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Easy Forex Review

FOREX or Futures. Where to Trade

September 1st 2010 Posted at Forex Guide
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Our modern futures market originated in the 19th century when farmers began selling contracts to deliver agricultural products at a later time. They did this to attempt to anticipate market needs and to smooth the supply and demand during the off-season.

The futures market has changed dramatically since then, in current times the futures market is no longer restricted to agricultural products. This worldwide commodities market now includes such things as manufactured goods and financial products as well as agricultural products. A futures contract is a guarantee that a certain product will be sold at a fixed price on a certain date.

When speculators play the futures market there is no expectation of the products being delivered and the actual goods are not even important. It is actually just the contracts themselves that are traded and the value of these contracts is in constant fluctuation.

In every futures contract there are two positions a long position and a short position. The short position is filled by the seller and the long position is the buyer. Futures accounts are settled on a daily basis.

As an example a farmer enters into a contract with a grocer to sale him 1000 bushels of corn at 10 a bushel. At the end of the specified time the contract is settled, if the current market price of corn is at 9 a bushel the farmer will realize an extra profit of 1000 pounds on the contract and the grocer will have lost the same amount. In this situation the farmer now sells his corn at 9 a bushel on the open market but his loss is covered by the profit from the contract. The grocer now will buy his corn for 9 a bushel but in reality he is still paying 10 a bushel because of the cost of the contract. If he had not entered into a contract he could have bought his corn for 9 and saved 1000. However if the price of corn had risen significantly to 13 a bushel he would have saved himself 3000.

Speculators try to guess the direction of the market fluctuations and make a profit by buying and selling contracts.

FOREX

The FOREX market has numerous advantages over the futures market. Since it is the largest financial market in the world it is far larger than the futures market. The FOREX market is also far more fluid, which makes it easier to execute stop orders with very little slippage.

The futures market is usually only open 7 hours a day where as the FOREX exchange is open 24 hours a day 5 days a week. This extra time makes the FOREX market more fluid and allows traders to take advantage of this by trading at any time instead of waiting for the markets to open.

There are no commissions in FOREX trades; the brokers make their profit through the spread. This is the gap between the currency buy price and selling price. In futures contracts the trader has to pay commission fees on every transaction.

Due to the extremely high volume of trades in the FOREX market most transaction are executed almost immediately, this allows for better price control of your trades. In future contracts the price the broker quotes will be from the last transaction and your price could be significantly different.

In the futures market debits are a constant possibility due to daily fluctuations. The FOREX exchange has many built-in safeguards in the trading system that helps protect the traders.

Forex Facts

August 25th 2010 Posted at Forex Guide
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There are many benefits and advantages for trading currencies on the Foreign Exchange, better known as Forex.

The Forex Exchange was established in 1971. This market grew at a steady rate throughout the 1970s, but in the 1980s Forex grew from trading 70 billion per day to over 1.5 trillion each day.

There are many huge players in Forex, but it is accessible to the individual trader. Each lot traded is worth approximately 100,000. By using leverage, an individual trader is only required to have a 1000 investment in the trade. This is a 100:1 leverage. No other market offers this amount of leverage.

Forex is also an extremely liquid market. Because it is so large, you can buy or sell in only seconds where your trade is only a mouse click away. You can also preset an automatic close for your position. This means you dont have to sit and watch your position, just place the trade, set an exit point and go what you want.

Forex trades virtually 24 hours, 7 days a week. It only closes from Friday afternoon until Sunday evening. This makes it possible to set your own trading hours. If you trade part time and want to place your trade at 3am, log into your account and trade. If you are a full time trader, the same applies. No other market lets you pick the hours you trade.

There are no commissions charged on Forex, only a small transaction fee. This is not possible in any other market, as brokers charge a commission on each trade in all other markets.

Because currencies are traded in pairs, so you are buying one currency and selling the other. For example, if an investor believes the US pound will gain against the euro, you would buy the US pound and sell the euro. Its just that simple.

