The most challenging part of getting started with Forex trading is to learn this innovative way of trading. Many potential investors that try to navigate the Forex system unaided end up being frustrated and financially intimidated. There are very simple strategies to becoming successful using the foreign exchange trading system but the first step is gathering all of the necessary information surrounding this type of trading specialty. Securing a reliable Forex trading broker is likely the first and most pivotal step after learning the initial principles.
Unlike many types of trading and futures, foreign exchange trading is not designed to make the client rich quickly. Many people are frightened off by the word that Forex trading is a get rich quick scheme that in large part, doesn't work. This is a financial myth despite all the hype surrounding the foreign exchange trading system. There are steps and gains to be taken in order to secure a future in successful trading. Expect to dedicate a large portion of time to researching and understanding the market in general before setting out with your pocket book ready to invest. Learn all you can about the Forex market in the beginning in order to make the Forex trading path a smooth and triumphant one.
There is no doubt that there are numerous types of orders that can be utilized in order to open and close trades and becoming familiar with them is a must. In the foreign exchange trading business there are charts, graphs and other visuals to help you effectively analyze trends in currency trading. These charts and graphs will assist in making well-informed decisions on what currency to sell. Timing is everything and it goes without saying that when experiencing with the Forex trading system, knowing when to trade can be the pivotal difference between success and failure. Understanding the analysis tools and how to use them efficiently will put any investor on the right track.
As well as proficient trading tools, it is an absolute necessity when using the foreign exchange trading system to understand how to use the software to perform actual trades. The only way to become comfortable with using Forex trading software is to use it and learn how to plot a course through the process. Selecting a good trader is the most imperative tip at this stage because an established trader can help you with the services required as well as giving you in depth tutorials using the foreign exchange trading system.
The most critical tool that will be utilized in the Forex trading system is patience and discipline. As mentioned earlier, foreign exchange trading is not a get rich quick proposal so learning patience and discipline can help you to become profitable in a timely fashion without losing money. Most brokers offer a demo account that can be used to practice and learn the foreign exchange trading system that mimics the real account with the exception of real money being traded. This gives a client insight into the market and its behaviors before actual money is invested. Learn how to make a profit using paper trading on a regular basis before risking your capital with Forex trading.
About the Author
Troy Degarnham is the author and webmaster of http://www.forex-trading-brokers.info an informative website about Forex Trading Brokers. Extensive help and tips on systems, software, signals, forex trading, forex brokers, courses, and other secrets to help you gain financial freedom.
To your trading success
Abraham Ekedum
Saturday, September 20, 2008
Saturday, September 13, 2008
The Skinny on Forex
What is FOREX?
The Foreign Exchange market, also referred to as the "FOREX" or "Forex" or "Retail forex" or "FX" or "Spot FX" or just "Spot" is the largest financial market in the world, with a volume of over $4 trillion a day. If you compare that to the $25 billion a day volume that the New York Stock Exchange trades, you can easily see how enormous the Foreign Exchange really is. It actually equates to more than three times the total amount of the stocks and futures markets combined! Forex rocks!
What is traded on the Foreign Exchange?
The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, and are traded in pairs; for example the Euro dollar and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY).
Because you're not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy.
In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country's economy, compared to the other countries' economies.
Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.
Until the late 1990's, only the "big guys" could play this game. The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with! Forex was originally intended to be used by bankers and large institutions - and not by us "little guys". However, because of the rise of the Internet, online Forex trading firms are now able to offer trading accounts to 'retail' traders like us.
All you need to get started is a computer, a high-speed Internet connection, and the information contained within this site.
BabyPips.com was created to introduce novice or beginner traders to all the essential aspects of foreign exchange, in a fun and easy-to-understand manner.
What is a Spot Market?
A spot market is any market that deals in the current price of a financial instrument.
Which Currencies Are Traded?
The most popular currencies along with their symbols are shown below:
Symbol Country Currency Nickname
USD United States Dollar Buck
EUR Euro members Euro Fiber
JPY Japan Yen Yen
GBP Great Britain Pound Cable
CHF Switzerland Franc Swissy
CAD Canada Dollar Loonie
AUD Australia Dollar Aussie
NZD New Zealand Dollar Kiwi
Forex currency symbols are always three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country’s currency.
