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 Scams: How To Spot Them A Mile Away

In recent years, investors have witnessed increased number of investment opportunities and offerings. While the complexity and success of these investment products vary, technological innovation has made the Forex market one of the fastest growth areas. Many of the leading Forex brokers reported up to 500% rise in the number of new retail customers. However, the growth of the Forex market has been accompanied by a sharp rise in foreign currency trading scams.

Many of these Forex scams are promoted on the radio, television, newspapers and the Internet. Investors who fall victim to these schemes, often lose all of their money. As an illustration, let?s examine the facts of a recent case involving Forex fraud and its consequences. W learned of a foreign currency trading opportunity through an infomercial on the radio. K, the owner of a Forex asset management firm, spoke during the infomercial, promising viewers significant profits with minimum risk. After seeing the infomercial, W contacted K, and later attended a seminar presented by K and his firm. The seminar was so convincing that W wrote a check to K for $100,000.

Several months later, W received statements (which were false) from K?s firm reflecting significant returns on his initial $100,000 investment. Thereafter, W attended another seminar and decided to invest more money. W took a loan and invested another $800,000 in K?s Forex trading operation. Short while after W?s second investment, the Securities and Exchange Commission filed a complaint against K and his firm for engaging in a scheme to defraud investors. K?s firm?s assets were frozen, including the $900,000 invested by W. A receiver was appointed to distribute the remaining assets of K?s firm to defrauded investors. The assets were distributed on pro-rata basis with no legal preference given to any of the victims. Since K?s firm?s assets were not enough to satisfy all of the defrauded investor?s claims, W received only about $22,000 of the $900,000 he invested.

Since a whole book can be written on the various tactics and methods used by Forex scam artists, in this article, I will focus on the major warning signs that one needs to identify to avoid falling victim to Forex swindlers.

1. Promises of Little or No Risk

If you encounter a Forex firm that claims to have developed a foreign currency trading strategy that carries very little or no risk, stay away. The reason Forex trading can be very profitable is because it also carries a very high risk of loss. The Forex market is very volatile, and, without good money management, an investor can lose most if not all her capital within few days. Thus, individuals and firms who make claims that are far from market realities, as is riskless Forex trading, are really after your money.

2. Guarantees of Large Profits

Beware of firms that guarantee large profits in Forex trading. These so called ?guarantees? are mere ploys to entice investors and make them believe that their money is safe and that they will definitely make large profits. Such claims are simply untrue, because even the best professional traders cannot guarantee that they will make a profit any given day. The Forex market, as most financial markets, is very unpredictable. Hence, be suspicious of such claims and those who make them.

3. Employment Ads For Forex Traders

Many Forex trading firms use employment ads to attract individuals with capital to trade using their systems. The employment ads, which often appear in newspapers and on the Internet, state that a foreign currency trading firm is looking for individuals to teach them how to trade the foreign currency market using firm capital. Those who reply to the ad are convinced by the firm that they will make a fortune trading currencies if they participate in the firm?s training program. During the training process, which often occurs on a demo system, the novice traders are encouraged and told that their demo trading records show that have made significant profits, that they are ready to make real money and would very successful. Despite the firm?s assessment of the novice trader as a brilliant newcomer, no firm capital is provided to the trader, instead the excited novice is told to use her own capital to trade using the firm?s platform. In addition to various fees imposed on traders using the firm?s platform, the Forex firm makes money as an introducing broker. Each time the novice trader trades through the firm?s system, a good part of the spread charged by the broker is shared and goes into the firm?s coffers. After few months, the novice trader loses all of her capital and leaves. The Forex firm, having made money during the novice trader?s short stint, moves on to new traders eager to become rich trading foreign currencies.

4. Is the Forex Firm a CFTC or NFA Member?

Before you sign a check and give your capital to a Forex company, make sure you investigate the entity. Check to see whether the Forex firm, with which you want to do business, is registered with the United States Commodity Futures Trading Commission or the National Futures Association. Many scam artists falsely claim that their firms are registered with the CFTC or the NFA to gain a perspective investor?s trust. Do not trust anyone, research the firm and the background of the individuals involved before parting with your hard earned money.

The Internet has paved the way for many new opportunities for retail investors. The Forex market is both exciting and fast paced. Investor?s who are careful and diligent are likely to avoid the perils of this market, and will profit from the growth and opportunities of foreign currency trading.

Please visit http://www.forexweek.com.

Forex and Some Important Facts about Bollinger Bands

Forex trading is nowadays one of the most looked after occupation for many persons of all ages around the world. This is due to its great advantages over other capital markets and its high profitability potential; among these advantages you will find that is extremely easy to access a trading platform from the best forex broker firms thanks to the internet; and also you will notice that Forex has a high liquidity along with a high leverage.

But having a good broker firm and great trading platform is only one part of what you need in order to make your forex trading career a winning and profitable one. You need to have the right knowledge and techniques in order to forecast with the best accuracy what the market will do next. One of the techniques used to predict the Forex market behavior is that based on Bollinger Bands.

These Bollinger Bands are what is called a technical trading tool and they are widely used in the capital markets (including Forex) and were created by John Bollinger in the early 1980s. These bands technique was formulated based on the need for adaptive trading bands and the discovery that the volatility of the markets was a dynamic phenomena, not a static one as was widely believed at the time.