The potential for profit is good as there is always movement between currencies. Even a small change can result in substantial profits because of the large amount of money involved in the transaction.

First and foremost, before just opening an account and blindly making some trades, you need proper training. Study the market, learn the terms used in trading, set up a demo account with a currency broker. Then, and only then, use real money to trade.

Forex And Daytrading

August 18th 2010 Posted at Forex Guide
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Online trading is great way for serious investors to make money, but inexperienced traders often wind up with big losses. A good set of instructions can minimize the risks and save months of expensive trial-and-error learning.

Day Trading

Day Trading had its heyday during the bull market of the 1990’s. All the amateurs have since dropped out, but day trading is still being practiced by professionals. There are fewer opportunities in the current market, but skilled investors can still find them if they know what to look for.

FOREX Trading

The Foreign Exchange Market (FOREX), the world’s largest financial exchange market, originated in 1973. It has a daily turnover of currency worth more than 1.2 trillion pounds.

Unlike many other securities, FOREX does not trade on a fixed exchange rate; instead, currencies are traded primarily between central banks, commercial banks, various non-banking international corporations, hedge funds, personal investors and not to forget, speculators. Previously, smaller investors were excluded from FOREX due to the huge amount of deposit involved. This was changed in 1995, and now smaller investors can trade alongside the multi-nationals. As a result, the number of traders within the FOREX market has grown rapidly, and many FOREX courses are appearing to help individual traders increase their skills.

As a matter of fact, it’s advisable to take FOREX training even before opening a trading account.
It is vital to know the market mechanics of FOREX, leveraging in FOREX, rollovers and the analysis of the FOREX market. Due to this fact, potential FOREX traders would do well to either enroll in a FOREX training courses or even purchase some books regarding FOREX trading.

There are pros and cons to enrolling into a FOREX course. For beginners a FOREX course is a rapid method of learning the basics of FOREX trading. Not much time is spent on history of the market or arcane economic theories. Often, on-line or phone support from a skilled FOREX trader is available to answer any questions. Also, the information is condensed and practical, often with graphs and charts.

The disadvantage is the price, as courses are more expensive than a paperback from the bookstore. Also,
the course may just teach the approach of the trader who wrote it, and individuals have different trading strategies. The student may grow accustomed to the logic and focus of the teacher without coming to realise that nothing is predictable in the FOREX market, and many different strategies will bring profits in varying market circumstances. Also, knowledge of practical applications may not be enough, as the FOREX is highly unpredictable and there are many external factors, such as political issues, affecting the flow of finances in the market.

The best advice would be to do some background research on the FOREX market first, and then enroll in a course.

FOREX! Find Out If Its the Right Market For You!

August 11th 2010 Posted at Forex Guide
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FOREX! Find Out If Its the Right Market For You!

Being successful! Does that have anything to do with choosing a market to trade? I would maintain that it does. One of the Secrets To Success is to choose something that fitsYou. After all, if one of your goals is to achieve a certain income level or net worth figure there are a multitude of ways that someone has been successful with, but probably only a few, that might be right for you. This applies just as much to the financial markets as it does elsewhere.

If youre reading this article, probably one of your endeavors is or will be some type of activity in the financial markets. Now which of the markets are right for you, meaning the best fit for your circumstances and your goals? Addressing this question will be far more profitable then trading the first market you happen to come into contact with. Ill help in this process by discussing some of the relevant features of the Forex or cash Foreign Exchange market.

One of the first Forex concepts to note is that the currency you are trading is a representation of a nations economy. Why is this important? Because its notable that national economies dont perceptibly change in a day or even a month. Contrast this with individual stocks, commodities or futures that are easily affected by daily news or even weather events. Thus the price moves of the major currencies take place against a broader backdrop than the before mentioned markets. This is expressed in the tendency of currencies to show strongly trending behavior in contrast to staying in tight trading ranges. Many will realize that tight trading ranges are some of the most difficult trading conditions while the trend is your friend because it is easier to profitably trade by hitching a ride. Trending markets also lend themselves to rules based technical trading systems. Do you prefer to have your trading choices laid out in advance, or do you shoot from the hip?

