Sabtu, 04 Agustus 2012

“How To” Start Trading The Forex Market?

What is FOREX or Foreign Exchange? PART I

The foreign exchange market (also known as Forex or FX market) is the largest financial market in the world, with over $ 1.5 trillion daily change of ownership.

It's bigger than all capital Treasury and U.S. markets combined!

Unlike other financial markets that operate in a centralized location (ie stock exchange), the Forex market in the world has no central location. This is a global electronic network of banks, financial institutions and individual traders, all involved in buying and selling currencies. Another important feature of the Forex market is that it operates 24 hours a day, according to the opening and closing of financial centers in countries around the world, starting each day in Sydney, then Tokyo, London and New York . At any time, anywhere there are buyers and sellers so that the currency market the most liquid market in the world.

Traditionally, access to the forex market was made available to only large banks and other financial institutions. With advances in technology over the years, however, the Forex market is now available for everyone, managers of banks, individual traders trading retail accounts. The time to get involved in this exciting global market has never been better than now. Open an account and become an active player in the biggest market in the world.

The forex market is very different than trading currencies on the futures market, and much easier than trading stocks or commodities.

Whether consciously or not, you already have a role in the foreign exchange market. Just because you have money in your pocket makes you an investor in the currency, especially in the U.S. dollar. Taking into U.S. Dollars, you have not chosen to hold the currencies of other countries. Your purchases of stocks, bonds or other investments, and money in your bank account, investments, contributing greatly to the integrity of the value of their denominated currency ¨ the U.S. Dollar. Because the value of dollar fluctuations and fluctuations in exchange rates can change your investments resulting in value, your overall financial situation. In this context, it is not surprising that many investors took advantage of fluctuating exchange rates, volatility of the exchange market as a means to increase their capital.

Example: Suppose you have $ 1000 and bought Euros when the exchange rate was € 1.50 per dollar. You would then have 1500 Euros. The value of the euro against the U.S. dollar is then raised, you would sell (exchange) your Euros for dollars and dollars more than the beginning.


Maybe you will find:

EUR / USD last trade 1.5000 means
One euro is worth $ 1.50.

The first currency (in this example, the EURO) is the base currency as the currency and the second (/ USD) or as a counter variable.

The FOREX plays a vital role in the global economy and there will always be a huge need for currency exchange. International trade increases the increases in technology and communication. As long as there is international trade, it will be a foreign exchange market. The foreign exchange market must exist so a country like Germany can sell products in the U.S. and be able to receive Euros in exchange for U.S. dollars.

Risk Warning:

The risks of forex trading

Forex margin trading is an extremely risky form of investment and is only suitable for individuals and institutions, which provides potential losses. An account with a broker, you can exchange foreign currencies on a highly leveraged basis (up to 400 times your account equity). Funds in an account that is trading is the leverage may be completely lost if the item (s) in the account of the experience even a swing instead of a per cent of its value. Given the possibility of losing the entire investment, speculation in the foreign exchange market, the market will be undertaken with risk capital funds that if lost, will have no material financial impact on the well -be investors.

Selasa, 01 Januari 2008

Currency Trading Success - Knowledge Is NOT the Key to Success

by Kelly Price

It always amazes me that people say that you need to learn lots of knowledge to enjoy currency trading success and its simply not true - you have to get the right knowledge and forex education and that should only take A week or so. Here we will look at the education you need.

Currency trading is essentially simple - anyone can learn to be a trader, but the fact is 95% of traders lose - so why is it that if everyone can learn currency trading don't most succeed?

Most traders fail to understand this equation:

Robust Method + Traded with discipline = Currency Trading Success

Let's look at this equation in more detail...

It's a fact that simple systems beat complicated ones, as they are more robust in the face of ever changing market conditions.

A complicated one simply has too many elements and they break.

Keep It Simple!

People make the mistake of thinking the harder they work, the more money they will make - but you don't get paid for hours of input. In currency trading, you get paid for being RIGHT with your currency trading signal and that's it.

Simple systems also have the benefit of being easier to understand and from understanding comes in and this means they are easier to apply with discipline.

If you don't have the confidence to apply your system with discipline, you have no currency trading system at all!

