Online Foreign Currency Trading For Beginners

Online foreign currency trading is attracting more and more people who want to make money online fast from home. Just about anybody who has a computer and a high speed internet connection can get involved. Some people are hoping to become financially free and work from home full time, others just want to make a little extra cash. However, foreign currency or forex (foreign exchange) trading is risky and it is important to know something about it before you start.

Online foreign currency trading involves speculating on the relative values of the different currencies of the world. For example, the TV news will often report that the dollar has either strengthened or weakened. This means that its price against other currencies has either risen or fallen. If you can predict those rises and falls, you can make money by investing in a currency that is strengthening and closing your trade for a profit.

One advantage of trading currency for the small time investor is that the forex market operates 24 hours per day during the business week. This is because it is a global market, covering all time zones. It means that it is possible to trade in your spare time, before or after work, if you have a regular job, or fit your trading around family responsibilities.

A few years ago, the forex market was entirely dominated by banks and other large financial entities that had access to currency dealing desks. Now, with the rise of the internet, this possibility has opened up to everybody. Competition between brokers means that it is now possible to get started with a very small investment. You simply sign up with a broker and access their online trading software to start trading currency.

How Does It Work?

Understanding currency forex trading and how it works is the first step in deciding whether this might be a way that you could make money. There are many attractions to the idea of currency trading as a form of investment, the main one being that it is possible to make relatively high profits in a short time, compared with most other forms of investment. However, the first point that must be made is that it carries a high risk, and nobody should jump in and start trading without understanding how the market works.

Currency trading is a way of making money by buying world currencies that rise in price, or selling those that fall. Of course, predicting the rise and fall is where the skill comes in. If theprice moves the opposite way, you will lose. For this reason some people compare it to gambling. The difference is that in currency trading you are investing in an asset that is worth something. The general public often fails to see the difference, and this can lead to a lot of misunderstandings about forex.

Forex simply means foreign exchange, so forex trading is the same as currency trading. You may also see it abbreviated to FX or 4x. It is a global market involving all of the world currencies. Trading always involves exchange, because currencies can only be bought and sold using other currencies. So traders are constantly exchanging one currency for another.

However, they do not actually take delivery of the currency that they buy. Instead they are dealing in lots which they will trade out and exchange back after the price has moved. The major part of the two trades will cancel each other out and what is left will be a profit if the price went the right way, or a loss if it did not.

Clearly it is important to have a system that allows you to analyze the market and know when to trade, and in which direction. There are many different systems and methods for forex trading. It is best to choose one to start, and work with it until you understand it thoroughly.

You can do this in a demo account where you do not have to use real money. Then if it is working for you, that’s great. If not, it might be time to look for another, but you will have the advantage of understanding the market and your own needs much better through the experience of testing out the first currency forex trading system.

Forex Chart: Category and Technique

Knowing how to use a forex chart is crucial for the forex trader.

While the forex market is certainly driven by fundamental economic  factors, commonly known as the fundamentals, most traders prefer to make their trading decisions on the basis of charts and indicators, since these are open to anybody and do not require a deep understanding of global economics, these traders are known as technical traders or chartists.

The overall style of this type of trading is technical analysis.

The first point in lining up your technical analysis tools is to ensure that you are using the type of forex chart that suits you best. All currency trading charts show price movements for a currency pair but you can change how you view them. There are three basic types of chart:

1. Line charts

Line charts simply show the closing price for each period. You could set this to show the closing price at the end of every minute, the end of every day or many different periods between. This will give one point for each period and these are joined by a line to show the direction of the price movement.

Line charts can be useful if you want a quick overview of a trend. However, they do not give much information so  very few traders would base a trading system on line charts.

2. Bar charts

Bar charts give four times as much information as a line chart. As well as the closing price, given as a notch on the right of the bar, they show the opening price with a notch on the left, and the high and the low (top and bottom points of a vertical line).

Being able to see the range of movement within a period can be very useful. It can give an indication of volatility of the currency pair, and in some cases, indicate when a retracement may be about to take place.

3. Candlestick charts

Candlesticks are the most popular type of forex chart. They show the high and low for the period in the same way as a bar chart, but the open and close prices are shown by the range of the candle body. If the open is higher than the close, i.e. the price fell during the period, the candle will be shaded in a white/shaded system or red in a green/red colored system. If the close was higher than the open, i.e. the price increased during the period, the body of the candle will be white or green.

The shading or color makes it easy to see the direction of price movement at a glance. The size of the candle body makes it equally easy to see the range of movement between the open and close. This is very helpful when looking for patterns in currency price movements. It makes it simple to spot trends, choppy markets and retracements.

