learn forex first

Whether you call it Forex or Fx, you are talking about the Foreign Exchange market. This is where the trading of currencies, one against the other, is done. To have an idea just how big the action is, add all the stock exchanges in the world together and the Foreign Exchange will still be bigger!

When you consider that various speculators, hedge funds, governments as well as companies, plus countless private investors who take part, it is hardly surprising that this market is so strong and that the estimated daily average turnover of the foreign exchange market is over 3 trillion US Dollars.

By far the most asked for rate is the SPOT RATE. This transaction has to be settled within two business days.

With London, New York, Tokyo, Frankfurt and Sydney as the chief trading centres, the action hardly ever closes.

When you are at an auction and you put your hand up, it means you are bidding for something at a certain price. In a similar way, the word BID refers to the price at which the buyer is prepared to buy the currency.

The OFFER means the price at which an amount of currency the seller is ready to sell.

A LIMIT ORDER is when you give instructions the buy or sell a currency at a predetermined exchange rate.

When international banks buy and sell between themselves, the bid and exchange rates are called INTER- BANK RATES.

The difference between the bid and ask price of a currency is the SPREAD.

STOP LOSS is when an order is given to purchase or sell a currency at a price level set by the client on a particular trade which if reached, will close out the particular position at the stated price.

TRANSACTION DATE is the date on which a foreign exchange trade is being done.

The date which foreign exchange contracts settle is called the SETTLEMENT DATE.

Every currency has a three letter code such as for the Euro (EUR), for the British Pound (GBP), for the US Dollar (USD), for the Japanese Yen (JPY), for the Australian Dollar (AUD), for the Swiss Franc (CHF), for the Canadian Dollar (CAD). Actually, these are the major trading currencies and all commonly traded currencies are called the MAJORS.

CABLE is a name given to the US Dollar/British Pound rate in the foreign exchange market.

EFT is the Electronic Fund Transfer which is the transfer of money between banks.

When there is a quote in currency pairs, remember that the first currency is called the BASE currency. The second currency is called the COUNTER currency. As an example when you get a quote GBP/USD at 1.96 it means that for one GBP you will get 1.96 USD. So for ten thousand pounds you will get nineteen thousand six hundred US Dollars.

The many foreign currency exchange companies which you can find on the internet will gladly give you a quote, and by phoning around you can find the best currency rates. They will be better than a high street bank is likely to offer and they will give you a very fast service. Furthermore, most of them will not charge you any commission or the cost of the electronic bank transfer.

Paul Dubsky is director of Foreign Currency Exchange Services Ltd. The company is focused on being able to offer really friendly currency exchange rates. We believe we are the only Foreign Currency Exchange company which offers special rates to Senior Citizens.

Forex is a worldwide market of trading currencies. The main difference between Forex market and the stock market is volume. There are lots of people who enter the currency trading market on a daily basis. They trade more than two trillion dollars every day. This volume is significantly higher than the volume that is being traded on the stock market of any country on a daily basis. Currencies are traded not only by private traders but also by financial institutions, banks and even governments.

The second major difference of Forex from stock market is the liquidity. Everything that is traded on Forex market can be easily liquidated. That means you can convert any position into cash since it’s already cash but of a different country. Availability of cash is always there. A position can be liquidated at any time anywhere in the world.

Forex market by it’s nature is an International, Worldwide market. This market needs a few countries currencies to be involved. The stock market on the other hand can be a local market within one country. It is based on a product or business and does not need to involve other countries.

Another difference is the working hours. The stock market usually follows the business day hours at that place where it’s located. Forex by virtue of being worldwide market is open twenty-four hours a day except weekend. Since selling and buying happens in different countries Forex needs to be open all the time. When market closes in one country it opens in another one. It does have its most active hours. Forex is most actively traded during London session and New York session.

A stock market of any country is based on the currency of that country. For example, United States stock market is base on US dollar; Japanese stock market is based on Japanese yen. The nature of the Forex is such that it needs to involve multiple currencies to exist.

