure, it is safe for professionals who know everything about forex. But sometimes even professionals lose big money. Anyway, forex is dangerous mostly for amateurs, who want to become rich in a week.
What is the main reason why 90% of traders fail? Well, this is disregard of forex psychology. What is forex psychology? You will not find this science lectured in the universities. This is a special applied science.
Forex psychology investigates mistakes and psychological conditions of traders. Forex psychology is a science that teaches traders to win. You need to believe in success and choose the right behavior. Many amateurs are very optimistic but they are psychologically unprepared to trade in forex and to deal with big money. Sometimes even housewives want to become forex traders, although they could not smartly manage $100 in their wallet.
Forex psychology is something that all traders should know. Even if you are the most experienced trader in the market you can lose because of psychological reasons. Sometimes, it happens that a trader who possesses much knowledge loses in forex. It happens because he was unable to control his emotions.
When you are not able to control your emotions you are not able to make reasonable decisions. For example, you know that according to your strategy you need to leave the market. But you see that there is so much money there. You decide to stay and take a risk. You lose because you made a decision based on your emotions.
Many traders became victims of their greediness. Greed makes even the best traders lose big money. It is really difficult to stand the temptation of risking your money in order to win really big amounts.
Forex psychology is to be learned by all traders since this science is very important to become a true winner.
If you do not want to repeat mistakes of 90% of traders you need to look for information on psychology of a forex trader which is available on the Internet.
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Nov 25 2009
In a rapidly changing world there appear new ways of earning money. Unfortunately, some of them are illegal. But still, most new ways of making money are 100% legal. Our life is changing and now something that was since fiction is reality.
There are not many ways to earn money without leaving your home. Online or home business is really popular with different people. Millions of the US citizens are engaged in online business which proved very effective and profitable.
One of such online ways of earning money is trading in forex. In early 1990s forex was a market for the big players only. It means that only big banks and investment firms could participate in it and trade foreign currencies. Now, with the development of network technologies it became possible to trade in forex for every individual who has a computer with Internet connection and some money to invest.
You can see so much forex advertising everywhere. No wonder. Brokers are interested in attraction of more people to forex since this is how they earn money. Forex became very accessible. Even the most stupid person can enter the forex market. Sure, trading does not necessarily means earning money.
For about 90% of traders trading in forex means losing money. This is a fact, although such stats are really sad. But there is nothing strange in this fact. Amateur traders come to forex unprepared. Moreover, some of them have no idea of what forex is and how they can earn money. They view it as a casino or Russian roulette. Forex is not a place to gamble.
Amateur traders usually make too many mistakes to survive in the changeable forex market. As known, forex likes professionals who in their turn respect forex market. Amateurs have no respect for forex since they are playing according to their own rules which have nothing to do with forex realities.
Knowledge and experience can make you rich in forex. Sure, in order to win big money you need to risk big money. You should not set unrealistic goals. If you came to forex with $200 and you want to have $2,000 in a week, you will never reach such a goal. Of course, lucky things happen and you can win once or twice without being a professional. But eventually you will lose.
It happens that people bring their life saving to forex hoping to double their capital. This is one of the most serious mistakes to be made in forex. Do not risk money you cannot live without. Trade in forex cautiously and so that even if you lose you can live normally. Do not expect yourself to be the luckiest trader on earth. You are not!
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