Forexunderstanding

Foreign exchange (forex) currency trading, the largest financial market in the world, requires a minimum of capital to invest and the profits can be substantial. Once you have learned the basics of forex, youre on the way to making money through the simultaneous buying or selling of currencies. Forex trading is instantaneous; as soon as you click the mouse, its done. The most commonly traded currencies, easiest to liquidate, are the U.S. pound, Japanese yen, British pound, Swiss Franc, the Canadian pound, Australian pound, and the Europound.

Unlike the stock market, forex trading has no central exchange. With forex, you can make a profit whether the market is up or down vs. only making money when the stock market is on the rise. By taking the long position with a pair of currencies, the forex trader buys at one price and sells when it reaches a higher price. The other option for the forex trader is to go short by selling currencies, anticipating depreciation, and then buying back when the value falls. The forex trader can pick either direction, long or short, and if correct, he will generate a profit. You can also set up a certain point (limit order) based on the amount of profit you want to earn to automatically limit the order. In the same way, you can stop or close an order to automatically liquidate if the currency trade is going against you.

In general, the strength of a countrys economy determines the value of its currency. Other factors to take into consideration in forex trading are the political and social status of the country, interest and employment rates, and the overall stability of its government. You will learn to see patterns or trends as you become more familiar with the ins and outs of forex trading.

The Forex market is a 24-hour trading place, Sunday through Friday, giving you the option of trading at any time of the day or night. Unlike the stock market, it doesnt close with the ringing of the bell. Forex online firms provide demos, guidance, and market news for the beginning investor. You can practice your skills in forex trading before actually investing real capital. Once youve learned the basics, a minimum investment is made, sometimes as low as 200.00. These mini-trading accounts are a good way to begin forex trading and often there is no commission attached to your trading. You dont have to be a seasoned market analyst or economist to learn, enjoy, and make money with forex currency trading.

There are many money-making opportunities out there and weve been involved with quite a few, namely property marketing, web development, residential construction security, multi-level marketing businesses etc.

Weve come to a few conclusions with the help of some well-known properity coaches.

Often people with the income they desire dont have the time to enjoy it. Those that have time dont often have money. You dont have to sacrifice your life-style to earn an above-average income. If you focus on the Forex for a few months you can make that dream a reality and create time and money to do what you REALLY want.

To earn a living money is given in exchange for a product or service rendered. It needs to be sold continuously otherwise your income stops abruptly unless its a repeat type of product or service.

Money is a medium of exchange. Theres no magical formula to possess it, you need to exchange something of value for it.

What if, you could have access to thousands of customers who are ready, willing and able to buy from you whenever you wanted? Wouldnt it be great to avoid any hassles like money collection problems (just had a delayed payment from my web business), keeping difficult customers happy (we all know what thats like), competition stealing your business without providing the same value etc.

All that is possible with Forex. You can also trade from anywhere. Take your laptop with you, find an internet connection and away you go.

Another advantage is that you dont need experience to get started. Get a traditionally job involves accumulating specialized experience, having a well-polished resume and having the right contacts. With the right training course, you can get started straight away.

Heres 7 more reasons to trade Forex:

1.It never closes. Its open around the clock, worldwide. Trading positions open at Monday 7am, New Zealand time and close 5pm New York time on Friday. During this time, you can enter or exit the market whenever you like. Its a continuous electronic currency exchange. This is great because you can trade whenever you have spare time.
2.Leverage. Standard 100 000 currency lots can be traded with as little as 1000. This is mainly because of the ease with which you can buy and sell, some brokers will leverage up to 200 times, so with 100 you can control a 200 000 unit currency position. Its the best use of trading capital around, even banks lending on property investments dont come close.
3.Accurately predict the outcomes. Currency prices generally repeat themselves in predictable cycles so you can see what the trends are. Technical Analysis helps to see these trends and profit from them.
4.Low Transaction Cost. In other words, you mistakes wont cost you a fortune. Good brokers won charge commissions to trade or maintain an account even if you have a mini account and trade small volumes.
5.Unlimited Earning Potential. Forex has a daily trading volume of over 1.5 trillion, the largest financial market in the world. It dwarfs the equities market (50 billion daily) and the futures market (30 billion).
6.You can make money in any market conditions. Each market is one currency against another, so when you buy in one, youre selling in another so theres no biase towards either currency moving up or down. This means its up to you to choose which currency to buy or sell with. Yu can make money going up or down.
7.Market transparency. This is an advantage in any business or trading environment. It means you can manage risk and execute orders within seconds. Its highly efficient and allows you to avoid unexpected surprises.