Albert Schmidt is a part-time currency trader. After quite a long time of struggle he learned to make consistent profit trading in Forex. Review a trading strategy he successfully uses in his trades.

Forex currency trading is carried out all across the world and is the largest financial market in the world. The major players in the forex market are the central banks of the country, major commercial banks such as Citibank and Bank of America etc, multinational corporations. The major portion of the trading is speculative trading while only 5% of the trading is for correcting the currency. The daily volume of the trade is worth US$3.2 trillion.

Though forex currency trading can be done in any foreign exchange, 85% of the trade is done in the major currencies. The major currencies are US Dollar, Australian Dollar, Canadian Dollar, The British Pound, The Euro, Japanese Yen and Swiss Franc. The Us Dollar accounts for nearly 28% of the total forex market.

OTC market which is operational 24 hours a day

It’s an OTC market or an over the counter market where forex currency trading is done in pairs. This means that USD would be sold to buy Japanese Yen or Swiss Francs would be bought and Euros sold consecutively. The forex market has no centralized exchange and is solely conducted through the phone and the electronic medium including the internet.

It’s a 24 hour market and the major centers of trade are Sydney, Tokyo, Singapore, Hong Kong, London, Frankfurt and New York. Investors will usually react to the changes and the fluctuations in the forex market immediately unlike the stock and the commodity markets. The changes are shown on the screen every second. Deals are done on a second to second basis.

Forex currency trading is always done in pairs and the spread is the profit

The forex trading quotes are also given in pairs and the bid and the ask rates are always mentioned together. In the pair USD/JPY, USD is the base currency. The forex currency trading that happens in non USD pairs is known as cross currency trading. The fundamental and the technical for trading in each currency pair are different.

The quote for USD/JPY will always be given as 110.3456/110.3450. This means that 1USD can be sold for 110.3456 JPY and 110.3450 JPY would be required to purchase 1USD. In forex currency trading the difference between the bid and the ask rates is the spread or the profit that the forex trader will make.

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Forex trading refers to foreign exchange trading. Here you buy and sell foreign exchanges. Contrary to the belief of people who are in the investment field, the Forex market is bigger and stronger than stock market. It accounts for more trade than stock and commodity exchanges. The dollar is the most valuable currency here closely followed by EURO. People in the forex trading love it because it allows them the unending excitement.

As we talked in the earlier paragraph forex trading refers to foreign exchange trading. The foreign exchanges of different countries are traded here. Contrary to popular belief, not all currencies traded here. The most traded currencies are the US Dollar, EURO, Sterling, Canadian Dollar, Australian Dollar, Newzealand Dollar, Japanese Yen and Swiss Franc. These currencies are traded in pairs here, ie you sell one to buy another. The US Dollar is the base currency at most times except when traded in pair with EURO and Pounds.

What makes Forex trading most exciting is its high leverage margin factor that allows people to trade 100 times more the amount they invest. You can invest 1000 dollars and trade for 100000 dollars. That makes it more exciting and it has some disadvantages too. You can make the best return on your investment owe to this factor. Forex trading as people who trade say gives more returns than any other investment.

India has not opened itself to forex trading yet. But, that did not deter people from trading in foreign exchanges. There are people who trade in foreign exchange and making nice profit. Though it is an exciting opportunity people from India have not risen to the potential in this trading. It requires you to be on your toes all the time because small changes in regulation or in the market can wipe your investment away or give you unexpected returns. My advice shall be to trade cautiously.

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The FX Trading market is now playing host to another new software application. Released only this June 2008, the Forex Tracer is settling itself comfortably in the midst of new traders and season pros all over the world. Because this technology has yet to evolve with longevity, traders are only too happy to incorporate the Forex Tracer into their own personal forex currency trading strategies.