Are you planning to trade as a business or significant avocation? Do you plan to be active on a full or part time basis? If part time, are you otherwise occupied during regular business or market hours? Did you know that Forex trades 24 hours a day, six days a week? This makes sense if you realize that the Forex markets are serving the needs of nations and traders in every time zone. To facilitate this, most trading is done with online trading platforms that are considered to make an Over The Counter (OTC) market. Do your plans call for flexible or outside of regular hours scheduling?
How much capital would you like to allocate to your chosen trading activity? Someone whose trading is part time and viewed as a hobby may have a different amount of trading capital available than someone whose plan is to structure their trading as a business activity. Regarding capital requirements, the Forex market can accommodate almost any trading plan. This is possible because there are two trading unit sizes available. The full size lot is 100,000 currency units and may be controlled by a 1% or 1,000 unit margin. There is also a mini size lot of 10,000 currency units that may be controlled by a .5% or 50 unit margin. pound based traders can put the pound sign ahead of the above figures for illustration. To translate this to trading account requirements; a mini account can be started for as little as 300.00 US.

The above discussion of just a few facets of the Forex market is hoped to stimulate thoughtful consideration of the best trading situation forYou, and will continue as a series of articles to consider relevant features of the Forex markets.

To Be Continued

Forex A Snappy Way To Make Serious Bucks

August 4th 2010 Posted at Forex Guide
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Forex A Snappy Way To Make Serious Bucks

1.3 Trillion; Safe estimates peg it as the amount of currency thats traded on the Forex every single day.

Trading on the Forex is one of the fastest growing income generating opportunities in the world. All it takes to start is a small investment (many dealers will start you off with as little as 250), and some knowledge of the world markets and of trading. Oh. And, according to those that do it every day and live off changing pounds to pounds to francs and back, some common sense, some practicality and a lot of faith are a big help.

Some background:

1. The market began in the 1970s with the introduction of free exchange rates and floating currencies. Its the open market where the worlds currencies are exchanged and traded with few regulations. Because of the open nature of the market nearly anyone can trade and make money. The volume of trading and the enormous number of players make it almost impossible for any one trader to manipulate the market.

2. The market is open 24 hours a day, from Sunday evening to Friday evening, and there are always trades to be had. This makes it one of the most liquid and constantly moving markets in the world

3. While most transactions are made in lots of 100,000, marginal trading allows traders to start trading with an investment of as little as 250-500.

Marginal Trading- The Blockbuster Earner

Marginal trading simultaneously makes trading on the foreign exchange market so possibly profitable a great risk. Trading on the margin is simply trading with borrowed capital. Depending on your dealer, you can purchase 100,000 worth of currency for as little as 500. If your trades are on target, you make a profit on the entire 100,000 lot minus dealer commission, of course. If, on the other hand, your trade ends up losing you money, you could end up being liable for far more than the 500 you originally invested.

So thats why one of the strongest bits of advice youll hear from most experienced forex traders is Keep your eye on the margin or even more strongly, Dont ever trade on the margin.

Observe a few important tips to make quick money on the forex.

* Buy low, sell high. Yes, its a roadkill cliche, but there are many people who forget that the market runs in patterns of dips and rises. Keep your eye on the pattern and buy when the exchange rate dips, then sell when it peaks.

* Remember to cut your losses. No one, no matter what they tell you, runs a 100% profitable system. What they do have is the knowledge to get out of a trade before it goes further south. If you make a trade that decreases in value, decide ahead of time how much you can afford to lose. When you reach that low, sell. Dont hang on in case it turns around.

*Understand the situation in the country whose currency youre trading. The economy and politics of a country have a profound effect on the exchange rate of its currency. Keep your ear to the ground and be prepared to move based on what you hear because everyone else will.

