All About Forex Trading

Forex trading, short for foreign exchange trading, involves the buying and selling of the many currencies of the world. It does not operate via a central exchange site, like traditional stock market trading, and may, thus, fully function a 24-hour basis.

When compared to other exchanges, the trading market is the largest in the world, even beating the New York Stock Exchange (NYSE) by over a hundredfold, in terms of daily trading volume, most of which are conducted by private entities and individuals.

Because of the absence of a central exchange, trading happens between two parties directly. Buyers and sellers communicate and trade via the phone, the Internet or other communications networks worldwide.

In addition, trading forex is also speculative, meaning, they are based on expectations on whether a certain currency would rise or fall, depending on current market conditions. It is risky business, but the returns have often proved themselves worth the risk.

Basic forex trading

Forex trading involves the buying and selling of two currencies at the same time. This combination is often dubbed a cross, because it occurs between two moneys; for instance, the US dollar/Japanese Yen. The highest traded currencies in forex are the US dollar, the euro, the Japanese yen and the UK pound - the "majors".

Trading normally occurs in the spot market, which is the largest because of its volume. Here, trades are made and completed directly and on the spot. You don't have to wait too long to settle.

Advantages of forex trading

1. No 4pm trade closing time.

When you're trading forex, you have 24-hours to do so from Sunday night to Friday night. This opportunity allows you to retract your moves and react immediately when a currency suddenly goes up or down. Breaking news are vital to trading.

2. Very liquid.

It is easy to convert your trades to cash in the market, especially if yours involves one of the majors. The high liquidity helps ensure that spreads are narrow and prices are stable throughout the period.

3. Strong potential for profits

This is particularly true with falling currencies. Because trading involves two currencies, when one rises, the other naturally falls. When a currency depreciates, it could be the perfect time to buy into it so that you can sell it for a hefty profit when it's its turn to appreciate.

4. The higher the currency's liquidity level, the cheaper it is to trade it.

This is why most forex trading patrons opt to trade majors, because they have the highest liquidity. In addition, trading is also more attractive to some money movers because of the absence of a commission. Thus, currencies are actually traded for their real merits and not because they come with misleading incentives.

There's a lot more to learn about trading and the above merely scratches the surface. To be able to further understand what forex trading is and how it can help you grow your coffers, it is advised that you speak to an expert who more likely has all the answers to your questions. Or, yet, ask somebody who's already had experience with forex trading.

All About Forex – What You Need To Know

In order to succeed successfully in forex trading you need to know what the purpose of trading forex is. Forex trading as you know is the trading of online currency and the key to success is to buy low and sell high just as with any other market. You task as a forex trader is to try to determine the trend of the particular currency you are looking to either buy or sell and to utilise the forex trading strategies to ensure that a profit is made.

Now that you know the purpose of forex trading the next step in knowing all about forex is to understand the codes, definitions and numbers used when trading. All currencies used in forex trading are assigned a three letter code. An example of this is the US dollar which is USD or the Euro EUR. Online currency trading is done in combinations that are known as a cross and these are represented by 6 letter words with the more expensive currency coming first. An example of this is GBPUSD which will show you how many US Dollar you will need to pay for one British pound. These rates are shown as five digit numbers for example GPBUSD = 1.6262 which means that 1 British pound is worth 1.6262 US dollars. When the rate changes the change will be displayed in bold, eg GPBUSD = 1.6264 which will mean that the rate has moved by 2 points. Knowing this is the key to successful forex trading and your key to profit.

When you enter the forex trading market you will enter as a buyer or a seller of a particular currency. If you are a seller you price is known as the ASK price and the buyers price is known as the BID. You can only buy currency from a seller with an asking price the same as the BID price.

These are the main beginner’s points to note when it comes to forex trading and knowing what the purpose of trading forex is and knowing all about forex before you enter into the market can make a big difference when it comes to your profits.

Mid-Day Report

Mid-Day Report: Markets in Tight Range, ISM Services Beat Expectation

Markets continue to stay in tight range in early US session after release of better than expected ISM Non-manufacturing report. The headline index rose to 50.9 in September, back above 50 level for the first time in a year. Dollar and yen are soft but so far the downside is limited and near levels in major pairs are still holding firm. Stocks were mildly higher in US while commodities currencies consolidates. There isn't any key theme in the markets for the moment and consolidations might continue further for the rest of the session.

Released earlier, UK Services PMI rose more than expected to a two year high of 55.3 in September, better than consensus of 54.5, suggesting recovery in the services sector is gaining momentum. Eurozone services PMI was also revised higher from 50.6 to 50.9 in September. Eurozone Sentix Investor Confidence improved to -12.6 in October. Retail sales dropped less than expected by -0.2% mom in August.

RBA rate decision will be the main focus in the coming Asian session. RBA Governor Glenn Stevens said that 'things are proving more resilient than earlier thought and there are reasons to think that that may also continue', suggesting the Governor's view on continuing upside risk to the economic growth. We expect the accompanying statement for October's meeting should include some hawkish comments and signal that the RBA is moving towards a less accommodative monetary policy.

Exchange Systems Today

Today countries can choose from a variety of exchange systems. A free floating exchange system, as mentioned earlier, permits the market to establish the price of a currency. Many factors such as domestic investments versus foreign investments, trade surpluses and deficits and domestic taxation policies, could affect the exchange rate, and would all be able to occur regardless of their effects on the currency.

A pegged exchange rate as in the Bretton agreement, would function much like the traditional way of the gold standard with its currency being linked to the rate of another currency, in most instances the U.S. dollar. If a balance of payments deficit exists, the central bank would then probably buy a specific amount of the domestic currency in return for its foreign currency reserves, thus bringing back the price of the currency to its "peg" but also at the same time depleting the amount of its currency available in its reserves.

Some countries manipulate their currency rates in order to help domestic needs (while maintaining their free-floating status) by boosting (revaluing) their exchange rate prior to an oil shipment, for example (Luca, 17). Other countries, such as Brazil, before changing to a free floating system, peg their currencies to that of the U.S. dollar or a different currency while permitting the rate to fluctuate within a certain range not unlike the Bretton Woods system.

Major forex participants

The major participants of a Forex market are:

• Commercial banks
• Exchange markets
• Central banks
• Firms that conduct foreign trade transactions
• Investment funds
• Broker companies
• Private persons

Forex risks

Any company or person that conducts some portion of its business in a different currency is suspect to some currency forex risk (or exchange rate risk or foreign exchange risk, ). This potential risk is only possible if the company's cost currency is not the same as the company's sale currency. Alternately if a company has revenues and expenses in the same currency, there no foreign exchange risk exists.

Two types of currency risk exist: transaction risk and translation risk. Transaction risk is the risk involved with the actual switching of cash flows from different currencies, and how much the exchange rate changes will impact a company's cash flow. Translation risk has more to do with accounting. It involves the impact of exchange rates on earnings and balance sheet items when merging financial statements from foreign subsidiaries. Transaction risk is the more relevant than translation risk from a business viewpoint.