If you a are not particularly well-versed with the FX trading market, here is an overview. The FX trading market, or more commonly known as the forex, is a financial market where foreign currencies are traded with one another for profits. For example, the yen is currently strong against the dollar now, so if you were a trader, you would find this time to sell your virtual stash of yen in US dollar currencies. If the yen is weak at any particular time, then that would be the best time to buy a lot of yen, with hopes of selling it with a substantial profit much late on. This is but one of the many forex currency trading strategies that traders employ.

The Forex Tracer has one innovation that many online traders find attractive. Aside from a 24/7 monitoring system which allows the trader ready information about movements in the financial market; this software also has an autopilot for trading. Simply put, given a set of margins or parameters, the software is able to trade currencies in behalf of an absent trader. This means that any trader can catch a few hours of sleep and still be complacent of the fact that the software is trading currencies for him or her.

Do you want the very best forex trading robot? Well I have some good news for you, I bought and tested the top 7 forex software’s and put a review of the top 2 on my website: ForexTradingReview.Info. I made over 900 dollars a day with one of the softwares listed on that site. Just Imagine if you purchase a couple of profitable softwares!

You have to be very careful when purchasing a software though. Some of the software’s just sit around and never make you any money. If you want to make thousands every week with forex I suggest you take a look at the website: Forex Trading Review

It is hard to believe, that events in a small country with a population of just 320,000 people could have world wide effect. Flooded with a deluge of information during first 10 days of October, most traders probably didn’t even register what was happening in Iceland. Yet it might have been there, according to some market watchers, where the current financial turmoil began.

Over last few years Icelandic Krona has been very high yielding currency, paying more than 15%. For this reason, it has been popular choice in the “carry” play enjoyed by many traders against mainly Japanese Yen an Swiss Franc. This pushed the ISK to lofty levels, which, in turn, helped fuel the expansion of Icelandic financial sector, especially its banks. The nations three banks established branches abroad, mainly in UK and Europe. Business flourished.

During the “unwind of carry trade” in summer last year, Krona experienced a sell off, which was seen, at the time, as temporary. However things got a lot worse earlier this year, during Bear Stern’s bailout. ISK’s slide continued and was much steeper than any other currency. With financial sector being disproportionately large relative to country’s economy, Iceland started to suffer. In fact, authorities launched an investigation into, what was seen as, hedge fund attack.

The nations three banks, Glitnir, Landsbanki and Kaupthing Bank, found it increasingly difficult to refinance debt over last two months as credit crunch shook the world. One by one banks have become insolvent and had to taken over by the Finance Ministry. Krona plummeted and the country became unable to meet banks obligation, leaving behind shocked investors and depositors. That include hundreds of thousands of people who have accounts in Icelandic banks abroad operations.

During the week of October the 10th, as financial markets were in turmoil world wide, ISK came under even more strain. Losses reached 30-40% against major currencies in just few days. The latest publicly available quote was EUR-ISK at 304, which is completely of the chart. By Friday even central banks stopped making market for Krona and trading has stopped. For all practical purposes this leaves Iceland bankrupt as a nation, first sovereign state to fall victim to this crisis.

In perhaps the most telling example of how far the troubles progressed, United Kingdom threatened legal action against Iceland as a country. The aim of such step is to recover money on UK’s citizens, which is stranded in failed banks. Great Britain could invoke anti terrorism laws in an effort to regain the funds. Such move would leave the small nation isolated in more than geographical sense.

Thankfully, probability of such drastic, panic driven measures is low. It is expected that the government of Iceland will ask International Monetary Fund for assistance. Organization has the funds to help, especially since, in global terms, the sums involved are manageable. In order to qualify for IMS intervention, country would have to accept some harsh terms and conditions. One of them might be very difficult to come to terms with, the future of Krona.

Some people argue that in order to avoid future problems of this magnitude, Iceland should apply for inclusion into European Union and adopt Euro. Since most of laws and regulations of the island nation are already compatible with EU, this would be a relatively painless process. Another option is to peg Krona to Euro. In that case, Iceland would also hand over control of monetary policy, including the setting of interest rates, to the European Central Bank.