* Select a system that fits your lifestyle. System is what its all about, according to traders who make money in the market. A system helps you decide in advance exactly how much you can afford to lose, and set stopsell or buy orders based on those figures. Pick a system, live your system, and dont second-guess your system.

* Focus on the bottom line. Especially if youre day trading, youll find that you lose at least as often as you win but you can still come out ahead if you plan your strategy and system out in advance. By deciding in advance how much you can afford to lose in a trade, and when you should take your profits and cut them loose, youll make a profit even when most of your trades are losers.

* And remember remember remember to upgrade your knowledge before taking the forex leap.

Treat forex trading like a regular business. You cant make money without knowledge, skills and a good attitude. Study, take notes and practice then go out there and make some serious money.

Forex

July 28th 2010 Posted at Forex Guide
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Money. We all need it. We all want it. Trillions and trillions of pounds, pesos, euros, pounds, levs, francs, and more change hands every day for goods and services around the world. Most of us are only familiar with the money that is exchanged for goods and services in our own country and are only concerned with getting more of that.

But there is a lot more to money than that. What is the relationship between the currency in your country and the currency of some other country and why should it matter to me? Im glad you asked. In this article we will explore some of the currencies around the world and answer some questions you may not even know you had.

First, if we are going to discuss currency and its relationship to other currency, we have to talk about Forex. Thats short for foreign exchange or the exchange of currency for a different type of currency.

There is no market in the world, including Wallstreet that can compare to Forex in volume of cash traded daily. Retailers, Governments, Currency Speculators, Banks, Corporations, and other financial institutions engage in forex or foreign currency exchange to the tune of trillions of pounds and other currency each day.

It is a truly amazing thing to see. People making money just by trading one countrys currency for another. Keeping up with the latest news in each country, economic trends and indicators, real-time monitoring of current currency values in comparison to another currency are all things required if you are going to speculate in this arena.

More than that, some forex speculators will tell you is, you have to have a good feel for it. You have to understand economies and be able to recognize the events and conditions that will cause people to lose confidence in one currency or another. You have to know when to hold em and when to fold em, as the Kenny Rogers song goes.

If you would like to check the exchange rates for each of these currencies against other currencies, you can open a new browser window and put this url into your address bar. Its a Forex Calculator. http:uk.finance.yahoo.comcurrency-converter?u

The following is a list of world currencies. It may not be every currency in the world, but it will give you an idea of the complexity of forex.

Albanian Lek, Algerian Dinar, Aluminium Ounces, Argentine Peso, Aruba Florin, Australian pound.

Bahamian pound, Bahraini Dinar, Bangladesh Taka, Barbados pound, Belarus Ruble, Belize pound, Bermuda pound, Bhutan Ngultrum, Bolivian Boliviano, Brazilian Real, British Pound, Brunei pound, Bulgarian Lev, Burundi Franc.

Cambodia Riel, Canadian pound, Cayman Islands pound, CFA Franc, Chilean Peso, Chinese Yuan, Colombian Peso, Comoros Franc, Copper Ounces, Costa Rica Colon, Croatian Kuna, Cuban Peso, Cyprus Pound, Czech Koruna.

Danish Krone, Dijibouti Franc, Dominican Peso. East Caribbean pound, Ecuador Sucre, Egyptian Pound, El Salvador Colon, Eritrea Nakfa, Estonian Kroon, Ethiopian Birr, Euro.

Falkland Islands Pound, Gambian Dalasi, Ghanian Cedi, Gibraltar Pound, Gold Ounces, Guatemala Quetzal, Guinea Franc, Haiti Gourde, Honduras Lempira, Hong Kong pound, Hungarian Forint, Iceland Krona, Indian Rupee, Indonesian Rupiah, Iran Rial, Israeli Shekel,

Jamaican pound, Japanese Yen, Jordanian Dinar, Kazakhstan Tenge, Kenyan Shilling, Korean Won, Kuwaiti Dinar, Lao Kip, Latvian Lat, Lebanese Pound, Lesotho Loti, Libyan Dinar, Lithuanian Lita.