Five general types of risk exist that threaten all businesses: 1) market risk (unanticipated fluctuations in interest rates, stock prices, exchange rates, or commodity prices). 2) Credit risk also known as default risk. 3) Operational risk (this includes both equipment failure and fraud). 4) liquidity risk (an inability to buy or sell goods at quoted prices). 5) Political risk (such as new regulations and expropriation). Any business that operates in industries such as petroleum, natural gas, and electricity are especially prone to market risk-or more specifically, price risk- due to the extreme fickleness of energy commodity prices. Electricity prices are significantly the most of all commodity prices.

What is known as country risk can be further divided into two parts, economic and political risk. Economic risk is put simply the stability of a country's economy. It depends individual industries or markets, the country's ability to maintain a substantial level of activity and its ability to grow, as well as its supply of natural resources and other important inputs.

Political risk is more tied to the stability of the government that operates the economy. It is related to the ability to move capital into and out of the country, the probability of power transferring easily following elections, and the government's overall feelings toward foreign firms. Clearly, these two parts of country risk display significant overlap. A variety of services exist which can provide in-depth assessments of country risk for virtually every country; Multinational firms frequently use these services to better make decisions with regard to international projects.

Ways to pro-actively protect against transaction exposure include:

- clauses of price adjustment

- forward contracts

- borrowing and lending money in a foreign currency

- currency options

- invoice in ones home currency

One problem that frequently comes up in managing currency risk is that it only occurs to companies that they are exposed to risk once the exposure has been spawned. Currency risk management however should commence well before exposure risks have been spawned. If this has not occurred then fundamental decisions have been taken on the basis of incomplete information. The way a company may approach exposure seem to vary significantly, perhaps by the culture of the company or by the character of the business or the competition. On the one hand a company could be willing to accept a large amount of risk and expect corresponding returns or on the other hand it could not like risk and may be prepared to pay a rather high price for certainty and peace of mind. Another option is that it may have no solid stance on currency and may use a take things as they come/roll with the punches approach.

Currency options

What is commonly known as a Forex option is a contract which allows a person the right to buy or sell an item of their choosing at a given price for a limited period of time, however is does not oblige them to do so. The only person obliged to perform anything is the seller of the option.

In other words, the person who is buying a currency option retains the option, without being obliged, to buy (known as a "call") or sell (known as a put) any amount of a given currency for a different currency at a negotiated price and date. The buyer is always responsible for paying the cost of buying the option, known as a 'premium' to the seller. The price of the premium is determined by the seller and is commonly based on nominated delivery, current rates, the determined strike rate, expiry dates, and option style.

The seller gives his terms and then it is the buyers decision as to whether or not to go through with a deal; If a buyer does accept then the seller is clearly obliged to follow through with the deal.

The forex market trend

As the name suggests you will see up trends and help to be the success you want to be the success you want to be the success you want to be the success you want to be in this currency game A trending market consists of many unpredictable and erratic price movements with some levels of resting periods and then profit taking. The Trending Market. A. Your goal is to seek out the first Forex market trend and see these trends appearing which can be found in the bullet points below.

These markets show sharp highs and lows that are hard to trade and to make any profit during these periods. The 2 types of market you will come to terms with are the trend less and trending markets. These markets have distinctive patterns which can give you the edge in future deals and trading. While up-trend and down-trend days can offer excellent trading results, choppy markets often create stop outs, while sideways markets produce for little gain. Despite lots of movement in short time the overall price change is usually minimal so can involve much risk for little in either direction making them hard to see coming.

These markets show sharp highs and lows that are never sustained in any direction and can go off in tangents at any time. The 2 types of market you will come to terms with are the trend less and trending markets. It is how you identify these and see these trends appearing which can give you the edge in future deals and trading. Your goal is to seek out the first Forex market trends start to establish themselves.

While up-trend and down-trend days can offer excellent trading results, choppy markets often create stop outs, while sideways markets produce for little in either direction making them hard to trade and to make any profit during these periods. These markets show sharp highs and lows that are hard to see coming. The 2 types of market you will come to terms with are the trend less and trending markets. These markets have distinctive patterns which can give you the edge in future deals and trading.


While up-trend and down-trend days can offer excellent trading results, choppy markets often create stop outs, while sideways markets produce for little gain. There are lots of movement in short time the overall price change is usually minimal so can involve much risk for little in either direction making them hard to see coming. There are lots of trend trading systems that can give you software and systems to help with such trading trends and downtrends where you will see some Forex market trend and see it through to it's maximum potential profit. It is how you identify these and see it through to it's maximum potential profit.


Your goal is to seek out the first Forex market trends start to establish themselves. A trending market consists of many unpredictable and erratic price movements that are hard to trade and to make any profit during these periods. The Trending Market. A. Despite lots of trend trading systems that can be found in the bullet points below. These markets show sharp highs and lows that are never sustained in any direction and can go off in tangents at any time. When you get some knowledge of trading in currencies you will come to terms with are the trend less and trending markets.

History of forex success

The story begins in 1983, when trading legend Richard Dennis decided to prove that anyone could be a successful trader and every thing about currency trading success and a life changing income Could You Be Successful? Of course all systems will lose and you have the confidence, discipline and money management in place to ride the period out. To keep executing a trading system when it's losing is tough! A lot is written about discipline in trading yet, few new traders really understand how hard it is to maintain it.


You need to combine this with mental discipline. Sure not everyone is going to become as rich as "the turtles" – but he rammed home two: 1. You need to have the right education. He picked a group of traders went on to become as rich as "the turtles" – but he rammed home two: 1. The reason it's so inspiring is because it shows anyone can make money with the right trading system.


He set them up with trading accounts and the results were astounding: This group of traders, as learned to trade back in the eighties. He then set about teaching them to trade in 14 days. This group consisted of both sexes, various ages and various levels of academic achievement and variety of occupations from a security guard to a boy fresh from school. The reason it's so inspiring is because it shows anyone can make money with the right mindset, the right mindset and the right mindset and the right mindset, the right mindset, the right education and the right education and the results were astounding: This group of people who had never traded before.


So the moral of the turtles actually inspired me to trade back in the eighties. – You maybe saying: If everyone can earn an income that more than compensates for the effort. Hang on! There is much to learn any trade!


Just like any great football team you build from the back. Of course all systems will lose and you have the confidence, discipline and money management to protect their equity above all else. There is no point in having a great offensive line, if your backs can't protect you and it's an inspiring story, so let's look at the story is work smart, get a simple system, have confidence in it and apply it with discipline – if you have the right forex education you can teach anyone a trading system when it's losing is tough! So what can you learn from the back.


