Seven Come Leverage-7 Reasons Why Forex Is a Superior Trading Arena for Individuals

Over the last decade or so, the Foreign Currency Exchange markets and trading platforms have become a superior arena for active individual investors. Trading world currencies for the difference in exchange rates can be a lucrative hobby and a very satisfying lifestyle. Following are some points to ponder when comparing the Forex market with stocks, bonds, commodities and mutual funds.

1. Liquidity

An average day in the Forex market sees approximately 1.9 trillion US dollars worth of trade. Almost every country in the world has institutional and individual traders who are active and have a personal interest in this largest of commodities. Over 7000 international banks and small and large speculators make up the largest market in the world.

2. Leverage

Leverage is the use of a tool to influence the directional trend of a mass that would otherwise be much more difficult to control, if not impossible. Previously only master traders with a $100 million account had access to the inter-bank currency exchange.

With the recent enormous international growth this market is now open to the home computer. Individual traders now have the same leverage guarantees that international banks have had for years. A very small amount of money can be used to control a very large contract of foreign currency. Up to 200:1 leverage is available, and higher in some cases. This means $1000 can be used to hold $200,000 worth of another currency, with a large account.

3. Brokers

As a trader gains experience, a full service paid broker is no longer necessary. All trades can be initiated and terminated from the trader's choice of office. The home office needs high speed internet, a telephone line, and a computer. Location is only limited to these requirements. The Forex market is operated online by several hundred large banks processing trades of governments and large companies, and has no real central location.

4. Software

A number of free software applications are offered by brokerage houses specifically written for the average home computer. The greater power the computer has will naturally offer more local speed, but most current computers will work fine. These programs offer real-time charting, several dozen indicators, live price feed, or a minimal 10 second delay, and the capability to sell and buy currency pairs immediately online.

Software programs costing $2000 and up are available with advanced features, but are not necessary for the beginning trader. More complicated software may only increase the education period, and hinder time better spent learning trading strategies.

5. Hours of Trading

The Forex market is truly global, trading 24 hours a day every day. Short periods during the weekend have slower activity, but with time differences around the world, these periods are minimal. The Asian market opens Sunday evening in North American time, and all markets run continuously until Friday afternoon. Someone is actively trading somewhere virtually round the clock.

6. Live Practice

Most brokers offer a free demo version of their live software, easily downloaded and installed. No account deposit is needed. The programs work exactly like the real versions, with buy/sell capability, real-time data updates; a realistic $50,000 account with active profit and loss; open, pending and closed trades; and actual stop, limit and market trades. The trader can practice trading tactics until confident and successful.

7. Initial Investment

Recent developments now allow a minimum account deposit of US$250. This mini-account offers lower leverage, but also lower profit and loss. Once a broker learns to trade profitably, this can easily be built into a larger and fully leveraged account.

A minimal $300 investment can realistically be compounded into a $30,000 account in six months, with access to proper training. Brokers naturally offer conservative training courses, so the trader should look elsewhere for more advanced mentoring. Much training is available on the internet, and a website called Precise4XSuccess.com offers access to cutting-edge successful strategies developed by a mathematician. Not all successful strategies are made public. Do your due diligence to find the methods that work for you.

8-45. This article promised to stop at seven, but there are at least several dozen more reasons why the individual speculator might consider foreign currency trading. It is a lucrative, fascinating and very rewarding occupation that can be done almost anywhere and any time you choose to trade.

Good trading, Kelly Archibald.

Kelly Archibald is a lifelong student of precise trading strategies and internet marketing. Go to his website www.precise4xsuccess.com now for the free e-book Forex Freedom and access to many more valuable tools.

