Currency Trading

Currency Trading 

 
Forex trading is also known as FX or Currency trading and is a kind of trade which facilitates the exchange of one currency to another at a certain rate. Participants of forex exchange include large financial institutions such as banks. It differs from other markets such as the stock market in that it is not controlled by a central governing body and members usually trade with each other based on credit agreements. The forex business is highly competitive because participants compete with each other. The good thing about forex trading is that it is very easy to do once you learn the rules of the business and it can easily be done from home if you have access to a computer and Internet. Being an on-line business makes it unique from the other markets in that it works for 24 hours a day except on weekends i.e. from 20.15 GMT on Sunday until 22.00 GMT Friday. Trade here exists as computer entries and no physical exchange of currency takes place.
 
Getting started is very easy as well. Just like any other business, you need to first understand what forex trading is. Get to know what different terminologies mean and the risks involved. For example learn about different exchange rates. Exchange rates refer to the rate at which one currency is exchanged for another. Also, get to know under which conditions currency values change so that you can know when it's best to sell or buy a certain currency. You should also know things like how to read bid prices. Bid prices are usually on the left and the asking price on the right of the chart. Here, bid price refers to the price at which you or your broker is willing to buy a certain currency in exchange for another.
 
The second easy step involved in forex trading is choosing a broker. A broker is an intermediary between the trader and the currency market. A broker is especially useful to newbies or people who do not have much knowledge of forex exchange because they help the client in making sound decisions. They are usually in charge of managed accounts. A good broker should have been in the forex business for long (10 years or more). This means that they have good experience in the job and can provide good customer service. Also, they should be regulated by an oversight body to ensure honesty and transparency. in the U.S, this is done by the National Futures Association (N.F.A) while in the UK, it's done by the Financial Service Authority (F.S.A).
 
Thirdly, you open a demo account. This is used for 'training'. It helps a participant know how the business works and helps them get the hang of it. An advice to starters is that they should start slow at first. Get to know which currency is doing well and which is doing bad. You do this by looking at different countries trading positions. The more goods a country has in terms of exports the more money it ought to make and this boosts its currency value meaning it's a good choice to do business with. After getting the hang of it, you can then increase the amount of trading and expand.

All trading can be a risk! 

Forex Terms

Forex Terms

Forex is an exceptional market with a lot of terms and own concepts. Even so, there’re terms and concepts that normally have matching in the stock market. Getting to learn the meanings of different Forex terms is usually one of the major steps to take prior to getting into the Forex market.

 

Share

Share is usually the smallest solitary unit of any stock. Every share of a company stock normally represents partial ownership in that company. Owning stock generally gives the investor the right to vote on some corporate matters. The shareholder also receives dividend from stock ownership depending on the number of shares he or she has.

 

Pip

A pip is a basic increment of the price movement in the Forex market. Its value may vary and this depends on the currency market as well as the contract size being traded. 

IPO

The IPO (initial public offering) is the procedure in which a company tenders its first shares to trade on the floor of a public market. When a company goes public, it receives financing from people (investors) purchasing its shares.

 

Bid

This is the price at which a trader sells a currency pair in the Forex.

 

Ask

This is the price at which a trader may pay money for a currency pair in the Forex.

 

Bid-Ask Spread

Bid price is normally the current price in which a buyer is willing to buy a certain stock while the ask price is usually the current price in which a seller is willing to sell a stock. Therefore, the bid/ask spread is the disparity between a bid price and the ask price. When one enters the market order to sell or buy a stock, that order is carried out at the current bid or ask price, respectively.

 

Mutual Fund

The mutual fund is generally a managed fund that usually invests in bonds, stocks and other financial tools. Once an investor buys shares in the mutual fund, he/she gains exposure to all instruments that the fund invests in. Generally, mutual funds present an easy technique of diversification.

 

ETF

An ETF (exchange-traded fund) shares some similarity with the mutual fund in giving investors exposure to other underlying investment vehicles. For instance, some ETF tracks commodities like gold, while others track a range of market indices. Simultaneously, ETFs are normally traded in shares over main stock exchanges similarly to an individual stock. The ETFs basically offers a cheaper, easier mode of investment in underlying assets that they track than you can find by buying each one asset by yourself or even by investing in the mutual fund.

