Why You Should Trade FOREX Over Other Investments

Everyone has heard of stocks and shares, probably even the futures market, but trading the FOREX (Foreign Currency Exchange, or FX) market is a relatively new phenomenon. Until recently, FOREX was the domain of the banking fraternity (large banks can trade billions of dollars daily), and the elite in financial and business circles. But now it is possible for the average person to be a part of this incredible - and very profitable - way of making a living, thanks to the personal computer and an internet connection. All done electronically and considered an over-the-counter (OTC) market, trading is far easier and less risky than either the futures or the stock markets. Money can be made both on a rising and falling market, unlike the stock market, which relies on shares increasing in price to create profit.

More and more astute internet entrepreneurs are shunning the traditional financial markets and turning to FOREX trading. They know that it is possible to earn a full-time income from part-time effort - if you'd like to make $200 to $3,000 for as little as ten minutes' work, and with minimal risk, then FOREX is for you.

FOREX, the spot (cash) market for buying and selling currency, is the largest financial market in the world. Every day more than $1.5 trillion (yes, trillion) is traded globally and, unlike the stock market, which has fixed hours, it is a market that never sleeps. Somewhere in the world, at any time of day or night, FOREX is open for business, six days a week. The market starts each day in Sydney and moves around the globe as other FOREX financial centers open: first to Tokyo, then London and New York.

In simple terms, currencies are traded in pairs, for example the Euro and the US dollar (EUR/USD). The first currency - in this case the Euro - is known as the base currency; the second currency (here, the US dollar), is the counter-currency. All trades result in the simultaneous buying of one currency and the selling of the other. Thus, in this example, if you place an order to buy the EUR/USD, you are buying the Euro and selling the US dollar. If you were to sell the pair, you would be selling the Euro and buying the US dollar. There are many other currency pairs, such as USD/JPY, GBP/USD, EUR/GBP, USD/CHF and so on.

What makes trading FOREX an incredible way to make money online, is that price movements are highly predictable, creating trends that can be anticipated when it comes to decide when to buy and sell. Contrasting with stocks and shares, FOREX trading through brokers is commission free. It is also possible - and definitely recommended - to open a demo (practice) account with a broker first, where you can learn to trade and gain experience before you part with a cent of your own money.

Do you want financial freedom? With huge advantages over other more conventional money markets, why not experience the excitement of pips, rollovers, leverage, lots, long and short positions, limit orders etc. and start to trade FOREX. Good luck!

Penelope Housden.

For more information on FOREX trading, and a FREE report showing how you can turn $300 into $30,000 in as little as 6 months, go to: www.firstclassforex.com

?How To? Start Trading The Forex Market? (Part 6)

HOW TO READ FOREX PRICE CHARTS?

Forex Price Charts, what DO they mean and HOW to use them?

Important numerous facts as discipline, trading rules, not being greedy etc., but one of the most important things is:

LEARN to read the charts as Charts represent the lifeblood of the market.

I admit that reading charts, and interpreting patterns, are more an art than a skill. Base and apply your entry and exit decisions on YOUR OWN combined methods of technical and fundamental analysis.

FOREX charts, are easier to interpret and to use. They reflect a slower moving, stable economy of a country, compared to the stock market, with its daily drama of company reports, Wall Street Analysts and shareholder demands.

Unlike stocks, currency charts do not spend much time in trading ranges and have the tendency to develop strong trends. Furthermore, Forex with its 4 Mayor currencies is easier to analyze than tens of thousands of stocks.

(Mayor currencies are: USD/JPY, EUR/USD, GBP/USD and USD/CHF)

The complimentary FREE live charting software, with the ultimate cutting edge technology provided by http://www.fenixcapitalmanagement.com/ , will be absolutely sufficient for you to analyze and watch any one currency pair. Understanding just a few basic points about the technical analysis of currency chart can lead to increased profit potential.

Pricing - Price reflects the perceptions and action taken by the market participants. It is the dealing between buyers and sellers in the Over-The-Counter (OTC) or ?interbank? market that creates price movement. Therefore, all fundamental factors are quickly discounted in price. By studying the price charts, you are indirectly seeing the fundamental and market psychology all at once , after all the market is fed by two emotions - Greed and Fear ? and once you understand that, then you begin to understand the psychology of the market and how it relates to the chart patterns.