Forex Trading History

In 1967, a Chicago bank refused a loan in pound sterling ? sought by a college professor by the name of Milton Friedman. He had intended to use the funds to short the British currency. Mr. Friedman had perceived sterling to be priced too high against the dollar, and wanted to sell the currency, then later buy it back to repay the bank after the currency declined, thus pocketing a quick profit. This is what's known as 'Selling Short'. The bank's refusal to grant the loan was due to the Bretton Woods Agreement, established twenty years earlier, which fixed national currencies against the dollar, and set the dollar at a rate of $35 per ounce of gold. The Bretton Woods Agreement, set up in 1944, aimed at installing international monetary stability by preventing money from fleeing across national borders, and restricting speculation in the world currencies. Prior to the Agreement, the gold exchange standard--prevailing between 1876 and World War I--dominated the international economic system. Under the gold standard, currencies gained a new phase of stability as they were backed by the price of gold. It abolished the arbitrary practice used by kings and dictators of arbitrarily debasing money and triggering inflation. But the gold standard wasn't without faults. As an economy strengthened, its imports would heavily increase until it ran down the gold reserves required to back its money. This would cause the money supply to shrink, interest rates would rise and economic activity could slow to the extent of recession. Eventually, prices of goods had to hit bottom, and become attractive to other nations, which would rush into buying frenzies that injected the economy with gold until it increased its money supply, thus driving down interest rates and recreating wealth in the economy. Such boom-bust patterns prevailed throughout the gold standard until the outbreak of World War I interrupted trade flows and the free movement of gold. This of course was followed by 'The Great Depression', which arguably was ended by World War II. After the Wars, the Bretton Woods Agreement was established, whereby participating countries agreed to try and maintain the value of their currency with a narrow margin against the dollar and a corresponding rate of gold as needed. Governments were prohibited from devaluing their currencies to their trade advantage and were only allowed to do so for changes of less than 10%. Through the 1950s, the ever-expanding volume of world-wide trade led to massive capital transfers generated by post-war construction. This destabilized foreign exchange rates that had been set up in The Bretton Woods Agreement. The Bretton Woods Agreement was finally abandoned in 1971, and the gold window was closed on the US dollar. By 1973, currencies of major industrialized nations became more freely floating, mainly controlled by forces of supply and demand acting in the foreign exchange market. Prices were floated daily, with volumes, speed and price volatility increasing through the 1970s These fluctuations gave rise to new financial instruments, market deregulation and trade liberalization. Beginning in the 1980s, international capital movements accelerated with the explosion of computer technology and high speed communications. The world wide markets became virtual 'local market' through Asian, European and American time zones. Transactions in FOREX zoomed from about $70 billion a day in the 1980s, to more than $1.5 trillion a day two decades later. THE EUROMARKET A major catalyst to the increase in foreign exchange trading was the rapid development of the Eurodollar market, where US dollars are deposited in banks outside the US. Similarly, Euro markets are those where assets are deposited outside the currency of origin. In the 1950s Russia's oil revenues-- all in dollars -- were deposited outside the US in fear of being frozen by US regulators. This gave rise to a vast offshore pool of dollars outside the control of US authorities with the attendant creation of The Eurodollar market. The US government imposed laws to restrict dollar lending to foreigners. Euro markets were particularly attractive because they had far fewer regulations and offered higher yields. From the late 1980s onwards, US companies began to borrow offshore, finding Euro markets an advantageous center for holding excess liquidity, providing short-term loans and financing imports and exports. London was the principal offshore market, as it remains even now. In the 1980s, it became the key center in the Eurodollar market when British banks began lending dollars as an alternative to pounds. This allowed them to maintain their leading position in global finance. London's convenient geographical (Time Zone) location (operating during Asian, Pacific and American markets) is also instrumental in preserving its dominance in the Euromarket.

Copyright ? C. R. Ellsworth 2006

C. R. Ellsworth is retired and living in the 'Great North Woods'.
He's been involved in Marketing since 2000.
Forex Trading History I Work 4 U

Forex, an alternative investment vehicle, Part 2

In the first part of this article I have outlined 10 good reasons why Forex (Foreign Currency Exchange Market) is an excellent investment opportunity for anyone to make money, online, even with very little start-up money available. In this part I will explain how to get started.

If you want to make money with Forex, online, you have to think of it as a business and treat it as such. You have to get serious about it and you need to get organised. Initially, you have to 'go to work' just like you would in a conventional business. Set aside some quite, work hours for yourself, in a quite corner of your house so you can concentrate on your business without any interruptions.

Also, as with any other business or trade, you have to train yourself and hone your skills, continuously. The Forex offers an amazing opportunity to make money, with little effort in record time, however, you have to know what you are doing and you do have to put in some work. Just as you would not allow your 10 year old kid to drive your fancy, expensive car, it would not be a good idea for you to jump into trading the Forex without learning how to drive this 'vehicle'.

If you are a beginner spend some time on reading up on the Forex and perhaps find someone who is already trading successfully. Ask them to mentor you or allow you to look over their shoulder. Once you have some idea on what makes Forex tick, you should open a demo account with one of the many reputable online brokers. This is the best way to learn what happens to your money and your account in the real world without actually risking any of it. You also have to develop good record keeping habits. It's not a hard job to do it, you just have to be disciplined enough to keep up with it. Again, it's no different from a normal business except that the rewards can be much, much higher in relation to the work you have to put in and of course you can do it from anywhere as long as you have access to the Internet.