 

Rollover

Rollover is the interest that is debited or credited to your account while holding a certain position overnight. It reflects the interest rate disparity between 2 currencies in the currency pai

 

Currency Pair

Every individual Forex market is normally a combination of a two currencies. Its price is signified by the exchange rate between the 2 currencies. Some of the examples of the currency pairs are the GBP/USD, USD/JPY and EUR/USD.

 

Base Currency

This is the first currency that is listed in the currency pair. When a Forex trader sells or buys a currency pair, he/she is selling or buying base currency against quote currency. For instance EUR/USD (euro/dollar), euro is generally the base currency.

 

Quote Currency

Quote currency is the 2nd currency that is listed in the currency pair. Its value is 'quoted' in the form of its value in relation to quote currency. For instance EUR/USD, US dollar is generally the quote currency.

 

FOREX trading has become one of the most popular methods for day trading and short-term investing since the introduction of Internet based currency brokers. Anyone can take advantage of the thrilling opportunities on the currency trading right from home.

All trading can be a risk! 

Stay as an Advance Forex Trading

Stay as an Advance Forex Trading

Forex trading is the best way to earn online where you have to know the direction of the currency pair to earn profit enlarges. Some forex traders do that and stay on a long run and some have no passion to stay and wait for best currency pair to earn profit by which they become failure and leave the dream of Advance Forex trading. In this trading very few traders are stay and make a strategy to how to making perfect guess of the direction of currency pair.

Some best advance forex trading strategies made by advance traders to stay on a long run. These ares:

Prevarication

Prevarication is a process in which advance traders use the both end of the pair at once to get maximum profit. Some brokers are allow the forex traders to use the hedge by which develop the two ends one is short and other is long on the same currency pair. Many non-experienced forex traders use the different pair to make a boundary but it is more complicated than same pair. For example- if you want to make a hedge to see the direction of different currency and then create a short boundary and also the other currency goes on just inverse then you must short the other currency to make a hedge. It is simple your other currency will be the winner and your first currency which goes upward become loser.

 

Position Trading 

In advance forex trading strategy position trading is one of them to become a long time member of the forex market. In this trading, you have to make an average short which indicates your position in the currency pair. For example: you make a short trade on USD/CHF at 1.30. but when the pair is fluctuated means sometimes lower or sometimes upper then you have to make an second short at 1.32 by which when the pair fall on 1.31 then you won the expected profit which you desire due to position trading.

 

Forex Alternative

Some advance forex trading also involve the forex alternative which provides the trader a specified bid on a specific time limit to gain or loss profit. For example: - if a trader placed a short on EUR/USD at 1.30 and you think that the pair goes on down to 1.28 in overnight. If you does not want to make loss your money then you have not less your short than previous. After estimation all the pair you lose your short and become a failure and want to run on long race then must purchase the forex alternative or option to make your short specified on a certain time limit by which if your short coming between the pair of 1.30 and 1.28 then you got lots of profit overnight. It is all depend on your guessing in which range you make a short trade at particular time and gain a profit or loss. 

If you want to become a successful advance forex trader then should make an strategy to win the short and make a profit what you desire and stay as long as forex trader. 

All trading can be a risk! 

How To Become A Professional Forex Trader?

How To Become A Professional Forex Trader? 

In today's world where we can easily say that money is everything for each and every one of us, so in these context we should have proper knowledge of all the financial products in which we have got exposure for example if we have invested in equity markets we should be having in depth knowledge of it like advantages if making investments is equity, disadvantages,various risks involved,proper study of various products of investment.Here what i am trying to say is that whether investment or trading in financial products should be carried out by using Professional way. Professionalism is must for every investor & trader because by having professional approach discipline in investing will follow in the same line and if one trader or investor has discipline in trading & investing than i can surely tell everybody that he will be successful professional trader or investor. But let me now straight come to the point and i.e. to give understanding to the readers about how one can become Professional Forex Trader. So let us discuss that point in some detail.