Data Window Chart ? FCM and most online charting stations, when you click on a price bar or candlestick, it will display a small box of data usually called a display window which will contain the following items:

H = Highest Price
L = Lowest Price
O = Opening Price
C = Close Price (or Last Price)

The most common types of price bars, used in FOREX trading, are the Bar Chart and the Candlestick chart:

Bars Charts -

Price bars are a linear representation (a line) of a period of time. This enables the viewer to see a graphic representation summarizing the activity of a specific time frame. As an example, I use 10 minutes, 60 minutes and daily time interval for my systems. Each bar has similar characteristics and tells the viewer several important pieces of information.

First, the highest point of the bar represents the highest price that was achieved during that time period. The lowest point of the bar represents the lowest price during the same period. Regular bars display a small dot on the left side of the bar which represents the opening price of the period and the small dot on the right side represents the closing price of the period.

Candlesticks - Japanese Candlesticks, or simply Candlesticks as they are now known, are used to represent the same information as Price bars. The only difference is that the difference between the open and close form the body of a box which is displayed with a color inside. A red color means that the close was lower than the open, and the blue color represents that the close was higher than the open.

If the box has a line going up from the box it represents the high and is called the wick. If the box has a line going down from the box, it represents the low and is called the tail.

Many interpretations can be made from these "candlesticks" and many books have been written on the art of interpreting these bars.

Chart Intervals & Time Frames:

A chart Time Scale & Period, or time frame, basically refers to the duration of time that passes between the OPEN and the CLOSE of a bar or candlestick.

For instance, with your broker software, you will be able to view a currency pair, in a 1-hour time frame over a 2-day period, 5-day period, 10-day period, 20-day period and 30- day period.

Most of the short-term time intervals (5-min and 1-min charts) are used for entry and exit points and the longer- term time intervals (1-hour and daily charts) are used to see where the general trend is.

Veteran Trader Martin Maier is the Founder of Fenix Capital Management, LLC He is the developer of various futures and commodities trading programs and his systems have been ranked and rated by various large American Investment Profile Ratin

Trading Currency Through Online Forex Brokers

Access to foreign exchange (forex), the most extensive market on the planet, is generally through an intermediary known as a forex broker. Similar to a stock broker, these agents can also provide advice on forex trading strategies. This advice to clients often extends to technical analysis and research approaches designed to improve client forex trading performance.

Financial institutions are generally the most influential in the forex market through high-volume, large-value forex currency transactions. Historically, banks enjoyed monopolistic access to the forex markets, but through the Internet, any forex speculator can also enjoy 24 hour access to the market via a forex broker.

Forex traders have the aim of using the smallest amount of one currency, say the US dollar, to purchase another currency like the British Pound. If supply of the pound lessens in a busy market, it will cost more dollars to buy pounds, and the forex trader hopes to sell their pounds at a higher than their purchase price.

Secure web connections today allow many forex traders to work from home, where ready access to news and other technical advice informs decisions on what forex positions to take. Similar moves are being made by stock brokers, who are also moving out of banks and other traditional institutions.

Your needs in the market will influence your choice of forex broker. Online forex brokerage firms, known as houses, provide those new to the forex market with detailed research, advice and simulators to learn how to use their forex trading tools. The experienced online forex trader is catered to by other broking houses, with in-depth advice, but less focus on forex trading instruction based on the assumption that you are familiar with the forex market. To make an informed choice, it is advisable to trial several differing online forex broking houses and their trading tools to find the best fit for your needs.Jay Moncliff is the founder of http://www.forex-web.info a website specialized on Forex Broker, resources and articles. This site provides updated information on Forex Broker. For more info on Forex Broker visit: http://www.forex-web.info

Forex2u Forex strategy on successful Forex trading

The essence of the FX2u Forex strategy is that it does not have any Forex trading system but could forecast the market trend accurately.

Every set of Forex trading system available has its disadvantages. The market trend could not be forecasted. If the market could be forecasted, by depending on the RSI, PAR, MOM analysis techniques and some other theories, Forex traders could easily make a fortune.

Many Forex traders could not obtain the anticipated outcome by using these analysis tools, and suffer huge losses. The main reason is relying on some imperfect tools to forecast the unpredictable market trend is just a waste of effort. Therefore the FX2u Forex strategy spirit is to abolish the entire subjective analysis tool.