Both of these options will be a tough choice for independent minded Iceland. Both of them would also effectively put an end to a freely floating currency. It seems, as of this writing, that Krona’s days are numbered. One less choice for Forex traders, even though little known and understood.

Mike P. Kulej is a Chief Forex Strategist for Spectrum Forex LLC. He specializes in mechanical trading systems as explained on http://www.spectrumforex.com. Spectrum Forex LLC offers numerous services to individual traders. He also publishes trading blog http://www.fxmadness.com. With questions and comments e-mail him at kulej@spectrumforex.com.

Forex Trading involves buying one currency in a currency pair, by selling the other. So if one is trading in EUR/USD, the trade may involve buying EUR by selling USD at the current market rate or vice-versa. Similarly buying EUR in EUR/GBP would require GBP to be sold.

Unlike options or stocks which have lots of companies that can be traded on, the forex market has got limited currency combinations which can be used to place the trades.

Despite this, often people wonder which currency pairs should be chosen for trading? Should it be USD based or should it be the one that is heavily volatile or should it be some other?

Lets look at few parameters which can be used to decide -

1. What is the pip spread involved - The biggest factor to be considered is the spread between the currencies. In layman’s terms, Spread is a difference between the sell price and the ask price of forex currency pairs as given by the forex broker. In other words, it is a commission of the broker or agent through which the trades are made. The lower the spread, the better it is for the forex trader. The lowest spread I have seen is in EUR/USD, which has the average spread is 2 pips to 3 pips. Typically a spread of upto 5-6 pips is good enough to trade.

2. What is the liquidity? - The more the liquidity, that means the higher is the amount of money being traded on that currency pair. So, this eventually means that that particular currency pair moves a lot in a the trading sessions. Its better to trade on such from a day trading perspective as the trades don’t need to be kept open for a longer time. I have seen that the GBP/USD is heavily liquidated. On average it moves about 100-150 pips everyday. This is followed by EUR/USD and USD/CHF.

3. How does the currency pair behaves? - Does it move technically or is it primarily fundamental driven? The one that is primarily fundamental driven doesn’t has much regard for technical analysis. I have seen JPY (Yen) as one such currency which is heavily fundamental analysis driven.

So, these are the some factors that can be used in identifying the currency pairs to be traded on. Though these factors are not an exhaustive list, they can be used as minimum basic rules. The pip spread is one important criteria. The lower, the better it is. However the currency pair should also be sufficiently liquidated as this means that there will be significant pips movement during a trading day.

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Forex is an abbreviation of Foreign Exchange, also referred to simply as FX. Forex can also be referred to as the largest financial market in the world because that’s what it really is. The volume of transactions that take place on Forex dwarfs the volume of transactions of the US stock markets quite considerably.

The Forex market is the place where currencies are being traded, meaning it is the place where currencies are being sold and bought. Currencies are money that is used as an exchange medium. They can be thought of not only as the goods you are buying, but also as the method with which you’re paying for these goods.

Trading currencies means that there are always two simultaneous transactions taking place. If one currency is being bought, another one is also being sold. In the Forex market all transactions occur in real time.

The Forex market is open 24 hours a day, five days a week. Nowadays trading takes place electronically, its activity being centered in four major cities: New York, London, Sydney, and Tokyo. The Forex market is open to individuals over the age of eighteen.

People trade one currency for another in order to make a profit off of this transaction. Profits are made when one is able to predict which currency’s value will increase by the end of a set time period. Such periods may be short or long, lasting from minutes to hours to days to months.

While Forex trading may be daunting at first, it really isn’t any more challenging than trading in stocks. It can be easily comprehended without any prior knowledge of finance or economy. Before you start trading it, you need to learn its basics, the most rudimentary of which are provided below.