Usually if we see Forex market are not easy to understand for everyone specially for retail investors. We see that retail investors start currency trading with lot of enthusiasm they come prepared by reading books on trading in forex market,reading other things like e-booksand many other eye opener's on trading in forex market.Retail investors by getting success in some software based currency trading accounts i.e. practice account of currency trading starts to think that now he can also become professional Forex Trader and can easily start making easy & quick money. But for large number of investors this thinking can make lose their hard earned money in no time.What i am trying to say is making money in Forex Trading is not as easy as walking on the street. These does not mean that retail investor should not approach currency markets at all for making good money. But here what i am trying to tell is that retail investors should enter Forex markets not with halfhearted knowledge but with proper knowledge on it he should always try to take tips on forex trading from professional traders rather than taking from punters or speculators. Many times we see that after failing for one time or by occurring lossesin forex market retail investors gives up Forex trading and tells himself that he will never return back to forex markets neither for trading nor for investing,but if you ask me really these is the stage where retail investors should not think of giving up and tell to himself that instead of trading without proper training, experience ,professionalism, commitment & knowledge he will only trade if he has got full confidence up on himself that he can execute each & every trade in Forex market by taking all the things mentioned above in proper manner.


If we consider some of the most important aspects that one should have to become successful Professional Forex trader is proper knowledge of Forex market is must i.e. one should have total knowledge of all the important definitions in currency markets,about different products that Forex market has to offer, Volatility in the markets, When to take a trade & When to exit, Which currency is favorable for himself to take a trade that will give him maximum profit all these aspects and many other areas where a trader should have knowledge.


Second important thing for a successful & professional trader is Experience. A trader should first have experience to become successful player in currency market. He should have prior experience of how to take a trade and if trade goes against him should have experience of how to still make it profitable.


If we go on to other side of the coin then we can also say that a Professional trader is one which does not always make profit in all the trades he executes. So to become Professional trader one should be also ready to accept loss. That does not mean that once a Professional trader after making loss has become a speculative trader, that is not the case it happens in markets even professional traders also do makes losses.


Further we can add to these is Professional trader is one who has got knowledge of How to trade and one who has got confidence up on himself by repeatedly getting success through the trades he executes.


So i hope i have provided you all readers with valuable information that will help you all in becoming a Professional Forex Trader in Forex markets.

All trading can be a risk! 

What is Forex?

What is Forex?

Forex, which is the short form of Foreign Exchange, is the conversion of the currency of one country to that of another. In a country with free economy, its currency is valued with regard to factors of supply and demand i.e. the value of a currency of a country is pegged on the value of currencies of other countries such as the U.S. dollar. Many countries float their currencies against currencies of other countries therefore making them to fluctuate. 

 

Market forces such as tourism, trade, and investment determines the value of a particular currency. For example, when a tourist visits a particular country, he or she pays for goods and services using the currency of the host country. He or she must therefore exchange her home currency to that of the host country. Such currency exchange promotes demand for a particular currency. Another demand for currency exchange arises when a foreign company wants to do business with a company in a certain country. In this case, the foreign company will have to pay the local company using their local currency. In some cases, an investor may desire to do business in another country which will require the investment to be made in local currency. All these enhance the need for foreign exchange. Just like other goods and services, the value of currencies fluctuates as their demand and supply fluctuate i.e. an increase in supply or decrease in demand for a currency causes the value of the currency to fall and a decrease in supply or increase in demand for a currency causes the value of the currency to rise. 

 

There is always no “inside information” in foreign exchange. The fluctuations in exchange rates are as a result of actual flows of money and the anticipations on the macroeconomic conditions around the globe. The fluctuations in the currency are made public making all interested parties around the globe to receive the information at the same time. There is no single universal exchange for a pair of currencies. Unlike most markets, there is no centralized place where foreign exchange is done. The transactions are done by several participants located in various locations. 

 

History of Forex

The exchange of currency was there during ancient times. People helped others to change money at a commission during the Biblical times. Money changers were also present during the times of silver- and gold-smiths. 