I hope youre now convinced that Forex is the best investment and income opportunity around.

To continue your journey of Forex Trading success and achieve enormous profits, visit http:www.wealthyforex.com . Youll receive all of the resources you need to positively impact your future.

Several companies offer automated forex broker services. In the following articles, you’ll find brief reviews of each.

What forex brokers offer automated services?

GFT Forex is an automated forex broker, whose DealBook FX 2 software offers the investor both a demo and a live forex trading tool in the currency market. This forex trading software offers the investor direct access to some of the tightest spreads, through a stable, standalone forex trading platform, 24 hours a day.

The DealBook FX 2 software shows live, dealable prices, real time data, free real time world and financial news, forex charts, more than 65 technical indicators, and the ability to build the investors own indicators.

GCI Financial Ltd., another automated forex broker, provides trading software that tracks real time prices in 20 major currencies, live charts, and real time profit and loss account tracking. The software is offered as a demo also. Market orders are confirmed within seconds at prices clicked on or accepted by the client.

The FX3K is an online automated dealing and trading platform used by automated forex brokers. The FX3K online trading environment includes real time quotes, charting, technical analysis tools, and news. FX3K integrates the client, dealer, back office and system administrator functions. Product features include high speed execution of client orders and the ability to monitor real time margin availability, net exposure and profit and loss on all open positions. FX3K has chat options to allow trader-dealer conversations.

The COESfx Level 1 Trading Platform is used by automated forex broker as an Electronic Currency Network for the execution of best prices for buyers and sellers of foreign exchange. It offers traders live and executable prices, thereby making each participant a market maker. Traders gain access to “best bidbest offer quotes directly from price providers and other traders. COESfx pricing is derived from a number of partners in the network such as banks, Futures Commission Merchants (FCMs), Introducing Brokers (IBs), fund managers and other traders on its Electronic Currency Network.

How To Start Trading The Forex Market? (Part 5)

What are *PIPS* ?

Currencies are traded on a price point (pip) system. Each currency pair has its own pip value.

When you see a FOREX price quote, you’ll see something listed like this:

EURUSD 1.221013

Explanation:

a) If you want to BUY the EURUSD ( meaning you BUY EUROS and SELL US ) you buy 100,000 EUROS and you SELL 122,130 US, or in other words you receive
122,130 US for 100,000 EUROS.

B) If you want to SELL the EURUSD ( meaning you SELL EUROS and BUY US ) you buy 122,100 US and sell 100,000 EUROS, or in other words you receive 100,000 EUROS for 122,100 US.

The difference between the bid and the ask price is referred to as the spread. In the example above, the spread is 3 or 3 pips.

Since the US pound is the centerpiece of the FOREX market, it is normally considered the ‘base’ currency for quotes. In the “Majors”, this includes USDJPY, USDCHF and USDCAD. For these currencies and many others, quotes are expressed as a unit of 1 USD per the second currency quoted in the pair.

For example a quote of USDCHF 1.3000 means that fore one U.S. pound you receive 1.30 Swiss Francs. or in other words, you receive 1.30 Swiss Franc for each 1 US.

When the U.S. pound is the base unit and a currency quote goes up, it means the pound has appreciated in value and the other currency has weakened. If the USDCHF quote above increases to 1.3050 the pound is stronger because it will now buy more Swiss Franc than before.

The three exceptions to this rule are the British pound (GBP), the Australian pound (AUD) and the Euro (EUR). In these cases, you might see a quote such as EURUSD 1.2080, meaning that for EURO you receive 1.2080 U.S. pounds.