So, here is a simple list of how to get started: 1) Setup a quite corner for yourself as a work-area, 2) You must have a reliable computer and reliable connection to the Internet, if you can afford a second connection to the Internet with a different service provider than it's even better (I'll explain why in a future article). Also make sure you are comfortable and have plenty of light, a dingy, dark corner will soon dampen you enthusiasm, 3) Set aside some 'quality' time for you business the same time, every day in the beginning, you can spend less time as you get more experienced, 4) Find out more about how the Forex works, train yourself and find a mentor who is already trading successfully, 5) Open a demo account with a reputable online broker, 6) Start keeping a record of everything that you do and why you do it. The easiest way I found to do this is with a simple Excel Sheet(c) or something similar, 7) Analyse the results of your actions and see how they affect the balance of your demo account, 8) Make backups of all your records, I can't emphasis this enough, it's really, really important, 9) Revise your actions and record keeping methods then go back to step 4.

It may sound a lot, however, most of it is common sense and applicable to any and all businesses. It is critical that you keep a record of everything that you do, whether it's changing your chair or the lighting, a new trading platform. Whatever you do make sure you have a record for it and an indication of how, if at all, it has affected your trading ability. I have records of everything I do, not just for Forex, but for all of my other businesses going back 7 years! Now, that's a lot of record keeping but with computers it's real easy.

I think we have covered a lot in this second part. I'll go into more details in future articles. Meanwhile, go through this article and start putting my suggestion in to action. If you have any questions about what I've said above or need information on anything related, just refer to the resources and links at the end of this article.

Wishing you success, Ference

Ference is fanatic about currency trading and teaching others about this amazing opportunity. Contact him at ference_kish@yahoo.co.nz or visit his site at http://www.forexguys.com

Forex Currency Day Trading for beginners.

You sell your money to the bank (or other) and it allocates some interest payments to your savings account from its profits. Have you seen a Bank's profits?

What do Banks do with your money? Well, they accumulate many small savers' money to lend to a borrower. The borrower buys his loan and repays it with added interest. The difference between interest rates is used by the institutions to pay salaries, pensions buy buildings and the usual business expenses.

THE WORLD PRESS occasionally reveals. "INSIDER DEALINGS" where an individual is accused of amassing huge profits from a fast book financial transaction that proves to be illegal.

Sandwiched between "INSIDER TRADING" and interest are a range of products on sale by banks. Mortgages, shares bonds and so on . Very rich individuals and organizations do not leave all their wealth in savings accounts. They trade in art. gold, diamonds, huge properties huge film productions, rare cars and such. Some buy and sell consumer items such as coffee, tea etc.

So can individuals with a few hundreds of their own currency hope to buy and sell something for a smiling profit? There's eBay. Antiques. Some gamble on a wide variety of events such as roulette, horse racing etc. On-line poker (5m PC users play every day)

Now revealed. There is a legal ethical place where you take profits and not interest. You buy and sell without taking delivery. It's far from the bottom layer of the sandwich, situated above shares. It's Foreign Currency.

Forex attracts about 2 trillion dollars a day in transactions. Someone may tell you that this makes dealings in shares small fry. Forex used to be the exclusive realm of the world banks, but computerization replaced old style traders. Banks fund Forex Trading rooms, worldwide.

Immediately, the reader identifies with a PC. Your machine may be capable of earning you a tiny, tiny part of the 2 trillion dollars. You may start with just a few hundred dollars of your own currency, but you essentially need some education, Powerful information to enable you to trade like a professional. You, buy and sell money?

How can there be a risk if you buy something and don't sell it, until there's a higher price? Forex systems eke out patterns of transactions, perhaps following the big loaves, expecting a crumb. Stories of $300 becoming $30,000 within a year: have you heard them? Banks make profits because they trade from especially designed rooms.

You do not need a degree in maths, experience or qualifications to make money 24/7 from anywhere in the world. Forex Day Trading is legal, ethical, exciting and profitable long term. A simple technique at the roulette wheel explains - the pattern is red, black, red, black - what would you choose next? That the pattern continues or is likely to finish? Make a decision and wait for that pattern to appear on any table's display, then act.

Whilst you may take the banks interest in one hand, the staff are elsewhere making huge profits.

A special gift - "Forex Freedom" pdf ebook at Profitable Information

Mike has been employed by financial institutions in the City with experience of mortgages, savings, insurance and reinsurance with a LLoyds of London Syndicate. He is a national IT education prize winner and is qualified with an Advanced Professional Diploma in Business Innovation. Many regard Mike as a blank-page expert. He is the first person in the UK to complete all three parts of the Edward de Bono Thinking Course with WHC College.