 

During the 15th century, there was need for the family of Medici to open foreign banks to facilitate exchange of currencies for textile traders. During the 17th and 18th century, an active forex market which was done between agents who acted for England and Holland was maintained by Armstadam. During 1850, Alexander Brown and Sons became the leading firm to trade foreign currency in USA and in 1880, J.M. do Espirito de Silver engaged in foreign exchange. The gold standard currency began in 1880. During the period of 1899 to 1913, holdings of gold increased by 6.3% and holdings of countries foreign currency exchange increased by 10.8%. During the time, almost half of the foreign currency exchange was done using the sterling. After 1973, the modern foreign exchange trading began with countries allowing free trading.

Understanding Forex: Pips And Spreads

Understanding Forex: Pips And Spreads

If we see in todays financal world many things are very difficult to understand for an average common man as they are really complicated.like for eg. people easily understands some things like equity markets as it connotes to investment in shares of different companies and nothing else but if we go on the other side of finance world which is known as Forex Market people dont have complete knowledge about it.If you ask me personally i think people do not have any knowledge of forex market and one of the reason behind this is forex markets are largely dominated by large financial institutions, banks, hedgers etc. And of course the bigger reason is the money required in forex market is on big part as common man does not have that big money to invest in forex markets. If we go on like this the story of forex market will never end but my aim for writing is to give proper understanding about some of forex markets as well as of commodity markets. So lets disscuss about some of the basic terms of the related topic.

First we will define Forex market of currencies: 
It is a market where mechanisms are applied to value different currencies relative to one another,and exchanged.it is a market where individuals or institutions buys one currency and sells another in one transaction.Foreign exchange markets are located world over and different currencies are traded on it indifferent countries; European Currency Unit, Japanese (Yen), Swiss (Franc), Canadian (Dollar) etc .Further currencies are always traded in pair like (USD/JPY or Dollar/Yen) on a floating exchange rate.

Now we will understand the term called PIPS:
In forex market the exact text book defination of PIP is change in price of one "point" in Forex trading is usually pip, and it is equal to final number in currency pair's price. Now let us understand this defination to 0.0001.In Yen a pip is counted from second decimal place, 120.94 Yen based currency are exceptions in pips.

Now let us understand term called Spreads in Forex market: 
Basically a spread is difference between bid price and ask price.

Now let us understand the term commodities in Forex market: 
It is a market where people can purchase and sell different products useful in day to day working of life with the exchange of money. Commodity market offer great potential to become a great idea of savings for market savvy investors, arbitrageurs & speculator.it is easy to understand as far as fundamentals of demand of supply is concerned.World over one will find market exists for all the commodities known like Gold, Silver, Nickel, Copper, Wheat, Corn, Coffee, Sugar, Crude Oil, Natural Gas etc.

Now let us understand Volatility & Signals in Forex market: 
Volatility is how much a price fluctuates over a period of time. A market with high and erratic price range is said to have high volatility. for example in a day trading in currencies of USD/YEN the price range was day's high was 110.10 and day's low was 103.05 so here there was movement of nearly 7 dollars and when the high of the day was 110.10 and low was 108.95 so here there will be low volatility in comparison.

Now let us understand Signals in Forex market:
It is an indication of when to trade, which could be either given by human analyst or some computer software that is observing current movement,trends related to foreign exchange market.Large investors mainly put their trades based on these signals and in many cases try to predict impact of related signals will have before making their move.In these days traders usually go to subscription based forex signal signal service which imparts its signals via real time news feed.

So i hope i have helped many of the people who are reading this article for their understanding of various terms of Forex market which will improve their knowledge about Forex market.

All trading can be a risk! 

All about forex brokers

All about forex brokers

In forex market, individual

trader deal with currency pairs in placing trades. A trader will buy a
currency and then sell a different one, hoping that the one he has sold will
rise in value compared to the one he buys. In doing so, individual have to
enlist the help of forex brokers. A forex broker refers to an intermediary
between an interbank and you. An interbank is term that is used to refer to a
network of banks that normally trade with each other.

Most brokers will normally

have a relationship with more than one bank. This enables them to obtain and offer
you the best price possible. For an individual trader to place a trade in the market,
he must open an account via any forex broker.
These brokers will normally have access to huge liquidity providers who are important in helping find a counter party with whom you can trade against.