Whatever type of forex chart you use, you will be able to alter the time period that point, bar or candle covers. This allows you to see price movements over a longer period or focus in to view the changes every minute. Many traders will use a second time period in the chart to check that their signal is not contradicted with a different chart setting. Of course, you can also use other technical analysis tools such as indicators to verify your decision before placing an order on the basis of your forex chart reading.

Can you auto trade Forex with United States account?

Definitely auto trading can be done with United States account but the main requirement is you have to be very cautious while trading. Using market news blindly or just following the dealer can lead you to a dangerous situation. Always try to mold the information into your requirement and analyze yourself about the trades.

You know better about yourself. The risk tolerance factor, duration, investment amount is different for every user. And the tips provided by the broker is generalized therefore keep your requirements on top and then trade with news.

I am using Finexo since long and has never faced such problem. Though this is a smooth software which provides timely updates and trading tips yet i follow news only when i make them into my requirement and get it confirmed by their experts. That is the secret of my successful trading career.

Obviously all this one learns from his own experience after facing heavy downs.

Forex Trading Courses: Choosing The Right One For You

Forex trading courses are essential for the new forex trader and also for the experienced trader looking to expand his or her horizons and learn new skills.

Often times, a trader will pick up a book or join a training program and only pick out one new point that they had not come across before, but that one small point will make a huge difference to their trading success, sometimes exponentially increasing their profits.

Soare a worthwhile investment for traders at all levels. However, it is the beginners who need more help in selecting the best course.

Practiced traders usually know what they are looking for, or at least what they are not looking for. Beginners need some assurance that the course they are considering is going to cover all of the basics that they need to know.

This means that forex courses for beginners should cover all of the basic and essential points of forex trading. That would include at least the following five topics:

1. Forex Principles and Terminology

This section should cover the basic principles of the forex market including how trading takes place and how profits are made. It should explain terms such as pips, spread, leverage etc, and should give guidance on selecting a broker.

2. Forex Fundamental Analysis

The forex market is driven by economic factors. Changes in indices that measure the economic performance of a country, such as the interest rate or the gross domestic product, are the real force between changes in the relative value of currencies. For example, an increase in the US GDP will be reflected in a rise in the value of the dollar, other things being equal. It is not necessary for a forex trader to predict the outcome of announcements about these economic indices but it is important to understand their impact.

3. Forex Technical Analysis

This is how most forex traders predict price movements. They look at charts and mathematical indicators which are provided either by brokers or by specialist charting services. Graphs such as candlestick charts record actual price movements in real time. Indicators measure factors such as the strength of a trend, whether a currency pair is overbought or oversold, etc. There are many different indicators. A trader only needs to follow those that are relevant to their particular trading system, but good forex trading courses will explain a wide range of indicators and how to use them.

4. Managing Forex Risk

Forex trading is a high risk investment strategy and surviving for the long term depends on managing risk very carefully. In order to maxmize profits, a trader must find the best balance between a risk that is too high, which will sooner or later break the bank during a bad run, and a risk that is so low that the profits are insignificant. Most traders work on a risk of between 1% and 5% per trade depending on the system used and how willing they are to risk their bank. Some professional traders with very large accounts would be even more cautious with a risk of around 0.5%.

5. Forex Trading Psychology

The mindset of a successful trader is probably the most important aspect to develop for the beginner. Without this it would be difficult to make money in forex, even with the best system in the world. The secret to success in forex is being able to maintain discipline and consistency under stress. This means keeping a cool head and not letting fear, excitement or other emotions influence trading. To some extent this will come with experience but there are also techniques that you can use to develop your trading mindset. Good forex courses will cover this and it is important not to skip this section.

Foreign Exchange Training: How To Use The News

Using the financial and economic news is an aspect of foreign exchange training that can be profitable for forex traders, and yet for one reason or another it is often neglected. Most people who start out trading are over eager to get into live trading as soon as possible and they skip a lot of important points in the rush to make (or more likely, lose) money. In order to profit with forex trading, just like anything else, it is important to understand the fundamentals that drive the foreign exchange market.

The market is driven by th8945180246e comparative strength of national economies. This means that if the American economy becomes stronger in comparison to the British economy, the value of the dollar will rise against the pound. However, because the forex market is based on exchange, everything is relative. If the Japanese economy strengthens at the same time and to a greater degree, the dollar could fall against the yen at the same time that it rises against the pound.

In order to predict currency price movements on the basis of fundamental analysis, it is necessary to have an eye on certain factors. Interest rates and the national Gross Domestic Product (GDP) are the strongest influences on the forex market but there are many other indices too. These include the retail price index, manufacturing costs and orders, employment and payroll figures, etc.