When Can Currencies Be Traded?
The spot FX market is unique within the world markets. It’s like a Super Wal-Mart where the market is open 24-hours a day. At any time, somewhere around the world a financial center is open for business, and banks and other institutions exchange currencies every hour of the day and night with generally only minor gaps on the weekend.
The foreign exchange markets follow the sun around the world, so you can trade late at night (if you’re a vampire) or in the morning (if you’re an early bird). Keep in mind though, the early bird doesn’t necessarily get the worm in this market - you might get the worm but a bigger, nastier bird of prey can sneak up and eat you too…
Time Zone New York GMT
Tokyo Open 7:00 pm 0:00
Tokyo Close 4:00 am 9:00
London Open 3:00 am 8:00
London Close 12:00 pm 17:00
New York Open 8:00 am 13:00
New York Close 5:00 pm 22:00
The Forex market (OTC)
The Forex OTC market is by far the biggest and most popular financial market in the world, traded globally by a large number of individuals and organizations. In the OTC market, participants determine who they want to trade with depending on trading conditions, attractiveness of prices and reputation of the trading counterpart.
The chart below shows global foreign exchange activity. The dollar is the most traded currency, being on one side of 89% of all transactions. The Euro’s share is second at 37%, while that of the yen is at 20%.
Why Trade Foreign Currencies?
There are many benefits and advantages to trading Forex. Here are just a few reasons why so many people are choosing this market:
No commissions.
No clearing fees, no exchange fees, no government fees, no brokerage fees. Brokers are compensated for their services through something called the bid-ask spread.
No middlemen. Spot currency trading eliminates the middlemen, and allows you to trade directly with the market responsible for the pricing on a particular currency pair.
No fixed lot size.
In the futures markets, lot or contract sizes are determined by the exchanges. A standard-size contract for silver futures is 5000 ounces. In spot Forex, you determine your own lot size. This allows traders to participate with accounts as small as $250 (although we explain later why a $250 account is a bad idea).
Low transaction costs.
The retail transaction cost (the bid/ask spread) is typically less than 0.1 percent under normal market conditions. At larger dealers, the spread could be as low as .07 percent. Of course this depends on your leverage and all will be explained later.
A 24-hour market.
There is no waiting for the opening bell - from Sunday evening to Friday afternoon EST, the Forex market never sleeps. This is awesome for those who want to trade on a part-time basis, because you can choose when you want to trade--morning, noon or night.
No one can corner the market.
The foreign exchange market is so huge and has so many participants that no single entity (not even a central bank) can control the market price for an extended period of time.
Leverage.
In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make nice profits, and at the same time keep risk capital to a minimum. For example, Forex brokers offer 200 to 1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies. Similarly, with $500 dollars, one could trade with $100,000 dollars and so on. But leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains.
High Liquidity.
Because the Forex Market is so enormous, it is also extremely liquid. This means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell at will. You are never "stuck" in a trade. You can even set your online trading platform to automatically close your position at your desired profit level (a limit order), and/or close a trade if a trade is going against you (a stop loss order).
Free “Demo” Accounts, News, Charts, and Analysis. Most online Forex brokers offer 'demo' accounts to practice trading, along with breaking Forex news and charting services. All free! These are very valuable resources for “poor” and SMART traders who would like to hone their trading skills with 'play' money before opening a live trading account and risking real money.
“Mini” and “Micro” Trading:
You would think that getting started as a currency trader would cost a ton of money. The fact is, compared to trading stocks, options or futures, it doesn't. Online Forex brokers offer "mini" and “micro” trading accounts, some with a minimum account deposit of $300 or less. Now we're not saying you should open an account with the bare minimum but it does makes Forex much more accessible to the average (poorer) individual who doesn't have a lot of start-up trading capital.
What Tools Do I Need to Start Trading Forex?
A computer with a high-speed Internet connection and all the information on this site is all that is needed to begin trading currencies.