Opening an account with a forex trader

This is similar to opening

a bank account. It requires identity verification, paperwork and such. The entire
process may take several days before the account is opened and operational. However,
if you just wish to test the waters, the process is easier. Forex brokers will
give you demo accounts that you only need to provide minimal information to
open. These accounts enable you to get all the things that you need to set yourself
up for forex trade as well as to gain some experience by practice trading with
virtual money until you are good enough to trade with real money.

Types of forex brokers:

Market markers

This is a type of forex brokers that always quotes both an ask and
bid price for each currency pair. If traders place a trade with
any of this type of brokers, the broker will be the counter party in the trade.
This implies that each time you trade, you will be doing so against your
broker. Consequently, your trade does not get to the market and any money you
make is paid by your broker. This type of brokers is normally
compensated by the variance between the bids and ask price in any trade. 

ECN BROKERS 

Another type of brokers is the (ECN) electronic
communications network brokers. With these forex brokers, you don't
trade with them every time you place trades. Instead, whenever you place one, the order is electronically placed in the market via electronic communications
network. This system then finds a counter trader with whom you trade against
from the market. The broker will normally receive a commission for his services.

Types of balances

While trading or working with forex brokers, there are
normally two types of balances. One balance is your actual balance non
inclusive of your open trades. The other balance represents the balance you
would have if you close all your open trades. This second balance is called net
balance.

The spread

Once you open a trade with one of the forex brokers, they
will normally pass it to the market on your behalf. For doing so, they offer
you a price that is different from the amount they are able to get in the
market. This is referred to as collecting the spread. The spread is normally taken from your leveraged
account size and not from your account balance size and it's the brokers remuneration
for his services.

All trading can be a risk! 

Great Forex Trading Guide for Beginners

Great Forex Trading Guide for Beginners

Forex often seems like a complex platform for trading. However, it is not as difficult as it seems once you get started. If you put in the time to conduct some research and find some guidance, you will find that you can learn and use it with relative ease. If you want to learn more about currency trading, read on this article provides a great Forex trading guide for beginner.

 

Your money is not something that you should gamble with in currency trading. Forex applications are designed to help you make the best educated investment, but there is no guarantee with any investment that you make. If you are investing money and counting on it to provide your rent, your utilities or other basic needs, then you should not be investing it -- or you should be saving it in a guaranteed account, such as a savings or money market account. Do not put your family's financial health at risk.

 

Your demo account is designed to help you understand the ins and outs of forex trading before you start using real money. The purpose of the demo account is to take you through the various steps so that, if you do make mistakes, it's not with your own investment funds. Do not start making real trades until you are sure about what you are doing. Once you lose money, you can't get it back.

 

It is important to find a broker whom you trust to manage your currency trading account. There are many brokers who are ethical out there; it is just the unethical ones who make it into the news. Make sure you find one who is not paid by the transaction, though, because often they will urge you to make transactions that you do not need, in order to boost their own pay. Once you find someone you trust, stick with that broker through the long haul.

 

While you should be able to trust your broker, you need to do your own research and information-gathering as well. Remember that your broker is only human as well. The more you know about your own investments and the current market trends, the more informed your decisions will be. It's your money, and so you need to make sure that you know where it's going and what is going to happen to it.

 

It can feel really good to bring in a huge profit on a trade. It can also feel really awful to see your trade result in a disaster. If you let your emotions run your trading, though, you can get drawn into a vicious cycle of buying and selling that ends up with you down a lot in your brokerage account. Use logic, reason and information to drive your investment decisions.

 

Remember that there are no guarantees in trading.

 

Forex Trading Tips: Basic Strategies for the Beginners

Forex Trading Tips: Basic Strategies for the Beginners

Forex or foreign currency exchange is no longer a mystery for us as it has become one of the largest securities markets in the world. Anyone can learn easily how to trade and anyone of legal age is able to open a Forex account. However in the past, dealers suffered from problematic deals, and tried to recover from them just to observe that more challenges are waiting for them. Sometimes it is said that Forex trading is simple, while others dispute that it is not at all easy. Actually it depends on the risk you can take and it is also the reason of huge losses to many inexperienced traders. So for the beginners I would like to present some Forex trading tips that can help you to stay away from disasters and make best use of your latent talents in the currency exchange market.