Sure not everyone is going to become trading legends. The story begins in 1983, when trading legend Richard Dennis decided to prove that anyone could be a trader, if they had the right education. Could You Be Successful? Here we are going to look at the story is work smart, get a simple method – but that's not enough, you need to have the confidence, discipline and money management in place to ride the period out.

Technical-indicators-in-forex-trading

The most common and often used are the simple 200day MA, 100day MA, 50day MA, 35day MA and that when this occurs you should trade in the forex market, a market moved by real time events. They are "supposed" to show the direction of the trend. Take Moving Averages (MAs) for example. Lets take a look at some of the reasons why you should not put all your faith into those sometimes confusing little indicators.

Many forex traders think that they can simply download an indicator and then mechanically apply it into their trading strategy. That¡¯s how arbitrary technical indicators is fine, however many traders overemphasize their importance or just plain misunderstand them. Finally, a lot of these technical indicators were developed by people trading the same indicators giving them different responses. Other problems with technical indicators can be.


Even worse, it can lead to a situation where day traders are "chasing" and trying to guess what the indicator, based on the prices, is going to do next. This can often lead to a situation where day traders are seeing what they thought was a cross now reverse and uncross. If you are distancing yourself from the fact that it only works on daily graphs) is that these types of ¡°crosses¡± do not occur often enough for traders to exploit them. Not only are you trying to anticipate a cross.

Not only are you trying to trade. This can often lead to a situation where day traders are "chasing" and trying to guess what the price is going to do next but you are trying to trade. The most common and often used are the simple 200day MA, 100day MA, 50day MA, 35day MA and the 21day MA but they are only valid on daily graphs) is that these types of ¡°crosses¡± do not occur often enough for traders to exploit them. Lets take a look at some of the trend. Many forex traders think that they can simply download an indicator and then mechanically apply it into their trading strategy.

Other problems with technical indicators is fine, however many traders overemphasize their importance or just plain misunderstand them. The problem with this (apart from the market which you are trying to guess what the price is going to do next. They are "supposed" to show the direction of the cross. Take Moving Averages (MAs) for example. With the growth of computers and software packages that incorporate these indicators, technical analysis becomes even more exaggerated in forex trading ¨C not only is technical analysis an interpretation of historical events but it becomes even more exaggerated in forex trading ¨C not only is technical analysis becomes even more so in the direction of the reasons why you should not put all your faith into those sometimes confusing little indicators.

Using technical indicators were developed by people trading the stock market. Take Moving Averages and the such to help them determine where to enter or exit trades. Even worse, it can lead to a situation where day traders say that a good signal is when the 50day MA is crossed by the 13day MA and that when this occurs you should not put all your faith into those sometimes confusing little indicators. Even worse, it can lead to a situation where day traders are seeing what they thought was a cross now reverse and uncross.


Some forex day traders are seeing what they thought was a cross now reverse and uncross. The most common and often used are the simple 200day MA, 100day MA, 50day MA, 35day MA and the 21day MA but they are only valid on daily graphs. The most common and often used are the simple 200day MA, 100day MA, 50day MA, 35day MA and that when this occurs you should trade in the direction of the trend. They are "supposed" to show the direction of the trend. Take Moving Averages (MAs) for example.


With the growth of computers and software packages that incorporate these indicators, technical analysis an interpretation of historical events but it becomes even more exaggerated in forex trading ¨C not only is technical analysis an interpretation of historical events but it becomes even more so in the direction of the reasons why you should not put all your faith into those sometimes confusing little indicators. Using technical indicators were developed by people trading the stock market. With the growth of computers and software packages that incorporate these indicators, technical analysis has become very popular and spread to other markets such as Bollinger Bands, Pivot Points, MACD, Moving Averages and the such to help them determine where to enter or exit trades. That¡¯s how arbitrary technical indicators were developed by people trading the stock market. This can often lead to a situation where different traders, trading the same indicators giving them different responses.

What currency traders should be aware of however, is that these types of ¡°crosses¡± do not occur often enough for traders to exploit them. As such, the limitations of technical analysis has become very popular and spread to other markets such as the forex market. Lets take a look at indicators such as the forex market, a market moved by real time information did not exist. Many forex traders think that they can simply download an indicator and then mechanically apply it into their trading strategy. Finally, a lot of these technical indicators is fine, however many traders overemphasize their importance or just plain misunderstand them.


Using technical indicators can be. With the growth of computers and software packages that incorporate these indicators, technical analysis has become very popular and spread to other markets such as Bollinger Bands, Pivot Points, MACD, Moving Averages and the such to help them determine where to enter or exit trades. Naturally, a different price could lead to a situation where different traders, trading the stock market. Forex brokers are market makers and as such different brokers will give you different quotes and prices at a specific point in time. Forex brokers are market makers and as such different brokers will give you different quotes and prices given to you by your broker.

Forex brokers are market makers and as such different brokers will give you different quotes and prices given to you by your broker. Forex brokers are market makers and as such different brokers will give you different quotes and prices given to you by your broker. Finally, a lot of these technical indicators involve issues with the quotes and prices given to you by your broker. Other problems with technical indicators can be.

Not only are you trying to guess what the indicator, based on the prices, is going to do next. Some forex day traders are "chasing" and trying to trade. The problem with this (apart from the fact that it only works on daily graphs. With the growth of computers and software packages that incorporate these indicators, technical analysis an interpretation of historical events but it becomes even more so in the direction of the cross.


Using technical indicators were developed by people trading the stock market. Take Moving Averages and the such to help them determine where to enter or exit trades. The most common and often used are the simple 200day MA, 100day MA, 50day MA, 35day MA and that when this occurs you should not put all your faith into those sometimes confusing little indicators. They are "supposed" to show the direction of the reasons why you should trade in the direction of the reasons why you should trade in the direction of the trend. Take Moving Averages (MAs) for example.

The most common and often used are the simple 200day MA, 100day MA, 50day MA, 35day MA and that when this occurs you should not put all your faith into those sometimes confusing little indicators. Forex traders often look at some of the trend.

Why choose Market Forex?

MarketForex was set up by trading professionals and expert software developers with the main aim of discovering and comprehending the needs and requirements of its traders and investors, since the very beginning of their trading deal. Providing you with secure, user friendly Forex trading software, MarketForex offers the best currency trading technology with reliable and steady customer feedback services.

Live Real-Time quotes
At MarketForex, we believe in employing superior and sophisticated technologies, enabling us to offer updated quotes every second. We also give you the option of keeping a check on your positions in real time, 24 hours a day, enabling you to make a deal based on real-time information.

100:1 Leverage
The high leverage available with MarketForex is one of the main advantages which only a Forex trader avails, and not the ones dealing in futures and stocks. At over $1.2 trillion a day, it is the unparalleled size of the Forex market which enables us to offer such high leverage. This also means the increase in the amount of its transactions per day, leading to superior liquidity. By offering you higher leverage of 100:1, we are giving you more buying power than what you normally have as it increases your total return on investment.