Bollinger Bands consist of a chart of three curves drawn in relation to currency pairs prices. The band situated in the middle is a measure of the intermediate-term trend and is usually a simple moving average, that serves as the base for the upper and lower bands. The interval between the upper, lower and the middle bands is determined by the volatility of the market, typically the standard deviation of the same data that were used for the moving average. The default parameter is 20 periods and two standard deviations above and below the middle band; of course this may be adjusted to suit your needs.

In short, the purpose of Bollinger Bands is to provide a relative definition of high and low price. By definition prices are considered high when touching the upper band and low when they touch the lower band. This relative definition can be used by the Forex trader to compare price actions and as a very useful indicator when the purpose of the trader is to arrive at rigorous buy and sell decisions.

Adrian Pablo is a Forex freelance writer with articles published in a number of places. Get a free report on Fibonacci Trading and learn more about the world of trading , visit: http://www.1-forex.com

What A Forex Broker Does

 

Even if you have bought and sold homes before, you probably would not want to do it without the help of a licensed real estate broker. The housing market is constantly changing, and you want someone that understands where that market is headed. The added expertise in the field gives you a competitive edge over the rest. The same is true when dealing the FOREX market. A FOREX broker can be a source of information and strength in your trading endeavors. Even seasoned traders, rely heavily on the help of FOREX brokers. Trading is risky business, and your broker can be there to help ease some of the risk off of your plate.

Even if you have bought and sold homes before, you probably would not want to do it without the help of a licensed real estate broker. The housing market is constantly changing, and you want someone that understands where that market is headed. The added expertise in the field gives you a competitive edge over the rest. The same is true when dealing the FOREX market. A FOREX broker can be a source of information and strength in your trading endeavors. Even seasoned traders, rely heavily on the help of FOREX brokers. Trading is risky business, and your broker can be there to help ease some of the risk off of your plate.

The trading decisions are still ultimately up to you, but having a broker allows you to work quicker and more efficiently. Utilizing your brokers system can mean quicker trades 24-hours a day. It is like having someone work for you while you are away on vacation, or even working a full time job. Dont underestimate the value of a reassuring knowledgeable voice on the other end of the phone. With all the technology available, it still does not give you that personal guiding hand in the process.

Technology and your FOREX Broker

Many people believe that the FOREX Broker is a dying breed. With all of the technological advances in field, many individuals now rely heavily on computers and see no need for a broker. I would caution this line of thinking, however. If you want the convenience of an online system but the security of having someone there to answer your questions, find a brokerage firm that does both. Most FOREX brokers understand the need for 24-hour access, and have online portfolios and trading available to their customers. When you have a tough questions or problem, you will be glad you kept your broker around.

Top broker benefits

FOREX brokers vary greatly depending on the size of their firms. You dont necessarily have to go with one of the leaders to have a good trading experience, however. You will want to look for a broker firm that offers real-time access, price certainty, competitive pricing, and competitive spreads.

Generally speaking, the bigger the FOREX broker firm, the better their spreads and prices will be. They have more pull in the market and are able to negotiate prices better. Weigh all the benefits and downfalls to each firm to ensure an educated decision. A good price does not always mean the best broker, so choose wisely.

Choosing a Broker

There are certain questions that you will want to ask to your prospective FOREX broker. Such questions include:

1. What is the spread? (Hint: The lower the spread the more money you make!) a. The spread is calculated in pips and is the difference between the price at which a currency can be purchased and the price at which it can be sold. Simply put, your broker has to make money. Thats how they stay in business. Unlike traditional stock trading where brokers charge commissions, FOREX brokers make money off the spread. The lower the spread the more profit that there is for you.

2. What are your credentials? (Hint: There are certain affiliations you should look for.) a. Most large brokerage firms are connected in some way to a bank or financial institution. Since the majority of their business is based on credit, this is a very important partnership. Their affiliation offers you the opportunity to invest thousands more than you could with smaller firms. It is also recommended that your chosen FOREX broker be registered with Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). Refer to your brokers website or call directly to find out if they have such affiliations.

3. What tools are available to help me learn more? (Hint: Not all broker firms are created equal. Find out who offers the best resources and information to help you make the smartest trading decisions.) a. This is a critical question to ask. It is one thing to fulfill your trade requirements, but a FOREX broker needs to also provide you with educational tools. Ask what kind of tools they offer for their clients. A good company should offer real-time charts, technical analysis tools, real-time news and data, and software or website support. Be weary of any company that refuses to share information or trial versions before opening up an account. You will want to try out their system before you choose to invest money in it. Many offer test accounts that allow you to play the market without actually investing any capital.

4. What is your leverage? (Hint: This is the determining factor on how much money you are able to make with each investment.) a. Leverage is the key factor to your success. As discussed earlier, the FOREX market runs mostly on credit. Your FOREX broker is able to supply you with a different margin depending on their size and your needs. The higher the margin the more money you can possibly make. If you are limited on funds, finding a high margin FOREX broker is top priority. If you have the capital already, you may decide that a lower margin is a smart choice for higher risk transactions and vice versa.Brian Channell is an online entrepreneur. Please visit www.MyForexEducation.com to learn more about Forex trading