Macau Pataca, Macedonian Denar, Malagasy Franc, Malawi Kwacha, Malaysian Ringgit, Maldives Rufiyaa, Maltese Lira, Mauritania Ougulya, Mauritius Rupee, Mexican Peso, Moldovan Leu, Mongolian Tugrik, Moroccan Dirham, Mozambique Metical.

Namibian pound, Nepalese Rupee, Neth Antilles Guilder, New Turkish Lira, New Zealand pound, Nicaragua Cordoba, Nigerian Naira, Norwegian Krone, Omani Rial.

Pacific Franc, Pakistani Rupee, Palladium Ounces, Panama Balboa, Papua New Guinea Kina, Paraguayan Guarani, Peruvian Nuevo Sol, Philippine Peso, Platinum Ounces, Polish Zloty, Qatar Rial, Romanian Leu, Romanian New Leu, Russian Rouble, Rwanda Franc.

Samoa Tala, Sao Tome Dobra, Saudi Arabian Riyal, Seychelles Rupee, Sierra Leone Leone, Silver Ounces, Singapore pound, Slovak Koruna, Slovenian Tolar, Somali Shilling, South African Rand, Sri Lanka Rupee, St Helena Pound, Sudanese Dinar, Surinam Guilder, Swaziland Lilageni, Swedish Krona, Swiss Franc, Syrian Pound.

Taiwan pound, Tanzanian Shilling, Thai Baht, Tonga Pa’anga, Trinidad&Tobago pound, Tunisian Dinar, U.S. pound, UAE Dirham, Ugandan Shilling, Ukraine Hryvnia, Uruguayan New Peso, Vanuatu Vatu, Venezuelan Bolivar, Vietnam Dong, Yemen Riyal, Zambian Kwacha, Zimbabwe pound.

Can you imagine sorting out all of the relationships between each of those currencies and precious metals. Forex is not for the faint of heart it would seem, but it does make a facinating topic. In some of the currency names you can see how it relates to world history.

I hope you find this article has helped you with at least an explanation of what Forex is and how it works. There is a lot more out there about Forex. Learn more!

Forex alerts are a handy way of staying on top

July 21st 2010 Posted at Forex Guide
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Forex alerts are a handy way of staying on top of the market

Because currency exchange covers the entire world and all 24 time zones, forex is a 24-hour-a-day market. This is good in that it results in billions upon billions of dollars of transactions per day. But it also means that forex traders have a constant influx of information to keep track of, unlike the stock market, where once trading closes at 5 p.m., thats it. So how do forex traders stay on top of things? Most of them use forex alerts of some kind.

orex alerts are available from many online forex brokers and other companies. A forex alert is simply a message sent to the user informing him of the latest developments in the forex market, often recommending action of some kind. These alerts can be sent via e-mail or cell phone text message.

The idea behind them is that no one can follow all the markets all the time. Even if you limit yourself to just the majors — U.S., Eurozone, Great Britain, Australia, Japan and Switzerland — thats still 15 currency pairs to keep an eye on. Whats more, sometimes things are steady for long periods of time, while other periods are marked by great activity.

The sites that offer forex alerts go about it in one of two ways. Some simply send out alerts every 24 hours, offering the latest info on the forex market. Others send alerts only when something crucial happens. These systems use formulas of their own to determine what constitutes something crucial, and they may charge a lot more for their more specific alerts. And of course its still up to the individual trader to act on or disregard the information send to him in the alerts.

Some brokers include forex alerts as part of their service, while others charge for them. Some are part of a wider alert program that also handles your stocks and bonds. You can tailor the type of alerts you get based on whether youre a conservative or aggressive trader, and how actively you plan to trade.

Serious traders who use forex alerts swear by them. No system is perfect, of course, and a smart trader will always do a little browsing on his own to make sure his latest alert didnt miss anything. But alerts are an invaluable way for busy investors to go about their daily lives without having to constantly watch the forex rates.

