“How To” Start Trading The Forex Market?

What Is FOREX or FOREX MARKET? PART I

The Foreign Exchange market (also referred to as the Forex or FX market) is the largest financial market in the world, with over $1.5 trillion changing hands every day.

That is larger than all US equity and Treasury markets combined!

Unlike other financial markets that operate at a centralized location (i.e. stock exchange), the worldwide Forex market has no central location. It is a global electronic network of banks, financial institutions and individual traders, all involved in the buying and selling of national currencies. Another major feature of the Forex market is that it operates 24 hours a day, corresponding to the opening and closing of financial centers in countries all across the world, starting each day in Sydney, then Tokyo, London and New York. At any time, in any location, there are buyers and sellers, making the Forex market the most liquid market in the world.

Traditionally, access to the Forex market has been made available only to banks and other large financial institutions. With advances in technology over the years, however, the Forex market is now available to everybody, from banks to money managers to 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 largest market on the planet.

The Forex Market is very different than trading currencies on the futures market, and a lot easier, than trading stocks or commodities.

Whether you are aware of it or not, you already play a role in the Forex market. The simple fact that you have money in your pocket makes you an investor in currency, particularly in the US Dollar. By holding US Dollars, you have elected not to hold the currencies of other nations. Your purchases of stocks, bonds or other investments, along with money deposited in your bank account, represent investments that rely heavily on the integrity of the value of their denominated currency ¨the US Dollar. Due to the changing value of the US Dollar and the resulting fluctuations in exchange rates, your investments may change in value, affecting your overall financial status. With this in mind, it should be no surprise that many investors have taken advantage of the fluctuation in Exchange Rates, using the volatility of the Foreign Exchange market as a way to increase their capital.

Example: suppose you had $1000 and bought Euros when the exchange rate was 1.50 Euros to the dollar. You would then have 1500 Euros. If the value of Euros against the US dollar increased then you would sell (exchange) your Euros for dollars and have more dollars than you started with.

Example:

You might see the following:

EUR/USD last trade 1.5000 means
One Euro is worth $1.50 US dollars.

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

The FOREX plays a vital role in the world economy and there will always be a tremendous need for the exchange of currencies. International trade increases as technology and communication increases. As long as there is international trade, there will be a FOREX market. The FX market has to exist so a country like Germany can sell products in the United States and be able to receive Euros in exchange for US Dollar.

RISK WARNING:

Risks of currency trading

Margined currency trading is an extremely risky form of investment and is only suitable for individuals and institutions capable of handling the potential losses it entails. An account with an broker allows you to trade foreign currencies on a highly leveraged basis (up to about 400 times your account equity).The funds in an account that is trading at maximum leverage may be completely lost if the position(s) held in the account experiences even a one percent swing in value. Given the possibility of losing one's entire investment, speculation in the foreign exchange market should only be conducted with risk capital funds that, if lost, will not significantly affect the investors financial well-being.

Making Money with Automatic Forex Trading Software

Money is used everyday. You use it to buy all the things necessary to make it possible to live your everyday life. You use money to purchase food, purchase gas for your car, pay for your utility bills and you use money to get your children the best education you can possibly give them.

It is a fact that money is one of the most important things in life. This is why there are trading systems available that trade world currency.

Forex is the most liquid and largest financial market in the world. This market literally operates 24 hours a day, seven days a week in the whole world with trillions of dollars being exchanged everyday.

If you are a trader, you would really want to consider trading in Forex. Besides, who wouldn’t want to trade in the largest financial market in the world? It is a fact that Forex can create the possibility for you to earn high amounts of income.

There is even Forex trading softwares available to help you with your Forex trades. This type of software can really help you make money in Forex by automatically buying and selling currencies for you.

If you are a speculator, Forex automatic trading software is the best software for you. You can choose which kind of software you want. In fact, when you sign up in an online Forex trading website, some of these websites can offer you free automatic trading software as a part of their promo by opening a Forex account with them.

However, this free software that websites offer you can just be a demo package with limited features. The website will usually require you to make an extra payment for the use of the full version of the software.

There are also different Forex trading softwares available in the internet for use or for download. You might want to try out the demo version first before you buy the full version. By doing this, you can try out different Forex trading software for free and determine which software you are most comfortable using. You should consider that as a Forex trader, getting an automatic Forex trading system is essential in today’s world of Forex trading.

There are mainly two types of automatic trading software available. One is the web based programs and the other is the desktop based programs. It is up to you to choose which program you want and is also up to you to determine which program is much easier to use in assisting you with your Forex trades.