First of all, understand your needs and your risk tolerance. To be profited in trading, you must understand clearly the currency exchange market. To be acquainted with the markets, initially you have to understand yourself and your ability. The initial step of achieving self-awareness is making sure that your risk tolerance and your capital allotment to trading are not extreme or deficient. These require careful study and analysis about your own economic goals in engaging in the exchange market.


Secondly, practice on a Forex Demo account before investing into a real account. You should practice at least two months for demo trading as 90% of the beginners become unsuccessful in the real money market. This is due to the lack of proper knowledge to understand the basics of this currency exchange market, practice and restraint. The remaining 10% become successful because they had been sharpening their talents on demo accounts for several years before investing in the real market.


One of the most important Forex trading tips is- never take too much risk. A successful trader has the ability to endure under a critical market conditions while an unsuccessful trader won’t be able to keep his account after several successive losing trades. The money management approach makes the difference between the two traders who can get reverse outcome even in the same trading condition in Forex.


Increase the volume of your account through natural gains. One of the best ways to trade in currency exchange market is by starting with small deposit as well as low leverage. You should add to your account as it makes profit. Some people have the idea that a larger account will permit huge profits in Forex but it has no logical explanation. This is one of the most important Forex trading tips that you should never forget.


Controlling your emotions is also important. Panic, fear, excitement or greed should not have any place in your mind. You should not be revengeful when you lose a trade. Over-reaction is an obstruction to thinking clearly; as a result it will cost you money. Overtrading can eventually increase your trading risks. For this reason traders are always recommended to start with small sums.


Keep these Forex trading tips in your book from the very first day you start trading, it will definitely help you to secure a successful career in the Forex market.

Understanding Forex Charts

Understanding Forex Charts

 

A forex chart is the abbreviation of foreign exchange chart. It’s a good idea to know how to read and interpret forex charts. They can appear different but that depends on the options an individual wishes to use them. The essential reason why traders should fully understand forex charts is for them to apply technical analysis . This is heavily relied on the price found on the chart used. Forex charts are set specifically to style of display and the price depending on the time the item on question is viewed. 

 

Items can be viewed by a span of one to ten years and this depends on the system of the chart. Prices in the chart are displayed either by a symbol of candle stick, a line or a bar. Most traders have opted to use candle sticks to symbolize the prices. The idea has been borrowed from the Japanese who have a long history of using the candle sticks. There is an advantage of using candle sticks which is they can understand fully underlying remains of the market. 

 

The candle stick market analysis was and is able to quantify the sediment rimming a market asset and an example is currency or a stock. The main significance of using candle sticks is that it shows the daily low, high or even open than the bar chart could display. To indicate on the daily opening and closing, it has a body that shows black or green. The black or green colour indicates that the daily open was lower than that the daily close. However if it is unfilled then it shows the daily close was lower that the daily open. The candles length is in relation to its high and low accompanied with the wicks. The candle stick charts can indicate clearly the up-to-date days relationship between the opening and the closing the underlying sediments like currency or stock.

 

From the above it follows that the trader can make quick and wise decisions by getting to know clearly each days sediment if they are low or high. Prices on forex charts can also be displayed by using a line. This way of displaying price shows the closing price for every period.

  

A bar chart is the same as candle stick. However the bar chart will show the trader the opening of the price where it really opened, the high and the low and lastly where the price closed. Chart patterns are used to determine long and short term forecasts. The data gotten from these forex charts can be used to do hourly, daily, weekly, monthly or even annual analysis of the market trend. The underlying technics on how to do the analysis is price on the chart and how to conceptualize it.

 

The charts patterns emerge because the balance between the buyers and sellers is changing constantly. This is why the price action never moves in the same direction. However some patterns in the charts show strong trends where prices move between resistance level and a support. The chart patterns are in two main categories: the reversal and continuation patterns.