1. Trading in Forex means trading in currency pairs and takes place by exchanging one element of the pair for another.
For this reason, currencies are quoted in pairs. For example, the pair of U.S. Dollar and Japanese Yen can be quoted as USD/JPY equals 105.53, which means that 1 USD can buy 105.53 JPY.

2. The first currency listed in a currency pair is called the base currency. The base currency is usually the U.S. Dollar. Traders generally trade the U.S. Dollar against another currency, which is called the counter currency.

3. When the quote increases, it implies that the base currency has risen in value and the counter currency has weakened in value. For example, if the USD/JPY quote used to be equal to 100.33 but is now equal to 105.53, then this means that the dollar has strengthened because 1 USD can now buy 105.53 JPY as opposed to the mere 100.33 JPY it could buy beforehand.

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Waldemar Puszkarz, Ph.D., is a web veteran with 15 years of web surfing under his belt. By training, he is a theoretical physicist, but his interests are much broader than science and include trading financial markets, sports betting, poker, and researching online business opportunities. He is also an avid book reader and sports afficionado. Currently he is making his living mostly as a day trader. He has been in the trading trenches for almost a decade during which he has traded a variety of financial instruments. He is the owner and webmaster of Eminimethods.com (http://www.eminimethods.com) which provides free common sense trading education and simple trading systems for e-mini and stock markets as well as reviews of honest online business opportunities in Meet HOBO section of his site.

FOREX is one of the latest crazes to sweep the planet.

Forex is one of the hottest and largest financial trading markets in the world today. The rise of the new E-economy caused online Forex trading website and firms to be able to offer trading accounts to almost anyone with a computer and an Internet connection. In our days everyone can trade currencies just like the world’s largest banks do.

The Foreign Exchange, also referred to as the “Forex” or “FX market”, is the practice of currency trading with over $2.5 trillion changing hands every single day.

Forex trading is where the currency of one nation is traded for that of another. If you have been abroad on holiday or business you have already done it. You exchanged your domestic currency for that of the currency of the country you were travelling to.

The Forex market is different though, by actively engaging in online trading using broker platforms you can buy and sell currencies for huge profits. This is because you trade with a ‘leverage’ so that even a small amount of money can quickly become a huge amount if you make the right trade.

Unlike the stock market which is ruled by those with inside knowledge, Forex gives everyone an equal footing, you can make good money even with very little experience.

The Forex goods are the currencies of various countries. You buy Euro, paying with US dollars, or you sell Japanese Yens for Canadian dollars etc. That’s all.thats how does one profit in Forex, buy cheap and sell for more! The profit is generated from the fluctuations in the currency exchange market.

There is not a central exchange for the Forex market, so these pairs and their crosses are traded over the telephone and online through a global network of banks,forex websites,brokers and currency traders.

The process is very simple and obvious,no expert knowledge of an industry is needed, that is the beauty of FOREX, thousands can be made whether you are decided to learn and experiance!

Forex is a skill that takes time to learn !!!

Forex can seem to be tough at the first instance to a new investor but once you have understood the process of the trading,then it is all about making the right decision and earning a handsome profit. with various fundamental and technical analysis tool available in the market,a careful investor can make huge profit by trading currencies. A small margin deposit can control a much larger total contract value. That Is what we call ‘Leverage’.

‘Leverage’ gives the trader the ability to make extraordinary profits and at the same time keep risk capital to a minimum. some online Forex firms offer up to 200 to 1 leverage, which means that a $100 dollar margin deposit would enable a trader to buy or sell $20,000 worth of currencies.

The exciting thing about the Forex market, is those regular daily fluctuations,an example - if the exchange rate of a pair of currencies increased by 0.6% in the last hours, your profit will be 60% on your investment!(1:100) Such can happen in a few hours or even minutes! Moreover, you cannot lose more than your “margin”! You may profit unlimited amounts, but you never lose more than what you initially risked and invested.

An exciting advantages of Forex trading is the ability to generate profits whether a currency pair is up or down, in a ‘rising’ and ‘falling’ markets. Skilled Traders do make money in this field, however like any other career, success doesn’t just happen overnight.