Whether you choose an online-based or desktop-based Forex trading software, you have to know that the most important factor in using this software is the internet speed. It is recommended that you should have a high speed internet connection as a simple delay in information can cause losses.

In desktop-based software, the trading data is stored in your hard drive. However, you will be responsible for the security issues like hacking, viruses, and crashing hard drives. Therefore, it is essential to devote a single personal computer for trading Forex or using computers that are especially made for trading Forex, which can be expensive.

In web-based software, security issues are a problem the provider should take care of. Since there is no required software for you to download, it is much more convenient to trade. And, web-based Forex trading software is also much more convenient for Forex traders who travel a lot. This is because you can access your Forex account anytime and anywhere you are in the world as long as there is an active internet connection.

However, in web-based software, you have to pay a minimum monthly or annual fee for maintenance unlike in desktop-based software, you usually only have to pay a one time fee for download.

Both types of software has its own advantages and disadvantages, it is up to you to determine which kind of Forex trading software can benefit you most. Try to consider your lifestyle when it comes to choosing which software you need. For example, if you travel a lot and you need to access your Forex account frequently, then the web-based software is the right software for you.

These are the things you should consider when choosing Forex trading software. As much as possible, you should choose automatic Forex trading software to really get the benefits you want. Also, choose software that will include real time data streaming to keep you up to date with the different changes in the Forex market.

Automated Forex Trading System: Faster Execution Means Increased Trade Volumes

The concept of automated Forex trading system is mind-catching.

Before the automation of the Forex market, exchange-traded futures market was the first to switch on automation. Then, the traders on the Interbank spot FX market decided to catch up with the latest trend and moved too to the new system.

Automated Forex trading system enables traders to execute their trade on spot Forex market automatically and anytime of the day, based on existing technical indicators and custom trading rules. There are various features included in the automated trading system, such as:

•    Automatic trailing stops especially if the trader is losing in a particular trade position;
•    Account equity management;
•    Stop and/or limit orders;
•    Discretionary market orders; and
•    Various technical analysis indicators within your discretion for enabling trend-following systems.

Automated Forex trading systems supports most of the following indicators (the technical support will depend on the technology used as well as the available features of the system):

•    WMA (weighted moving average);
•    EMA (exponential moving average);
•    SMA (simple moving average);
•    VMA (variable moving average);
•    TMA (triangular moving average);
•    TSMA (time series moving average);
•    WATR (wilder’s average true range);
•    VHF (vertical horizontal filter);
•    Standard deviation;
•    Trailing stops;
•    Mass index;
•    Fixed limits and stops, and others.

The success of the automation process to the Forex market is attributed to several factors, such as the following:

•    Its ability to perform or execute trades in real time. Because of the automation, a trader can close trades within a few milliseconds. It is impossible in manual systems, as previous trades are normally closed after several hours. In addition, there are also instances wherein a trader incurs several losses in a row that prevents him from making any fresh transactions. Thus, with automated Forex trading system, this problem could be avoided.

•    Its ability to greater diversification. With automated trading system now in place, a trader can trade in various local as well as international markets within varying time zones. In other words, you can place trade or close deals with different traders from various markets around the world even at the middle of the night.

•    Its ability to analyze short-term data. This feature is not available in manual trading system. Thus, traders using automated system have the bigger advantage since they can predict market trends in less than an hour.

If you will consolidate the features as well as the benefits of automated Forex trading system, it will give you a solid conclusion: with the Forex market on automation, you will be able to place more trades on a single day, thus increasing the average volume trades daily.

To further clarify the conclusion. Let us take the following scenario: If you are trading using the manual system, you will notice that it takes time before a trader confirms if he will accept your deal or not. He will look on the market condition first as well as the exchange rate of the currencies that you are trading with. Thus, if it takes time before a transaction will be finalized; there would be fewer trade volumes.

Now, if you are using the automated Forex trading system, the evaluation of exchange rates and market conditions could be done within a few minutes, since Forex data are now updated in real time. Probably after less than an hour, you will be able to take your position whether you will push through the deal or not. If a Forex transaction per trader is averaging within an hour, a single trader can place as much as 8 trades within the regular trading hours (if he is following the day trading schedule) and additional trades beyond the regular trading hours. There are thousands of traders in just a single market who can place such average number of trade per day. Combining it with the number of Forex markets around the world, the figure is just huge enough.