In these three currency pairs, where the U.S. pound is not the base rate, a rising quote means a weakening pound, as it now takes more U.S. pounds to equal one Euro, British pound or an Australian pound.

In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.

Currency pairs that do not involve the U.S. pound are called cross currencies, but the calculation is the same. For example, a quote of EURJPY 134.50 signifies that one Euro is equal to 134.50 Japanese yen.

HOW TO BUY ( going LONG )and SELL ( going SHORT ) in the FOREX Market?

Keep in mind 2 very important rules:

RULE # 1) Cut your LOOSING trades and let your WINNING trades RUN

YOU WILL HAVE LOSING TRADES. Every FOREX trader has. The secret is, that a consistent, disciplined trader, at the end of the day, adds up more winning trades than losing trades.

When you and see on your charts, without any doubt, that you are in a losing trade, don’t keep losing money. Most of the novice traders are lowering their stop loss just to prove they are right or hoping that the market will reverse. 99% of these trades, are ending up with more losses. Most of the profitable trades are usually “right” immediately.

Remember, smart traders know there are many other opportunities. CUT your losses short and compound those winning positions.

RULE 2) NEVER EVER trade FOREX without placing a Stop Loss Order.

PLACE a STOP order, right along with your ENTRY order, via your online trading station, to prevent potential losses.

Before initiating any trade, you have to calculate at what point ( price) you would be wrong, because the market changed direction, and would want to cut your losses.

To make profits, in the FOREX, a trader can enter the market with a *buy position* (known as going “long”) or a *sell position* (known as going “short”).

As an example let’s assume you’ve been studying the EURO. The EURO is paired first with the U.S. pound or USD.

Your trading methods, rules, strategies, etc., tell you that the EURO will rice in the next 2 weeks, So you buy the EURUSD pair meaning you will simultaneously buy EUROS, and SELL pounds).

You open up your excellent trading station software (provided to you for free by Fenix Capital Management, LLC www.fenixcapitalmanagement.com ) and you see that the EURUSD pair is trading at:

EURUSD: 1.20101.2013

As you you believe that the market price for the EURUSD pair will go higher, you will enter a *buy position* in the market.

As an example, lets say you bought one lot EURUSD at 1.2013. As long as you sell back the pair at a higher price, then you make money.

To illustrate a typical FX SELL trade, consider this scenario involving the USDJPY currency pair:

REMEMBER Selling (“going short”) the currency pair implies selling the first, base currency, and buying the second, quote currency. You sell the currency pair if you believe the base currency (USD) will go down relative to the quote currency (JPY), or equivalently, that the quote currency (JPY) will go up relative to the base currency (USD).

HOW TO CALCULATE PROFIT OR LOSS?

The Profit Calculations, on the Short-sell trade scenario below, may seem somewhat complicated if you’ve never been in the FOREX market before, but this process is continually calculated through your broker trade station (software). I show you this process below so you can SEE how a PROFIT might occur.

The current bidask price for USDJPY is 107.50107.54, meaning you can buy 1 US for 107.54 YEN, or sell 1 US for 107.50 YEN.

Suppose you think that the US pound (USD) is overvalued against the YEN (JPY). To execute this strategy, you would sell pounds (simultaneously buying YEN), and then wait for the exchange rate to rise.

Your trade would be the following: you sell 1 lot USD (US 100,000) and you buy 1 lot JPY (10,754.000 YEN). (Remember, at 0.25 % margin, your initial margin deposit for this trade would be 250.)

As you expected, USDJPY falls to 106.50106.54, meaning you can now buy 1 US for 106.54 Japanese YEN or sell 1 US for 106.50.

Since you’re short pounds (and are long YEN), you must now buy pounds and sell back the YEN to realize any profit.

You buy US 100,000 at the current USDJPY rate of 106.54, and receive 10,654,000 YEN. Since you originally bought (paid for) 10,754,000 YEN, your profit is 100,000 YEN.

To calculate your P&L in terms of US pounds, divide 100,000 by the current USDJPY rate of 106.54

Total profit = US 938.61