Its discipline which most traders lack and this comes from sometimes working to hard or just as bad following someone else's trading system without understanding it.

Today we like to think we can simply follow an expert or throw knowledge at a problem to solve it but in forex trading this is not the way to succeed.

An Illustration
A story that always influenced my trading was when I read about the turtle experiment which took place in 1983.

The essence of the experiment was to prove that anyone could learn to trade and legendary trader Richard Dennis gathered a group of traders together from all walks of life of all ages and educational levels and taught them to trade in just 14 days

The result?
These traders went on to make Richard Dennis $100 million and become some of the most famous traders of all time.

This experiment proved that anyone could learn and the system was essentially simple - the key to its success was the rigid money management discipline that the traders used.

Currency trading is essentially simple and anyone can do it but most traders choose not to learn the right forex education or follow others.

If you want to enjoy currency trading success, keep in mind that it comes from understanding and self belief which give you the all important traits of confidence and discipline.

Is it really that simple?
It's a simple concept and totally correct and if you have the desire to enjoy currency trading success, you will learn the right education and win.

Good luck and good trading

Currency Trading System - Tips On Getting One for Profit

by Kelly Price
There are numerous currency trading systems for sale online but 95% of them are junk. There are some good ones out there and they can make you great profits, so follow the tips below and find the best currency systems.

1. Real Track Records
The first point to make is that you should if possible get a system that has a real track record that means real dollars, real trading and audited.
This may not ensure future profitability but shows the logic is probably soundly based and that the vendor has had the confidence to trade it.

2. Simulated Hypothetical Track Records
Most currency trading systems don't come with a real track record but with a simulated or hypothetical one and you need to take these for what they are:
Designed in hindsight knowing the closing prices - there is nothing wrong with back testing but you must ensure the testing was done correctly.

This is the subject of the next point:

3. Beware OF Curve Fitting
Of course it's easy to make profits if you know the forex price data already and many vendors simply make track records up and bend the system to fit the data.

When you see a track record with huge gains and low drawdown the likelihood is the vendor has bent the system rules.

It is therefore a good idea to see the system rules - do not try and trade any system you do not know the logic of.

A good currency trading will have simple rules and simple logic.
If they do and the test is realistic then they can work in real time - if their curve fitted they won't work.

Clues to curve fitted systems are:
Lots of rules, unique rules for various trading conditions and different rules, for different currencies.

Curve fitting is the major reason most forex trading systems lose.
Many traders bend the system to fit the data - without realizing but many vendors do it on purpose. This is done to show track records which are simply too good to be true to appeal to the greed of buyers - these people are not traders their normally marketing organizations.
Keep in mind if you see a track record which looks to good to be true it probably is.

They key to making money with a trading system is to follow it with discipline.
This means you MUST understand the logic it is based on to have confidence to trade it through inevitable losing periods, so you need to understand and agree with the logic.
If you don't have the discipline to follow your currency trading system, you don't have a system.
You will never follow a mechanical trading system unless you have confidence so make learning it part of your forex education.
If you follow the above tips and have realistic expectations from your currency trading system, you check the logic and you're happy with the performance and draw down then you can trade it for real and enjoy currency trading success for very little effort.

Money Management - A Forex Trader 'Must Have'!

by Martin Hayne
Money Management - what's that? If this is your response to the title of this article, then either STOP trading forex until you have learnt about it or, if you are new, do not start yet! The chances are, if you trade without any Money Management rules, you will lose your capital investment faster than the time it takes to read this article!
Forex is a leveraged product, and if you over-leverage yourself, the truth is you could be staring at a blown account in no time at all!

Therefore, it should go without saying that disciplined Money Management is an important key to not just succeeding, but surviving in Forex trading. Sadly, the temptation of riches can wreak havoc with even the most disciplined people out there! In fact, the determination to succeed and be wealthy may just be the one thing that causes a person to relax their own Money Management rules! 'Speed up the path to the intended destination' will be the justification in their mind!

I know it, because I personally fell foul of just that! So certain that the trade I was going to put on could go in only one direction, I calculated that if I increased my trade size for this particular trade, I could then go on and move up legitimately to a larger trade size for all future trades (by legitimately, I mean according to my Money Management rules). Brilliant! I'm sure this is the type of risk these successful guys take every now and again. After all, you have to take bigger risks sometimes if you want to make it! Well, I'm pretty sure I don't have to tell you what happened next!!