In addition, the technology is changing continuously, thus there is a tendency that the average number of trades per day will increase, thus a possibility of increased trade volumes on daily basis. With faster trade execution, that is a certain possibility.

Be thankful, the Forex market is now at the helm of automation. Transactions are now faster, and earning money through Forex trading is now easier.

technical analysis forex

Since the late 70s and into the millinium.
Many "engineers" have made public, their inventions of reading probabilities into Technical Indicators. Many Technical Analysis Gurus came to the forefront to sell their research findings. To name a few,
The Grand daddy being Charles Dow and his Dow theory which later lead to the creation of the Dow Jones Indexes.
Rene Descarte who introduced the Spiral studies.
Leonardo Da vincci who fostered the fabonacci principles,
W.D. Gann, who introduced Cyclic Studies of Squaring time and price.
R.N.Elliot, who introduced the Elliot Wave Studies
W.Wilders.Who introduced the mathematics of calculating overbought and oversold markets by his introduction of the DI+,DI-, ADX lines and the Relative Strength Index.
The Stocastics, MACDs, ……………………………...etc

If one was to impliment all these studies onto their charts. What you will see is a beautiful piece of art, displaying very impressive hog wash, that do nothing but dazzle the uninitiated. If anything else it 'll confuse you even more.

Then you have the charting specialist who have introduced many ways to chart eg,
Linear Charts, HiLoClose Bar Charts, Japanese candlestick charts, Point & Figuring, John Hill's Bar Chart congestion & reversal patterns, reverse point waves, pivots, fractuals, ………..etc

Today, we find lots of originally and mutated techniques and methodologies available to the Chartist or Technicians.

What many fail to realise, is that all these studies, basically are statistical tables plotted in graphic form to present a "picture" to assist traders in their decision process. The maxim being, that a picture tells a thousand words.

"It is not theirs (the charts) to reason why,
But to signal Sell or Buy,
For the traders to do or die,
Hoping that the signal does not lie,

I would, from my many years of studies, go so far as to say, that they all work, some more than others but they all do serve a purpose. (to give traders, the "guts" to do or die)
If I may borrow from the quotes of Sir Winston Chirchill.
"That you can lie to some people all the time, all people some of the time, but not to all people, all the time."
Similarly, theses studies can work in some market conditions all the time, all market conditions some of the time, but not all market conditions all of the time."

Think about what I've just quoted very carefully.

The problem with some people and some professional Technical Analyst today ( being a certified Technical Analyst myself ) is that they use the Technical studies as if, it were the "Holy Grail" of trading & their pathway to the millions.

How far that is from the truth.
Any person with a good brain on their shoulders, will ultimate come to the realisation that these are just tools. Tools that are built on historical and lagging databases. Moreover the rigidity of the parameters used in the studies imposes rigid responses to changing market conditions. Have we forgotten that the market is a live beast that learns and adapts to trader behaviours? Many have forgotten that the market is the sum total of the behaviour of the participants engaged in the market place. These tools are used for measuring the markets health, not so unlike the thermometer to a doctor, or the measuring tape to a carpenter, just a tool.

Then how is it possible that these studies themselves can be considered the "Holy Grail"?
It may be due to ignorance (being new and uniniatiated), lazyness, or just plain stubborness ( a little knowledge is a dangerous thing). Of course it is not nice for me, to tell you about those who have "a little knowledge", trying to scam those who know less than them. That's another story.
Some do so, because of a very new disease discovered recently, the sickness of "the chance".
If you use the Technical studies as your "Holy Grail", I have only one word for you, GAMBLER.

I put it to you, that, to consider your Technical Studies to be more than what they are is a "fallacy" in trading the markets, not so unlike martingale gamblers' fallacy. It can lead you to a very dark place.

What many traders do not know, or may fail to recognise, is that your success in taming the markets, is comprised of a mix of ingredients. Not so unlike in baking cakes.
I suggest three very important ingredients. One is " Market Structure ", the other is "YOU", then Capitalisation. Of course there are many more components, for the moment these seems of dominant importance, in my humble opinion.

I hope you will think about what I've said very carefully.
I shall try to push these doors ajar for you slowly to show you the light at the end of the tunnel (please hope its no on-coming train), God willing.

easy platform you want choose?

Trading is about decisions, making choices. With your easy-forex^® account, you can choose to login and trade with any of the available platforms: web, desktop and mobile. Pick and choose to match your tyle of trading. Or speak to one of our personal account managers to help you select the right platform for you.

what platform you choose?

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