Most Online Forex firms offer free ‘Demo’ accounts to practice trading, along with breaking Forex news and charting services. These are very valuable resources for traders who would like to develope their trading skills with ‘virtual’ money before opening a live trading account. a new trader should practice trading on a demo account and pretend the virtual money is your own real money.Do not open a live trading account until you are profitable trading on a demo account. It is important that you learn how to buy and sell the currency pairs, set stop losses, set profit limits, and understand how leveraged margin works when you trade.

Understanding risk management is a very important reality when trading the Forex Markets. Losing trades will happen, and managing those losses are the key to your success.

Happy Trading

Ziki De Naim

Forex Trading Strategies
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The Froex was founded in 1971. Today the current turnover of the Forex is said to be between 1 and 1.5 trillion dollars a day compared to the stock market’s turnover of about 10 billion a day.

Major currencies being traded on the Forex are the US Dollar, Japanese yen, British pound, Swiss franc and the Euro.

Investors can trade on the Forex from any location, using telephone services, the Internet or secured access. Traders can also trade for long periods or decide to trade for just one day.

Another exciting fact is that the Forex market (unlike other foreign exchange services or the stock market) does not have a closing time, so you can trade 24/7 (round the clock). Forex trading includes a measure of risk. That is, you can gain a lot of money or lose money. However, you can operate on lower risks by making use of market analysis methods such as discussed below, in addition to “stop loss” and “take profit” order mechanisms available to traders.

Factors that influence the trend of the Forex market include but are not limited to transfer of capital between countries, economic factors (such as interest rate and inflation differentials, equity market flows et.c.), activities of large financial funds based on forecasts, political factors, psychological factors and market volatility (irregularity in the investment market). These factors affect the currency exchange rate and the price movements on the Forex. Two basic methods are used to analyse foreign exchange markets. These methods are frequently used to inform trading decisions on the Forex. These are:

• Technical analysis
• Fundamental analysis

Fundamental analysis involves the use of external indicators such as economic factors, political, social and psychological factors to predict price movements and trends on the Forex market.

On the other hand, technical analysis uses charts to identify price trends; these price charts are believed to have (already) taken into account the effects of external factors (such as economic, political and social factors) on prices. The implication of this is that, there is no need to study these external effects separately. Another important believe of technical analysts is that the price has a trend and this trend enables you to predict and make profitable decisions. This information leads us to the last important assumption made when using technical analysis - history repeats itself. The point being that human beings tend to react to situations in the same way they reacted when they came in contact with a similar situation in the past. All these assumptions are the bases used to analyse the Forex market and make decisions.

To trade online you need an online trading platform that includes automated online brokerage services that enables you to buy and sell via the Internet. In other words, you don’t need a physical broker; you can get an online trading platform that will provide you with all the broker services you need to trade on the Forex. There are a number of reputable broker websites online that provide this service.

One of the most common platforms is the MetaTrader 4.The MetaTrader has a user-friendly front-end trading interface. The software provides technical analysis; charts and Expert Advisors that help you build up your own trading strategy. This software is fully compatible with Forex automated trading robot. Automated trading software are developed to simplify the complication that comes with trading on the Forex; most especially to reduce risk levels and human errors while trying to analyse the market. Automated trading involves the use of Expert Advisors.

Expert Advisor are written programmes compatible with trading platform software and enables automated trading to take place without human intervention. The Advisor can notify you of profitable opportunities and also complete deals automatically on your behalf. It is important to note that you can use a demo account that does not involve real money investments to learn how the Forex works. When you are comfortable with this and you are ready to invest, you can go ahead and open a real account.

In summary, this article examined in layman’s terms, simple facts that new investors need to understand about trading on the Forex. More specifically, the article touched on the history of the Forex market, the level of risk involved, factors that influence foreign exchange rates and tools used for market analysis. We also delved into online Forex trading and what it entails.

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