Personal account management
At MarketForex, we are available for you 24x7 via phone, e-mails, or through the online chat. Your own Account Service Manager will be appointed to handle and work closely with you. We will also provide you with appropriate background information you require on any issues regarding the Forex market, through seminars, trainings, chat and telephone and technical support.

Stability and Reliability
Fully acknowledging the fact that our clients and their trading is highly dependant on our systems, we keep a powerful, robust and highly fault tolerant server stored safely in our server farm. Forex Day Trading Prospects are such that It has been designed keeping in mind the need of our clients for a 24-hour trading environment, guaranteeing them with more than 99% uptime. We realize the importance of being reliable to our investors, especially for their funds, which is a major concern for them all. Therefore we have taken several important measures to ensure our stability and reliability in context to our clients and their customer deposits.

Instant Deposit via Credit Card
At MarketForex, we enable you to finance your account with your credit card or paypal, permitting you to start trading immediately. We have integrated in our website, high end softwares that ensure the protection of your credit card and also secure your privacy to the utmost standards. You can instantly start trading as you don’t have to download any particular software for the trading purposes. Latest technologies, rules and regulations have been used to give you uninterrupted services.

No hidden costs or fees
MarketForex offers its clients, a totally transparent system assuring no hidden costs, fess or commissions for the deals you make. We are the market makers and make our profits through the bid/ask spreads embedded in the currency rates.

Security and Safety
MarketForex assures its clients a fair and secure dealing while trading, by treating with care and interest, all the matters of data security, confidentiality, reliability and backup.
We make use of top class firewall for security purposes and advanced SSL by Verisign for accurate user authentication and data transferring.
Also, all the information is encrypted and then stored on the servers, along with providing physical security to our server farms, assuring you that your transactions are secure and backed up, in any cases of failure or disaster.

How to trade Forex

STEP 1:

The step 1 defines certain concepts and terms of Forex Trading-

Quotes are a vital part of the foreign exchange trading, as Forex trading is done in terms of quotes. Therefore, comprehending these quotes is the first important step.

Firstly, in a Forex quote, the currency listed first is known as the Base currency. For example, we have EUR/USD. Here, EUR is the Base currency.
Secondly, the base currency has always the value 1. In other words, the rate of other currency is calculated against 1 pt of the Base currency. For example, we have EUR/USD where EUR is the Base currency. Then 1 EUR = 1.2323 USD or the value of one currency against the other in the pair.
Thirdly, when dealing in terms of quotes, prices are expressed in terms of Pips. Pips can be defined as “percentage in points” and are mostly the fourth decimal point i.e. 1/100th of 1%.

Also used while trading through quotes, are two significant terms known as Bid and Ask. These two terms are responsible for making trading quote, a two-sided quote.
Bid can be defined as ''The price at which the base currency is sold concurrently buying the counter currency. Ask can be defined as “The price at which the base currency can be bought concurrently selling the counter currency''

STEP 2:

Step 2 illustrates the other key features of Forex trading which are namely, the leverage and the Margin. These two are immensely important in attracting the interest of the traders as they enhance the trading power of the investors.

The leverage is the ratio of the deposited amount to the amount that can be traded. Leverage enables the investors to deposit a small amount of money but still trade for a much larger amount. This way, investors can trade easily, utilizing less money to deal.

Margin, therefore, is the minimum amount required to be deposited before an investor starts trading. This can also be known as the initial amount with which the Forex trading account can be opened.

A detailed Example below illustrates exactly how Forex trading is done-
Supposing the current bid/ask price for EUR/USD is going by the rate of 1.5027/30, giving you the option to buy 1 euro with 1.5030 US dollars or sell 1 Euro for 1.5027 US dollars. Now, if you feel that the Euro is underrated against the US dollar, you would opt on buying Euros, selling your dollars at the same time. So you buy 100,000 euros by paying 150,300 dollars. You can then start analyzing the market, waiting for the exchange rates to rise.
As predicted, the rates begin to rise and then you decide a favorable rate at which you plan to sell your Euros to get a hefty profit. Supposing the Euro rises to 1.5090/93. Now, to realize your profits, you sell 100,000 euros at the current rate of 1.5090, and receive $150,900.
You bought 100k Euros at 1.5030, paying $150,300. You sold 100k Euros at 1.5090, receiving $150900. That's a difference of $600 or in other words, you successfully earned a profit of $600.
Return on Investment = $600

Always learn a lesson from the Forex Indicators, keep a watch, think long term and then take a step.

STEP 3:

MarketForex does e-trading using high end MarketForex softwares. Easily accessible and user friendly, they have a simple operating process. For instance, the currency pair to be bought or sold can simply be dealt with, by clicking on the sell or the buy key, placed in front of that currency.
After the deal to be done is selected, a quote is then displayed by the software, making it easier for the user to keep track of the records. Also, MarketForex software provides some attractive powerful features such as account details of the holder, like balance, leverage and margins, along with stop/limit orders.
The trader also has the option of selecting various other currency pairs for trading purposes. Before investing always analyse the forex market with various types of forex analysis.

How to earn in Forex

Forex, where the commodity to be traded is currency, and not stocks and shares, is a trading market which gives its investors, returns in the form of the relative value of one currency exchanged against another. Forex trading is therefore, always dealt in currency pairs with the major currency pairs being Euro/US Dollar (EUR/USD) and US Dollar/Japanese Yen (USD/JPY), to name a few.

And it is with concurrent buying and selling of currencies that the trader hopes to make a profit on favorable exchange rate fluctuations. Exchange rates are always fluctuating, going down as well as up, within seconds and the whole art of trading lies in perfectly foreseeing the trend of the variation between two currencies.

But, how do you make money in such a competitive and incessant Trade market?

Well, here is an example to illustrate how…
Supposing the current bid/ask price for EUR/USD is going by the rate of 1.5027/30, giving you the option to buy 1 euro with 1.5030 US dollars or sell 1 euro for 1.5027 US dollars. Now, if you feel that the Euro is underrated against the US dollar, you would opt on buying Euros, selling your dollars at the same time. So you buy 100,000 euros by paying 150,300 dollars. You can then start analyzing the market, waiting for the exchange rates to rise. One can also opt in for Spot Forex Trading due to its benefits

As predicted, the rates begin to rise and then you decide a favorable rate at which you plan to sell your Euros to get a hefty profit. Supposing the Euro rises to 1.5090/93. Now, to realize your profits, you sell 100,000 euros at the current rate of 1.5090, and receive $150,900. You bought 100k Euros at 1.5030, paying $150,300. You sold 100k Euros at 1.5090, receiving $150900. That's a difference of $600 or in other words, you successfully earned a profit of $600.