So, here I was, now in a position where I now had to decrease the size of my future trades, to account for the huge hit I had just taken on that one trade. And not only that, to make matters worse, I exited the trade early because I did not want to take the 'full hit' of it reaching my pre-determined Stop Loss!

Yep! You've probably got the next bit too! The trade didn't make it to my intended Stop Loss, and actually would have been a successful trade if I had followed the rules of my strategy! I had just gone down the ladder several rungs in a 'calculated' attempt to move myself up a few rungs. It would now take several weeks of SUCCESSFUL trading to get back to the trade size I had been taking that day!

So, the first thing I did that day to cause such a hole in my account was throw away my Money Management rules. However, that wasn't all that followed! Through just that one act, I lost all sense of discipline, and also didn't follow my trade strategy. By exiting early, I hadn't given the trade a chance to succeed according to my entry and exit rules for that trade. Now, had I adhered to my money management rules, and applied my normal trade size, I would not have been concerned by the trade potentially hitting my Stop Loss, and therefore would have remained in the trade, and been in a position to record a successful outcome, and not a rather large losing one!

I tell this story not for entertainment value, but to share a lesson on how disciplined you have to be at all times in Forex Trading. My discipline here had succumbed to the emotions of greed and fear, and I paid dearly for it. What I'm telling you here is, if you allow just one area of your trading to 'relax' against your predetermined Trading Rules, no matter how valid you think your reasons are, there is a very high probability you will pay the price. You will likely need to break other rules too.

I would ask you to think about this....Your Trading Plan will have been created while in an environment of calm and rational thinking, based on information, knowledge and facts. When you are trading Forex, the environment is neither calm nor rational, and the only thing that can keep you trading calmly and rationally, is to be disciplined enough to follow the rules of your Trading Plan - and in that, Money Management will be clearly defined.

Your adherence to your Money Management rules, and the power of compounding will help move the odds of reaching your trading goals in your favour!

Remember that!..

Minggu, 30 Desember 2007

The Great Things with Forex Mini Trading

by George Peters

For most people, participating in any forex trading seem to entail or involve a huge startup capital, thus discouraging them from accepting any proposal to trade in forex. These people would remain trading shares and stocks, which they perceive are more viable for their financial capability. But, there is a very good option for people who want to be in forex trading but have little capital -- forex mini trading.

The great thing about this is that one can earn a lot of profit as well as set time for pleasure when participating in forex mini trading. This uses a different leverage calculation than regular forex trading, though both are more or less the same in features.
With regular forex trading, 100,000 currency units is the size of the currency lots. Forex mini trading, on the other hand, will only entail 10,000 currency units, or just a tenth of the currency lot of regular forex trading. This results in lesser risks if one stands to lose.
This is how forex mini trading can work for you:

1. It has a low minimum starting capital. It only takes $300 to start a forex mini account. This is, in fact, very affordable for people who want to get into forex trading. With this investment, one can have the potential of earning profits in a very short time.

2. You can get a high leverage of up to 200:1 in a forex mini account. A small margin deposit requirement of $50 per lot traded is given. A high leverage is a great way to achieve a huge profit in a short time, and this is evident in forex mini trading.

3. In forex trading, one pip is equal to one dollar. There is only a small amount of risk when one trades in pips. For example, if one has a 30-pip floating loss, this amounts to only $30 in losses, which is smaller than a $300 loss in a 100K account. This makes the trader more disciplined in his dealings.

4. You can start with smaller trade sizes. The contract size in forex mini trading is 10,000 units, which is only a tenth of the standard account. This allows less risk in trading. One can increase trading as he or she gains valuable experience. This would mean more profits in the future since one has acquired discipline in trading from the very beginning.

Though you may only be trading with a mini account, all the benefits associated will full-size forex trading account will be enjoyed by the trader. This includes the modern trading software, resources, charts and so much more. As mentioned above, forex mini trading is ideal for beginners to forex trading since they can develop discipline and rationality in trading as well as lessen their losses.