To survive in the market is to follow the market trend, following the market trend is the essence of the FX2u Forex strategy. By using the opposite theory to enter the market, will only lead to lost. The reason is that if the market rises, it may continue to rise. If the market drops, it may continue to drop. No one is able to forecast when the market trend will stop.

By following the market trend, the market risk could be reduce to the lowest, the FX2u Forex strategy will advance the following the ten principles:

fully understand the how market function and the market trend, else dont trade

After entering the market, the Forex trader MUST immediately put a market stop.

If the stop order has been hit it MUST be executed immediately, NEVER make changes by lowering the stop order price.

If the forecast is wrong, Forex traders should leave the market immediately, then analyze again.

If the forecast is wrong, Forex traders should stop loss and should not increase trading.

Forex traders should admit mistakes, do not continuously make mistakes.

All analysis tools are imperfect, mistakes could always occur.

If the market rises Forex traders should buy, if the market drops Forex traders should sell, always follow the market trend.

Forex traders should not forecast the market price because such forecast will not be as easy as forecasting the market trend.

If the forecast is wrong, once the loss reach 10%, Forex traders must stop loss immediately, do not let it surpasses 10%, otherwise it would be difficult to recoup the capital again.

Lvin Han is the editor of www.forex2u.com
http://www.forex2u.com/fx2u-forex-strategy.html

 

The Duty of A Forex Market Maker

The investor in the currency market takes for granted that a pair of currencies can be bought or sold at a moments notice.  Once an order is placed with a broker, the trade is executed within seconds.

The investor in the currency market takes for granted that a pair of currencies can be bought or sold at a moments notice.  Once an order is placed with a broker, the trade is executed within seconds. It is, of course, not as easy as that.

Whenever a pair of currencies is bought or sold, there must be someone at the other end of the transaction. It is very unlikely that the investor will always find someone who is interested in buying and selling the same two currencies at the same amount, and at the same time. Hence, the question remains, How is it possible that the forex investor can buy or sell at any time? This is where the forex market makers come in.

The forex market maker is a bank or brokerage company that stands ready, every second of the trading day with a firm bid and ask price. This is good for the investor because when the investor chooses to buy and sell a pair of currencies, the market maker will purchase from and sell to the investor, even if they do not have a buyer and seller lined up. In doing so, they are literally making a market for the currencies.

Forex market makers ensure that the market is always functional and that the currencies in it will always fetch the market rate. Forex market makers do so by updating their prices at intervals of at least 30 seconds and undertaking to trade if this is requested. Forex market makers must fulfill their obligations irrespective of whether the economic situation is favorable or unfavorable, or whether they lose or profit by doing so.

Typical forex market makers include Gain Capital, CMS Forex, Forex Capital Markets (FXCM), and Global Forex Trading, all of which are regulated by the Commodity Futures Trading Commission (CFTC) of the USA.  Another prominent forex market maker is Saxo Bank, which is regulated by the Financial Services Authority (FSA) of Denmark.

Until recently, central banks, commercial banks and investment banks dominated the forex market. Due to the entry of forex market makers, other market players like international money brokers, large multinational companies, registered dealers, global money managers, and private speculators have entered the market in large numbers.

Forex Brokers provides detailed information on forex brokers, forex trading and market makers, and other forex-related topics. For more information go to Forex Brokers and/or visit its sister site at Incorporating in Florida Web for related information.

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Discover An Effective Forex Trading System

What is the importance of an effective Forex trading system? An effective system provides you the trader, incomparable prospects to increase your earnings. And why not?

The Forex market is the largest financial market in the world with average daily trading of the currencies going over US$1.6 trillion. One other thing, its the most liquid market there is, to trade in. Forex market or Foreign exchange market is the trading activity that refers to the synchronized buying of one currency, which is called the base currency while selling off a second currency, called the counter or quote currency. As youve probably gathered, these currencies are traded in pairs. Some of the most popular pairs are US Dollar/Japanese Yen (USD/JPY) and the Euro/US Dollar (EUR/USD. This is done with the clear intent to profit from the appreciation of the e.g. U.S. Dollar. These three currencies together with the British Pound, Canadian Dollar, Australian Dollar and the Swiss Franc are the most popular currencies traded, accounting for nearly 70% of the trading done in the United States marketplace.

Why is there a need for an effective Forex trading system? One reason is because of the unique characteristics of the Forex trading market.

For one, Forex trading is conducted differently from the stock market or futures trading. There is no central physical location, where the transactions are conducted.

