Category: Forex Guide

Trading currency online is very risky and not necessarily a money making opportunity. Even professional traders lose money every so often. Luckily there is lots of help online. You are able to easily teach yourself how to trade currency in the forex market and practice if you wish to before you understand how it works.

There are many websites that will help you learn to trade currency, give you daily tips, advice and trades and may keep you updated on the news in financial markets.

Never invest money in the currency market that you cannot afford to lose. Also be sure to fully understand the market and learn how it works before you trade with real money. You can use a practice account for months to learn the ropes.

If the currency market was not profitable, then large financial companies and savvy investors such as George Soros would not invest in them. Learn how to invest wisely to protect your money.

Learn How To Trade Currency

There are many things that can be done to learn how to trade currency online. I would recommend starting out with free online guides to give you a general overview of the currency market and to learn the terminology. Many people think that trading currency is similar to trading stocks in the stock market. It is actually very different and can be much riskier.

You’ll find websites that will guide you through trading the forex market step-by-step in clear to see tutorials. You can read through them as many times as you need to.

You can even join forum groups to ask questions. Remember, there is no such thing as a dumb question, so ask as many as you need to . The currency market is very volalite, you do not want to risk your hard earned dollars on something that you don’t understand, or you could lose your money quickly.

You will need to learn the both types of trading, fundamental trading and technical trading. It is good to have a general understanding of both so that you can look for trends in the market. Technical traders depend on chart patterns and the probability of the direction of the currency. Fundamental traders base their trading on market news and financial policies that effect the value of currencies worldwide.

You will want to understand charts, choose time frames, read indicators such as bollinger bands, stochastics, relative strength and MACD. You will also want to understand how market news affects the currencies. For example when the stock market goes up, the dollar goes down.

The United States Dollar USD, Japanese Yen JPY, European Euro EUR, British Pound GBP, New Zealand Kiwi NZD and Swiss Franc CHF are most commonly traded, but you can invest in almost any currency worldwide if you have a good forex broker. The currency pair that you trade is very important. It is best to trade a pair that has a lot of movement and during a time of day that most traders are actively trading. On the east coast it is best to trade from about 9:00pm to 3:00am Sunday night through Friday morning. For west coast traders it is best to trade between 12 midnight to 6:00am Monday to Friday. Do not trade after 9:00am on Fridays.

Practice Account

Open a practice account with a major forex broker. It is best to go with a broker that is well known because there are many forex scams available and you don’t want to be taken before you even get started. mYou can open a practice account free and get started trading. You need to trade with your practice account for three to four months before attempting to trade with a regular account and real money.

You will be able to get a feel for how things work in the currency market, but you must also be aware that your practice account starts out with $50,000 dollars and most likely you will not be able to start out with that kind of cash. Because of the high amount of capitalization, you will most likely be more successful in your practice account than you may be in your actual forex trading account.

This can also provide you with some time to save up enough money to open a trading account and fund it. Although you are able to open a free account with as little as $250, you should start out with no less than $1,000 dollar and most traders would suggest at least $5,000 to begin trading.

Getting Started

You probably want to get started trading currency quickly because you’ve heard how profitable it is, but have you also heard how risky it is. Don’t jump in too quickly. You can make money in the currency market, however, you can’t do it by luck. Educate yourself first and then open a margin account with a reputable broker. You will be able to leverage you money. For example a typical leverage rate is 1:100 which means that you will be able to buy one lot of 10,000 in currency for every $100 you’ve in your account. $ 100 can go quickly if your currency goes in the wrong direction so be sure you have more money in your account or your currency will be sold out.

Seasoned traders always plan their trade and then trade their plan. Don’t let your emotions or feelings get the best of you. Use charts and indicators to reinforce your trading style.

Forex Trading Software

Most professional traders use high tech software to alarm them of trading opportunities or set ups. Luckily you will discover an array of software online that is easy to use and will help you be a profitable currency trader. It’s not necessary for you to purchase software immediately or to spend lots of money on it. Just teach me to trade first and then buy software that will fit your trading style. It is possible to find advice from other forex traders online on forums to choose the Forex BulletProof software that meets your needs.

Forex trading is basically buying one currency and selling another simultaneously, or vice versa. It has become the most popular form of trading for retail traders of any financial market in the world. As a result it’s also the largest market in the world with over $4 trillion in daily trading volume, making it larger than all the world’s stock markets put together. Are you searching for a forex Trading Guide? Continue reading..

Its popularity stems from a number of factors including high leverage and low entry barriers. Forex brokers offer their clients the highest degree of leverage available in any financial market, ranging anywhere from 20:1 to 500:1. This means that if you make a $100 deposit in your trading account, you can control a position size equivalent to $10,000 if your broker offers a leverage of 100:1. Additionally, the low entry barrier means that Forex brokers require a very low minimum deposit for retail trading accounts, with some starting as low as $25.

The Forex Market

The foreign exchange market is the only financial market that does not have a centralized exchange where trading is conducted. All trading is done through a network of banks and financial institutions, either online or via telephone. This means that as long as there is a financial center open somewhere in the world trading can continue. Therefore, due to time zones, this means that Forex trading can be conducted 24 hours a day for five days a week.

Most Forex trading is based on speculation despite the fact that there are plenty of financial and commercial transactions that take place and these involve very large amounts of money. The estimate is that more than ninety percent of transactions conducted on the Forex market are speculative, meaning that traders are looking for short-term profits from the incremental price changes taking place every second on the market.

Forex Trading: Trading Guide

Many new traders find it hard to understand the Forex market because nothing physical is actually being purchased and instead you are buying a currency and selling another simultaneously. For this reason, all currencies are traded in pairs, such as the British Pound against the US dollar or GBP/USD, where the GBP is referred to as the base currency and the USD as the counter currency.

The rate of a particular currency against another is determined by a number of factors including the economic health of the country of origin, the political situation and market psychology. In fact, you might be surprised to discover that market psychology can often have a greater impact on price than any other factor. Market psychology refers to the perceptions and behavior of the traders in the market.

Profiting from Forex trading is similar to any other type of financial trading where traders make money from the incremental movements in price that take place every second. Therefore, if you believe that the EUR/USD will rise, after analyzing the market both from a fundamental and technical viewpoint, then you can take a long position. So, if you buy the EUR/USD at 1.3450 and it moves to 1.3465, you can close your position and walk away with a 15 pip profit.

The value of a pip is determined by your position size as well as the currency pair you are trading. For the previous example, though, if you open a $10,000 position in EUR/USD, one pip will be worth $1. Therefore, you would have made a $15 profit. This might not seem like much, but considering that you can open a $10,000 position with only $100 in your account and that the market can move 15 pips in a few minutes, that’s not a bad return on your investment.

Forex trading can be a very profitable occupation but also very risky. This is why beginners should never trade with money they can’t afford to lose and you certainly should never start trading until you have learned how to analyze the markets. Likewise, you should never start trading live until you have spent a significant amount of time trading on a demo account. Once you are making a profit consistently on your demo account you can consider moving into live Forex trading. Read this and other Trading guide books and understand fully what they are saying before you get started!