Factors That Influence Forex Market Trends

July 14th 2010 Posted at Forex Guide
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The Foreign Exchange or Forex is the largest market today for stock trading, and it is continually growing with more and more people investing in it. However, as promising as this market may be when it comes to profit, like any other trade it can be very volatile as well.

It is therefore important to be familiar with certain factors that influence trends in the Forex market if you are decided in joining this arena. After all, acquainting yourself with the many scenarios that can cause currencies to go up or down can help you a lot in making decisions for when to buy or sell.

There are basically three major factors that affect the Foreign Exchange a countrys economy, political conditions and market psychology.

Economy

Economic factors are the most basic things that create changes in a countrys currency. When such economic conditions as a budget deficit or surplus is present within a country, there will surely be reactions in the market and values will be reflected on currencies. Other conditions may also include inflation trends, and the general economic growth of the country.

The more prosperous a countrys economy is, the more investors will be able to adhere to doing trade in a more positive attitude. Such indicators as a growth in a nations gross domestic product (GDP), employment levels and retail sales among others will basically attract more investors and that nations currency value will likely go up.

Political Conditions

Another very important factor that influence trends in Forex, are the conditions of a countrys political sector. This is because political instability or turmoil can generally create negative fluctuations to an economy. But if such instances occur wherein a country may rise above political obstacles, the opposite may occur and the economy may improve.

Events in a region can surely create negative or positive interest among investors for a nations currency. And so, such conditions surely influence the trends for demands and prices of a certain currency.

Market Psychology

Of course, the perception of traders and investors will greatly influence the Foreign Exchange market in so many ways. After all, the market is highly dependent on whether or not people would want to invest on a countrys economy in order to determine whether currency prices will go up or down.

For example, such conditions wherein unsettling international events may happen, then under the flight of quality rule, people would generally want to look for a safe haven for their investments. Whenever there is a greater demand for a certain countrys economy, then a higher price will be given to buyers and the currencys value will go up and become stronger.

Other events that contribute to traders perceptions may be long-term trends where people invest based on what they have seen for a long period and time, and even economic numbers where people may base their investments depending on what numbers show a greater value.

The market in Foreign Exchange is often unpredictable and fluctuating. Therefore if you are interested in doing trades in this market, make sure that you take the time to be knowledgeable about good strategies that can help you play the game.

But more importantly, keep in updating yourself with the different economic trends in the international scene. After all, this currency market would greatly revolve upon events that would occur in the different countries. Familiarizing yourself with the factors that affect the Forex will surely help you make better decisions.

Choosing the Right Forex Software For You

June 30th 2010 Posted at Forex Guide
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You might be looking for a charting platform, or a trading platform. You could also be looking for an automated trading program, or a signal service. You are most probably looking for some form of assistance to help with your trading. This is really the holy grail for a lot of traders who do not have the time or the inclination to sit in front of a computer 16 hours a day. I have done that for a couple of years and done my ‘chart-time’, now its time to let the computer take care of it for me.

The best charting and trading platform is MT4, this allows you to also create custom indicators and expert advisors allowing you to auto-trade your account. Some people have created truly excellent Expert Advisors, and its like having your own forex trading guru sat at your computer 246, never getting tired, grumpy, hungry or anything else for that matter.

Provide a stable internet connection and power, and the EA will handle everything else for you. The problem is selecting the correct one, as there are so many out there.

Some criteria you should apply, when judging an EA are;

- Whether they will give you a free trial
- Their FORWARD tested history as well as their backtested history
- What modelling quality their backtests are run on (90% is the best available)
- Whether they offer a money back guarantee should the EA fail to perform for you

Markets change, and so do the performances of EA’s. The goal is really to find one that can perform consistently over different market conditions. The best we have seen yet in the market is the PointBreak EA. This was used by a private trading group by over a year before being recently released to the public.

PointBreak Expert Advisor (Very Aggressive Trading) has resulted 49.76% since October 2007.

This is the most aggressive setting available, the more conservative settings give smaller returns but correspondingly smaller drawdowns.

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