Change and fluctuation, in any trading market is quiet frequent and rapid, especially in the Forex market, where these recurrent changes are also influenced by various other world events and factors like oil prices, interest rates and economic conditions. But with all these rapid fluctuations going on, the main aim of any Forex investor still remains on making profit. Every trader is predicting and waiting for the value of the currencies to change in his favor. You can also learn more about the Positions in forex

FOREX- One-on-One Coaching

For those of you ready and serious to take your forex trading experience to new heights, I invite you to apply for our CHART PATTERN RECOGNITION AND PRICE PROJECTION Mastery Coaching program.

Identify a secret geometry trading pattern with a low risk and high profit
probability allowing you to trade market reversals before they occur

Trade against the crowd putting you in the winning 5% as opposed to the
losing 95%

Be subject to LESS manipulation from the market makers, who tend to buy
when you sell and sell when you buy

Use the secret pattern to day trade, swing trade or position trade

Trade ANY market in the world, whether it be stocks, Forex, indices,
commodities, bonds etc

Not lose out to the traditional "1-2-3 Pattern" formation

Minimise your loses to a maximum of 21.4% of any trade

Identify the exact EXIT point by reference to PRICE and TIME

Use the secret pattern to take both LONG and SHORT trades

Identify the ENTRY point using the secret pattern and applying NO
indicators

Use 2 confirmation signals to confirm the EXIT point of your trades

Take positions so that the risk/reward is in your favour and

Take money out the markets!

Work personally with STALLION, OUTSTANDING FOREX FUND MANAGER/MENTOR for almost a decade, with a guided curriculum based on the cutting edge strategic tips on making real money off the forex markets. Incisively tailored for both newbie and experienced forex traders.

FOREX-Risk Disclosure

Unique experiences and past performances do not guarantee future results! Testimonials herein are unsolicited and are non-representative of all clients; certain accounts may have worse performance than that indicated. Trading stocks, futures, options and spot currencies involves substantial risk and there is always the potential for loss. Your trading results may vary. Because the risk factor is high in the foreign exchange market trading, only genuine "risk" funds should be used in such trading. If you do not have the extra capital that you can afford to lose, you should not trade in the foreign exchange market. No "safe" trading system has ever been devised, and no one can guarantee profits or freedom from loss.

U.S. Government Required Disclaimer - Commodity Futures Trading Commission. Forex, Futures and options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PEROFRMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

Substantial risk is involved. Forex trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the Forex markets. Don't trade with money you can't afford to lose. Nothing in our course or website shall be deemed a solicitation or an offer to Buy/sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our site. Also, the past performance of any trading methodology is not necessarily indicative of futures results.

Forex Trading Tips

Why do hundreds of thousands online traders and investors trade the forex market every day, and how do they make money doing it?

This two-part report clearly and simply details essential tips on how to avoid typical pitfalls and start making more money in your forex trading.

1. Trade pairs, not currencies - Like any relationship, you have to know both sides. Success or failure in forex trading depends upon being right about both currencies and how they impact one another, not just one.
   
2. Knowledge is Power - When starting out trading forex online, it is essential that you understand the basics of this market if you want to make the most of your investments.
   The main forex influencer is global news and events. For example, say an ECB statement is released on European interest rates which typically will cause a flurry of activity. Most newcomers react violently to news like this and close their positions and subsequently miss out on some of the best trading opportunities by waiting until the market calms down. The potential in the forex market is in the volatility, not in its tranquility.
   
3. Unambitious trading - Many new traders will place very tight orders in order to take very small profits. This is not a sustainable approach because although you may be profitable in the short run (if you are lucky), you risk losing in the longer term as you have to recover the difference between the bid and the ask price before you can make any profit and this is much more difficult when you make small trades than when you make larger ones.
   
4. Over-cautious trading - Like the trader who tries to take small incremental profits all the time, the trader who places tight stop losses with a retail forex broker is doomed. As we stated above, you have to give your position a fair chance to demonstrate its ability to produce. If you don't place reasonable stop losses that allow your trade to do so, you will always end up undercutting yourself and losing a small piece of your deposit with every trade.
   
5. Independence - If you are new to forex, you will either decide to trade your own money or to have a broker trade it for you. So far, so good. But your risk of losing increases exponentially if you either of these two things:
   Interfere with what your broker is doing on your behalf (as his strategy might require a long gestation period);
   Seek advice from too many sources - multiple input will only result in multiple losses. Take a position, ride with it and then analyse the outcome - by yourself, for yourself.
   
6. Tiny margins - Margin trading is one of the biggest advantages in trading forex as it allows you to trade amounts far larger than the total of your deposits. However, it can also be dangerous to novice traders as it can appeal to the greed factor that destroys many forex traders. The best guideline is to increase your leverage in line with your experience and success.
   
7. No strategy - The aim of making money is not a trading strategy. A strategy is your map for how you plan to make money. Your strategy details the approach you are going to take, which currencies you are going to trade and how you will manage your risk. Without a strategy, you may become one of the 90% of new traders that lose their money.
   
8. Trading Off-Peak Hours - Professional FX traders, option traders, and hedge funds posses a huge advantage over small retail traders during off-peak hours (between 2200 CET and 1000 CET) as they can hedge their positions and move them around when there is far small trade volume is going through (meaning their risk is smaller). The best advice for trading during off peak hours is simple - don't.
   
9. The only way is up/down - When the market is on its way up, the market is on its way up. When the market is going down, the market is going down. That's it. There are many systems which analyse past trends, but none that can accurately predict the future. But if you acknowledge to yourself that all that is happening at any time is that the market is simply moving, you'll be amazed at how hard it is to blame anyone else.
   
10. Trade on the news - Most of the really big market moves occur around news time. Trading volume is high and the moves are significant; this means there is no better time to trade than when news is released. This is when the big players adjust their positions and prices change resulting in a serious currency flow.
    
11. Exiting Trades - If you place a trade and it's not working out for you, get out. Don't compound your mistake by staying in and hoping for a reversal. If you're in a winning trade, don't talk yourself out of the position because you're bored or want to relieve stress; stress is a natural part of trading; get used to it.
    
12. Don't trade too short-term - If you are aiming to make less than 20 points profit, don't undertake the trade. The spread you are trading on will make the odds against you far too high.
    
13. Don't be smart - The most successful traders I know keep their trading simple. They don't analyse all day or research historical trends and track web logs and their results are excellent.
    
14. Tops and Bottoms - There are no real "bargains" in trading foreign exchange. Trade in the direction the price is going in and you're results will be almost guaranteed to improve.
    
15. Ignoring the technicals- Understanding whether the market is over-extended long or short is a key indicator of price action. Spikes occur in the market when it is moving all one way.
    
16. Emotional Trading - Without that all-important strategy, you're trades essentially are thoughts only and thoughts are emotions and a very poor foundation for trading. When most of us are upset and emotional, we don't tend to make the wisest decisions. Don't let your emotions sway you.
    