Another unique characteristic is a majority of the transactions are done over the telephone link ups or electronic exchanges, which makes this an over-the-counter or interbank market. This makes it ideal for the use of computers and technical analysis, to take advantage of profitable opportunities.

There are more chances to increase profits, because of the attractive pricing. Forex quotes are based on interbank prices regards of the transaction size.

Orders are effectively carried out, because orders are immediately confirmed on line or over the phone, youll know the rate at which the order was executed.

Finally, the margin system is in your favor. With 2% of the absolute value of the interbank contracts, you can still trade in the largest marketplace, provided you are able to maintain the margin requirements.

With all the benefits and differences a Forex market has, what makes it crucial to for you to have an effective trading system in place?

As with all trading activities, trading foreign exchange carries a great risk. Youll need to ascertain for yourself what these risks are. The high degree of leverage is a double edged sword; it can work for or against your benefit.

You should gauge the level of your knowledge and experience. Should you hire a financial advisor? Have you decided on the amount you are willing to risk and at what financial level you are willing to take losses?

For with the unlimited potential to earn, comes the possibility of great financial loss. There is no fool-proof Forex trading system.

Bob Hett offers great tips and advice regarding all aspects of
Forex marketplace. Get the information you are seeking now by visiting http://www.forexinformation.info

Forex Profits

Forex, FX and the Forex market are some common abbreviations for the Foreign Exchange market. Actually it is the largest financial market in the world, where money is sold and bought freely. In its present condition the Forex market was launched in the seventies, when free exchange rates were introduced, and only the participants of the market determine the price of one currency against the other proceeding from demand and supply. As far as the freedom from any external control and free competition are concerned, the Forex market is a perfect market.

With a daily turnover of over trillions of dollars, the Foreign Exchange market conducts more than three times the aggregate amount volume of the United States Equity and Treasury markets combined. The Forex market is an over-the-counter market where buyers and sellers conduct foreign exchange business using different means of communication.

Unlike other financial markets, the Forex market has no physical location or central exchange. Since the Forex market lacks a physical exchange, the market trades continuously on a 24-hour basis, moving from one time zone to the next, across each of the worlds major financial centers every day. Trillions of dollars of foreign exchange activity takes place every day. From 1997 to the end of 2000, daily forex trading volume surged approximately from US$5 billion to US$1.5 trillion and more (according to various recent studies it has touched $1.7 trillion per day and dwarfs all other markets for trading in size and volume). It is really difficult, if not impossible; to determine an absolutely exact number because trading is not centralized on an exchange. But one thing is for sure that the Forex market continues to grow at a phenomenal rate.

Before the advent of Internet and ecommerce, only big corporations, multinational banks and wealthy individuals could trade currencies in the Forex market through the use of the proprietary trading systems of banks. These systems required as much as US$1 million to open an account. Thanks to advancements in online technology, today investors with only a few thousand dollars can have access to the Forex market 24 hours a day and around 5 days of a week.

The Forex market is a nonstop cash market where currencies of nations are traded, typically via brokers called forex brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets while traders increase or decrease value of an investment upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events so it is also considered to be a highly volatile and fragile market too. Conditions of the Forex market never remain the same they changes every second.

The foreign exchange market dwarfs the combined operations of the New York, London, and Tokyo futures and stock exchanges. According to its size and scope it is many times larger than all other markets. Stats shows that spot transactions and forward outright Forex trading take place in the inter-bank market. 51% of the market is in spot Forex transactions, followed by 32% in currency swap transactions. Forward outright Forex transactions represent another 5% of this daily turnover, with options on interbank Forex transactions making up another 8%. Therefore the inter-bank market accounts for 96% of the global foreign exchange market, with the remaining 4% being divided among all the global futures exchanges.

For traders, Forex trading provides an alternative to stock market trading. While there are thousands of stocks to choose from, there are only a few major currencies to trade (the Dollar, Yen, British Pound, Swiss Franc, and the Euro are the most popular). Forex trading also provides a lot more leverage than stock trading, and the minimum investment to get started is a lot lower. Add to that the ability to choose flexible trading hours (forex trading goes on 24 hours a day) and you have the reason why so many stock traders have flocked to day trade currencies.

Anthony Trister is a currency trader and is an owner of OneDayTrades which offers free, mechanical forex signals and an automated trading program for those wanting to trade forex. Free access available here: http://www.onedaytrades.com.