Most of these figures are calculated and announced at regular intervals. There may be monthly, quarterly or annual announcements, and it is important to be aware when these are going to happen. Interest rate changes are different in that they will happen whenever a country’s central bank decides that a rise or cut in the interest rate is necessary.

For most retail forex traders working from home, it is difficult to predict the direction of these announcements other than what is reported in the financial press or online. However, it is important that traders keep themselves informed. The announcement itself will tend to be a time of high volatility in the market and even speculation before the figures are released can have a strong influence on the market.

So traders need to know when these financial reports are happening and either understand how to use them, or stay out of the market altogether at those times. For beginners the latter course of action is usually recommended. This means being aware of the forex calendar and closing trades some time before a major announcement is due.

So it is worth taking some time to understand the forex news and how it affects the currency market before starting to trade. Even traders who plan to trade entirely on the basis of technical analysis need to cover this in their foreign exchange training in order to avoid being caught out.

Know More Forex Broker Tricks

You need to understand that forex brokers are above all marketing machines. Forex brokers continuously require a flow of new clients, since many retail forex traders don’t survive longer than a few months. After losing, more than 90% simply quit and give up forex trading.

For enticing new clients, vast sums of money are spent on advertising by forex brokers. You can check this fact by going on Google and typing any forex related keyword. Almost all the ads will be by forex brokers. Each click costs them around $1.

Most popular way used by brokers to make you trade more and more and burn your money is to announce monthly Forex Trading Contests. Cash prizes of $2000, $1000 or $500 are announced.

In order to win, many small traders get wiped out; losing their money. This is just a trick fx brokers use to make you trade more. The more you trade, the more money your broker makes. This trick is similar to a lottery.

Forex brokers are free to offer any price to their clients. Most of the brokers get price quotes from the interbank market with a 1 pip or even lower spread. To this pip spread they add 2 or 3 or even more pips as the price quote to their clients.

These 3 or 4 pips are the risk free profits that the brokers make for each round trip trade. You see why fx brokers are giving you free platforms and trading signals, only to make you start trading as soon as possible. Your broker will make more risk free money, the more you trade!

There is a practice used by forex brokers called Price Shading. For example, if the broker is convinced that Euro is on an uptrend and its price is going to rise, the broker will shade his price quote slightly higher to take advantage of the likely increase in Euro price.

One of the best tricks that forex brokers use is Stop Loss Tripping. If they find many stop losses at a particular level, there will be a momentary blip in the price feed to take out most of the stop losses.

You can’t do anything. It was a momentary spike, so small that it only tripped the stop losses.

Since, there is no central exchange to compare moment by moment prices, your broker can offer any excuse like there was sudden large order in the market or the broker feed is much faster and reflects true interbank rates.

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Try these 1500 pips a day Forex Signals. Discover a revolutionary Forex Robot Trading System!

Managed Forex Trading: The Quick And Easy Way To Make Money With Currency Trading?

Managed forex trading can be an attractive option if you want to make money from the lucrative currency trading market but do not have the time or inclination to learn to trade for yourself. With managed forex accounts, somebody else will trade for you.

Of course you will pay commission in some form, but an experienced forex trader is likely to make a lot more money than a raw beginner, so it can still be very profitable. In addition, you do not have to spend hours every day looking at charts and analyzing currency prices on the internet.

Managed Forex Trading Risks

But is it really so easy? What are the risks involved in managed forex trading?

First, it is important to understand that all speculative trading is risky, whether it is in stocks, currencies, commodities or anything else. Nobody makes money on every trade, and that includes the most successful professional traders. So there is a risk that your manager will make losses on your behalf. However, it is true that their results are likely to be better than yours in the medium to long term, even if there are times when things do not go so well.

Second, be aware that for a standard forex managed account the minimum investment can be high. This is because a trader is normally trading your account for you on a commission basis.

Clearly, the more money you have in the account, the bigger the expected returns and the more commission he can expect to make. You can see that it would not be worth his time to deal with an account balance of a couple of thousand dollars.

Standard Managed Forex Trading Account

However, there is another option. In the case of a standard managed forex account, your money is held in a separate account that you can view and have access to. But there is another way of investing in managed forex trading which is called a pooled account.

Here your money goes into a pool with other clients’ funds, to be traded all together. In this situation it does not matter how much your individual funds are and the company will usually accept small investments.

There is more of a risk with pooled accounts in that you cannot see what is happening. You have to trust that the funds are being held safely and the results are accurate. It is very important to check up on the background of the company and particularly, whether they are members of any regulatory bodies that will protect you in the event of a failure or crash. There is a real risk of scams with unregulated managed forex trading, so do your