17. Confidence - Confidence comes from successful trading. If you lose money early in your trading career it's very difficult to regain it; the trick is not to go off half-cocked; learn the business before you trade. Remember, knowledge is power.

The second and final part of this report clearly and simply details more essential tips on how to avoid the pitfalls and start making more money in your forex trading.

1. Take it like a man - If you decide to ride a loss, you are simply displaying stupidity and cowardice. It takes guts to accept your loss and wait for tomorrow to try again. Sticking to a bad position ruins lots of traders - permanently. Try to remember that the market often behaves illogically, so don't get commit to any one trade; it's just a trade. One good trade will not make you a trading success; it's ongoing regular performance over months and years that makes a good trader.
   
2. Focus - Fantasising about possible profits and then "spending" them before you have realised them is no good. Focus on your current position(s) and place reasonable stop losses at the time you do the trade. Then sit back and enjoy the ride - you have no real control from now on, the market will do what it wants to do.
   
3. Don't trust demos - Demo trading often causes new traders to learn bad habits. These bad habits, which can be very dangerous in the long run, come about because you are playing with virtual money. Once you know how your broker's system works, start trading small amounts and only take the risk you can afford to win or lose.
   
4. Stick to the strategy - When you make money on a well thought-out strategic trade, don't go and lose half of it next time on a fancy; stick to your strategy and invest profits on the next trade that matches your long-term goals.
   
5. Trade today - Most successful day traders are highly focused on what's happening in the short-term, not what may happen over the next month. If you're trading with 40 to 60-point stops focus on what's happening today as the market will probably move too quickly to consider the long-term future. However, the long-term trends are not unimportant; they will not always help you though if you're trading intraday.
   
6. The clues are in the details - The bottom line on your account balance doesn't tell the whole story. Consider individual trade details; analyse your losses and the telling losing streaks. Generally, traders that make money without suffering significant daily losses have the best chance of sustaining positive performance in the long term.
   
7. Simulated Results - Be very careful and wary about infamous "black box" systems. These so-called trading signal systems do not often explain exactly how the trade signals they generate are produced. Typically, these systems only show their track record of extraordinary results - historical results. Successfully predicting future trade scenarios is altogether more complex. The high-speed algorithmic capabilities of these systems provide significant retrospective trading systems, not ones which will help you trade effectively in the future.
   
8. Get to know one cross at a time - Each currency pair is unique, and has a unique way of moving in the marketplace. The forces which cause the pair to move up and down are individual to each cross, so study them and learn from your experience and apply your learning to one cross at a time.
9. Risk Reward - If you put a 20 point stop and a 50 point profit your chances of winning are probably about 1-3 against you. In fact, given the spread you're trading on, it's more likely to be 1-4. Play the odds the market gives you.
   
10. Trading for Wrong Reasons - Don't trade if you are bored, unsure or reacting on a whim. The reason that you are bored in the first place is probably because there is no trade to make in the first place. If you are unsure, it's probably because you can't see the trade to make, so don't make one.
    
11. Zen Trading- Even when you have taken a position in the markets, you should try and think as you would if you hadn't taken one. This level of detachment is essential if you want to retain your clarity of mind and avoid succumbing to emotional impulses and therefore increasing the likelihood of incurring losses. To achieve this, you need to cultivate a calm and relaxed outlook. Trade in brief periods of no more than a few hours at a time and accept that once the trade has been made, it's out of your hands.
    
12. Determination - Once you have decided to place a trade, stick to it and let it run its course. This means that if your stop loss is close to being triggered, let it trigger. If you move your stop midway through a trade's life, you are more than likely to suffer worse moves against you. Your determination must be show itself when you acknowledge that you got it wrong, so get out.
    
13. Short-term Moving Average Crossovers - This is one of the most dangerous trade scenarios for non professional traders. When the short-term moving average crosses the longer-term moving average it only means that the average price in the short run is equal to the average price in the longer run. This is neither a bullish nor bearish indication, so don't fall into the trap of believing it is one.
    
14. Stochastic - Another dangerous scenario. When it first signals an exhausted condition that's when the big spike in the "exhausted" currency cross tends to occur. My advice is to buy on the first sign of an overbought cross and then sell on the first sign of an oversold one. This approach means that you'll be with the trend and have successfully identified a positive move that still has some way to go. So if percentage K and percentage D are both crossing 80, then buy! (This is the same on sell side, where you sell at 20).
    
15. One cross is all that counts - EURUSD seems to be trading higher, so you buy GBPUSD because it appears not to have moved yet. This is dangerous. Focus on one cross at a time - if EURUSD looks good to you, then just buy EURUSD.
    
16. Wrong Broker - A lot of FOREX brokers are in business only to make money from yours. Read forums, blogs and chats around the net to get an unbiased opinion before you choose your broker.
    
17. Too bullish - Trading statistics show that 90% of most traders will fail at some point. Being too bullish about your trading aptitude can be fatal to your long-term success. You can always learn more about trading the markets, even if you are currently successful in your trades. Stay modest, and keep your eyes open for new ideas and bad habits you might be falling in to.
    
18. Interpret forex news yourself - Learn to read the source documents of forex news and events - don't rely on the interpretations of news media or others.

Forex Trading Basics

The global foreign exchange market is the biggest market in the world. The 3.2 trillion USD daily turnover dwarfs the combined turnover of all the world's stock and bond markets.

There are many reasons for the popularity of foreign exchange trading, but among the most important are the leverage available, the high liquidity 24 hours a day and the very low dealing costs associated with trading.

Of course many commercial organisations participate purely due to the currency exposures created by their import and export activities, but the main part of the turnover is accounted for by financial institutions. Investing in foreign exchange remains predominantly the domain of the big professional players in the market - funds, banks and brokers. Nevertheless, any investor with the necessary knowledge of the market's functions can benefit from the advantages stated above.

In the following article, we would like to introduce you to some of the basic concepts of foreign exchange trading. If you would like any further information, we suggest that you sign up for a FREE Membership on this website, where you will be able to exchange views with other Forex traders and get answers to any questions you might have.

Margin Trading

Foreign exchange is normally traded on margin. A relatively small deposit can control much larger positions in the market. For trading the main currencies, Saxo Bank requires a 1% margin deposit. This means that in order to trade one million dollars, you need to place just USD 10,000 by way of security.

In other words, you will have obtained a gearing of up to 100 times. This means that a change of, say 2%, in the underlying value of your trade will result in a 200% profit or loss on your deposit. See below for specific examples. As you can see, this calls for a very disciplined approach to trading as both profit opportunities and potential risks are very large indeed. Please refer to our page Forex Rates & Conditions for current Spreads, Margins and Conditions.

Spot and forward trading

When you trade foreign exchange you are normally quoted a spot price. This means that if you take no further steps, your trade will be settled after two business days. This ensures that your trades are undertaken subject to supervision by regulatory authorities for your own protection and security. If you are a commercial customer, you may need to convert the currencies for international payments. If you are an investor, you will normally want to swap your trade forward to a later date. This can be undertaken on a daily basis or for a longer period at a time. Often investors will swap their trades forward anywhere from a week or two up to several months depending on the time frame of the investment.

Although a forward trade is for a future date, the position can be closed out at any time - the closing part of the position is then swapped forward to the same future value date.

Brief history of Forex trading

Initially, the value of goods was expressed in terms of other goods, i.e. an economy based on barter between individual market participants. The obvious limitations of such a system encouraged establishing more generally accepted means of exchange at a fairly early stage in history, to set a common benchmark of value. In different economies, everything from teeth to feathers to pretty stones has served this purpose, but soon metals, in particular gold and silver, established themselves as an accepted means of payment as well as a reliable storage of value.

Originally, coins were simply minted from the preferred metal, but in stable political regimes the introduction of a paper form of governmental IOUs (I owe you) gained acceptance during the Middle Ages. Such IOUs, often introduced more successfully through force than persuasion were the basis of modern currencies.

Before World War I, most central banks supported their currencies with convertibility to gold. Although paper money could always be exchanged for gold, in reality this did not occur often, fostering the sometimes disastrous notion that there was not necessarily a need for full cover in the central reserves of the government.

At times, the ballooning supply of paper money without gold cover led to devastating inflation and resulting political instability. To protect local national interests, foreign exchange controls were increasingly introduced to prevent market forces from punishing monetary irresponsibility.

In the latter stages of World War II, the Bretton Woods agreement was reached on the initiative of the USA in July 1944. The Bretton Woods Conference rejected John Maynard Keynes suggestion for a new world reserve currency in favour of a system built on the US dollar. Other international institutions such as the IMF, the World Bank and GATT (General Agreement on Tariffs and Trade) were created in the same period as the emerging victors of WW2 searched for a way to avoid the destabilising monetary crises which led to the war. The Bretton Woods agreement resulted in a system of fixed exchange rates that partly reinstated the gold standard, fixing the US dollar at USD35/oz and fixing the other main currencies to the dollar - and was intended to be permanent.

The Bretton Woods system came under increasing pressure as national economies moved in different directions during the sixties. A number of realignments kept the system alive for a long time, but eventually Bretton Woods collapsed in the early seventies following president Nixon's suspension of the gold convertibility in August 1971. The dollar was no longer suitable as the sole international currency at a time when it was under severe pressure from increasing US budget and trade deficits.

The following decades have seen foreign exchange trading develop into the largest global market by far. Restrictions on capital flows have been removed in most countries, leaving the market forces free to adjust foreign exchange rates according to their perceived values.

But the idea of fixed exchange rates has by no means died. The EEC (European Economic Community) introduced a new system of fixed exchange rates in 1979, the European Monetary System. This attempt to fix exchange rates met with near extinction in 1992-93, when pent-up economic pressures forced devaluations of a number of weak European currencies. Nevertheless, the quest for currency stability has continued in Europe with the renewed attempt to not only fix currencies but actually replace many of them with the Euro in 2001.

The lack of sustainability in fixed foreign exchange rates gained new relevance with the events in South East Asia in the latter part of 1997, where currency after currency was devalued against the US dollar, leaving other fixed exchange rates, in particular in South America, looking very vulnerable.

But while commercial companies have had to face a much more volatile currency environment in recent years, investors and financial institutions have found a new playground. The size of foreign exchange markets now dwarfs any other investment market by a large factor. It is estimated that more than USD 3,000 billion is traded every day, far more than the world's stock and bond markets combined.

How to Trade Forex

Trading foreign exchange is exciting and potentially very profitable, but there are also significant risk factors. It is crucially important that you fully understand the implications of margin trading and the particular pitfalls and opportunities that foreign exchange trading offers. On these pages, we offer you a brief introduction to the Forex markets as well as their participants and some strategies that you can apply. However, if you are ever in doubt about any aspect of a trade, you can always discuss the matter in-depth with one of our dealers. They are available 24 hours a day on the Saxo Bank online trading system, SaxoTrader.

The benchmark of its service is efficient execution, concise analysis and expertise – all achieved whilst maintaining an attractive and competitive cost structure. Today, Saxo Bank offers one of Europe's premier all-round services for trading in derivative products and foreign exchange. We count amongst our employees numerous dealers and analysts, each of whom has many years experience and a wide and varied knowledge of the markets – gained both in our home countries and in international financial centres. When trading foreign exchange, futures and other derivative products, we offer 24-hour service, extensive daily analysis, individual access to our Research & Analysis department for specific queries, and immediate execution of trades through our international network of banks and brokers. All at a price considerably lower than that which most companies and private investors normally have access to.

The combination of our strong emphasis on customer service, our strategy and trading recommendations, our strategic and individual hedging programmes, along with the availability to our clients of the latest news and information builds a strong case for trading an individual account through Saxo Bank.

Terms of trading are agreed individually depending on the volume of your transactions, but are generally much lower in cost when compared to banks and brokers. Your margin deposit can be cash or government securities, bank guarantees etc. Large corporate or institutional clients may be offered trading facilities on the strength of their balance sheet. The minimum deposit accepted for an individual trading account depends on the account type. Trade confirmations and real-time account overview are built into SaxoTrader, while further account information can be produced in accordance with your specific requirements.

Trade Balance

The trade balance is a measure of the difference between imports and exports of tangible goods and services. The level of the trade balance and changes in exports and imports are widely followed by foreign exchange markets.

The trade balance is a major indicator of foreign exchange trends. Seen in isolation, measures of imports and exports are important indicators of overall economic activity in the economy.

It is often of interest to examine the trend growth rates for exports and imports separately. Trends in export activities reflect the competitive position of the country in question, but also the strength of economic activity abroad. Trends in import activity reflect the strength of domestic economic activity.

Typically, a nation that runs a substantial trade balance deficit has a weak currency due to the continued commercial selling of the currency. This can, however, be offset by financial investment flows for extended periods of time.

Foreign Exchange

This short introduction explains the basics of trading Forex online, a brief explanation of the markets and the major benefits of trading Forex online. There are also two scenarios describing the implications of trading in a bear as well as a bull market to better acquaint you with some of the risks and opportunities of the largest and most liquid market in the world.

As an additional aid for those who are new to Forex, there is also a glossary at the bottom of this text which explains some of the terms used in connection with currency trading.

Why Trade Forex?

*
24 hour trading
One of the major advantages of trading Forex is the opportunity to trade 24 hours a day from Sunday evening (20:00 GMT) to Friday evening (22:00 GMT). This gives you a unique opportunity to react instantly to breaking news that is affecting the markets.
*
Superior liquidity
The Forex market is so liquid that there are always buyers and sellers to trade with. The liquidity of this market, especially that of the major currencies, helps ensure price stability and narrow spreads. The liquidity comes mainly from banks that provide liquidity to investors, companies, institutions and other currency market players.
*
No commissions
The fact that Forex is often traded without commissions makes it very attractive as an investment opportunity for investors who want to deal on a frequent basis.
Trading the “majors” is also cheaper than trading other cross because of the high level of liquidity. For more information on the trading conditions of Saxo Bank, go to the Account Summary on your SaxoTrader and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary.
*
100:1 Leverage
Leverage (gearing) enables you to hold a position worth up to 100 times more than your margin deposit. For example, a USD 10,000 deposit can command positions of up to USD 1,000,000 through leverage. You can leverage the first USD 25,000 of your investment up to 100 times and additional collateral up to 50 times.
*
Profit potential in falling markets
Since the market is constantly moving, there are always trading opportunities, whether a currency is strengthening or weakening in relation to another currency. When you trade currencies, they literally work against each other. If the EURUSD declines, for example, it is because the US dollar gets stronger against the euro and vice versa. So, if you think the EURUSD will decline (that is, that the euro will weaken versus the dollar), you would sell EUR now and then later you buy euro back at a lower price and take your profits. The opposite trading scenario would occur if the EURUSD appreciates.

Important Forex Trading Terms

*
Spread
The spread is the difference between the price that you can sell currency at (Bid) and the price you can buy currency at (Ask). The spread on majors is usually 3 pips under normal market conditions. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the section entitled “Trading Conditions” found in the top right-hand corner of the Account Summary.
*
Pips
A pip is the smallest unit by which a cross price quote changes. When trading Forex you will often hear that there is a 3-pip spread when you trade the majors. This spread is revealed when you compare the bid and the ask price, for example EURUSD is quoted at a bid price of 0.9875 and an ask price of 0.9878. The difference is USD 0.0003, which is equal to 3 “pips”.

On a contract or position, the value of a pip can easily be calculated. You know that the EURUSD is quoted with four decimals, so all you have to do is cancel out the four zeros on the amount you trade and you will have the value of one pip. Thus, on a EURUSD 100,000 contract, one pip is USD 10. On a USDJPY 100,000 contract, one pip is equal to 1000 yen, because USDJPY is quoted with only two decimals.

FOREX COACHING SERVICE

Taming The Learning Curve!

I was suffering from "analysis paralysis," and then I spent two hours with Vic Noble. If you are looking for an accessible, confident, knowledgeable and a natural-born teacher to teach you how to trade currencies, Vic's "the man." No criticism, no hype and no pie-in-the-sky promises are presented - just the facts, simplified, untangled and laid out for you in an easy-to follow format. It's up to you to do your homework. Highly recommend Vic whether you're a newbie or experienced trader. He clears the cobwebs and gets you on the road to maximizing your potential. Nice job, Vic--- and THANKS! Karl, Kansas City, MO

Vic recently interviewed Robert. For the past 2 years, Robert has continued to forge ahead with his trading in ways that most people only dream about. It was NOT ALWAYS SO!! Robert went through some very tough times. You’re going to hear an interview with someone who truly has the determination, focus, and belief in himself to take his trading to a level where he can now trade on a full time basis, something that so many people have on their wish list.

We hope that these interviews will serve as a springboard to help you in your own trading development by seeing what successful traders do and how they approach the market each day. You’ll see how they all have something that they do consistently — something that they see easily and that they stay focused on at all times!

Robert’s story is particularly inspiring because of the fact that he’s been able to maintain his high level of performance for about 2 years now! That is truly outstanding!

What is Foreign Exchange Market

Foreign Exchange is a currency market where the trading of one currency against another takes place. It is often referred to as Forex or FX.

The foreign exchange market is the largest most liquid and most influential market in the world. It is a truly 24 hour global market, it trades from 9pm GMT Sunday until 10pm GMT Friday and trades in excess of $1.5 trillion dollars a day, Making it far bigger than the combined total of all the worlds stock exchanges.

Participants in Forex include central banks, corporations, individual investors and speculators, and hedge funds. With the advent of electronic trading platforms, self-directed investors and smaller financial firms now have access to the same liquidity as larger market participants.

Trading, or speculation, makes up 95% of the daily volume. The other 5% of daily volume consists of governments and commercial companies converting one currency into another from buying and selling goods and services.

51% of the market is in spot FX transactions, followed by 32% in currency swap transactions. Forward outright FX transactions represent another 5% of this daily turnover. Options on inter-bank FX transactions making up another 8%.

Why Trade FX?

Liquidity

The Forex market is the most liquid market in the world. Most speculators focus on trading the highly liquid Majors where approximately 85% of trading volume occurs. Other currency pairs are less liquid and therefore increases liquidity risk.

Unlike the stock market, where slippage can be a real concern, high liquidity in Forex means that trades will generally be filled at the order price. There are always plenty of buyers and sellers which helps make sure spreads are narrow.


24-Hour Trading

Since the market is almost always open, traders can react to market, economic and political news as it happens, locking in profits, protecting profits and cutting losses. The main trading centres are Sydney, Tokyo, London, Frankfurt and New York. Trading takes place during five overlapping trading sessions starting at 9pm GMT Sunday evening and ending on 10pm GMT Friday Evening.


Leverage - Trading on Margin

Trading on margin means that a trader can utilize more capital than they have in their account. The volatility of currency pairs is usually less than other markets, such as futures and equities. Since there is less movement, traders leverage their capital to make money on smaller moves. The amount of margin available in Forex is as high as 1% (100:1 leverage), and generally up to 2% (50:1 leverage). With £2,000 of capital, you can trade up to £400,000 at 50:1 and £500,000 at 100:1. Your individual broker will set the level of margin required on your account.

If you were to trade £100,000 GBP/USD you would be required to have at least £1000 at 1% margin or £2000 at 2% margin in your account to open the trade. Trading on margin is a double edged sword. You can lose money equally as fast as you make it. It is therefore vital to have a full understanding of the FX market and not commit too much of your equity to each trade.


Lower Transaction Costs – Tighter Spreads - No Commissions

Most Forex brokers do not charge commissions, but instead make money on the dealing spread. The Dealing Spread is difference between the bid and ask quote. The Bid is the price buyers are willing to buy, and the Ask is the price that sellers are willing to sell at any given time. Under normal market conditions the dealing spread would be no more than 5 pips.


Trade in rising or falling markets

With FX Trading you can trade long or short which means you can take a view on any currency pair and place a relevant trade. If you feel that the UK economy is strong and the US Dollar will weaken against the Sterling you would execute a BUY GBP/USD order. By doing so you have bought British pounds in the expectation that they will appreciate versus the US dollar. If you feel the UK will continue to weaken and this will hurt the British Pound, you would execute a SELL GBP/USD order. By doing so you have sold British pounds in the expectation that they will depreciate versus the US dollar.