What Does It Cost to Trade Forex?
An online currency trading (a “micro account”) may be opened with a couple hundred bucks. Do not laugh – micro accounts and its bigger cousin, the mini account, are both good ways to get your feet wet without drowning. For a micro account, we'd recommend at least $1,000 to start. For a mini account, we’d recommend at least $10,000 to start.
To your trading success
Abraham Ekedum
The Foreign Exchange market, also referred to as the "FOREX" or "Forex" or "Retail forex" or "FX" or "Spot FX" or just "Spot" is the largest financial market in the world, with a volume of over $4 trillion a day. If you compare that to the $25 billion a day volume that the New York Stock Exchange trades, you can easily see how enormous the Foreign Exchange really is. It actually equates to more than three times the total amount of the stocks and futures markets combined! Forex rocks!
What is traded on the Foreign Exchange?
The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, and are traded in pairs; for example the Euro dollar and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY).
Because you're not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy.
In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country's economy, compared to the other countries' economies.
Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.
Until the late 1990's, only the "big guys" could play this game. The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with! Forex was originally intended to be used by bankers and large institutions - and not by us "little guys". However, because of the rise of the Internet, online Forex trading firms are now able to offer trading accounts to 'retail' traders like us.
All you need to get started is a computer, a high-speed Internet connection, and the information contained within this site.
BabyPips.com was created to introduce novice or beginner traders to all the essential aspects of foreign exchange, in a fun and easy-to-understand manner.
What is a Spot Market?
A spot market is any market that deals in the current price of a financial instrument.
Which Currencies Are Traded?
The most popular currencies along with their symbols are shown below:
Symbol Country Currency Nickname
USD United States Dollar Buck
EUR Euro members Euro Fiber
JPY Japan Yen Yen
GBP Great Britain Pound Cable
CHF Switzerland Franc Swissy
CAD Canada Dollar Loonie
AUD Australia Dollar Aussie
NZD New Zealand Dollar Kiwi
Forex currency symbols are always three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country’s currency.
When Can Currencies Be Traded?
The spot FX market is unique within the world markets. It’s like a Super Wal-Mart where the market is open 24-hours a day. At any time, somewhere around the world a financial center is open for business, and banks and other institutions exchange currencies every hour of the day and night with generally only minor gaps on the weekend.
The foreign exchange markets follow the sun around the world, so you can trade late at night (if you’re a vampire) or in the morning (if you’re an early bird). Keep in mind though, the early bird doesn’t necessarily get the worm in this market - you might get the worm but a bigger, nastier bird of prey can sneak up and eat you too…
Time Zone New York GMT
Tokyo Open 7:00 pm 0:00
Tokyo Close 4:00 am 9:00
London Open 3:00 am 8:00
London Close 12:00 pm 17:00
New York Open 8:00 am 13:00
New York Close 5:00 pm 22:00
The Forex market (OTC)
The Forex OTC market is by far the biggest and most popular financial market in the world, traded globally by a large number of individuals and organizations. In the OTC market, participants determine who they want to trade with depending on trading conditions, attractiveness of prices and reputation of the trading counterpart.
The chart below shows global foreign exchange activity. The dollar is the most traded currency, being on one side of 89% of all transactions. The Euro’s share is second at 37%, while that of the yen is at 20%.
Why Trade Foreign Currencies?
There are many benefits and advantages to trading Forex. Here are just a few reasons why so many people are choosing this market:
No commissions.
No clearing fees, no exchange fees, no government fees, no brokerage fees. Brokers are compensated for their services through something called the bid-ask spread.
No middlemen. Spot currency trading eliminates the middlemen, and allows you to trade directly with the market responsible for the pricing on a particular currency pair.
No fixed lot size.
In the futures markets, lot or contract sizes are determined by the exchanges. A standard-size contract for silver futures is 5000 ounces. In spot Forex, you determine your own lot size. This allows traders to participate with accounts as small as $250 (although we explain later why a $250 account is a bad idea).
Low transaction costs.
The retail transaction cost (the bid/ask spread) is typically less than 0.1 percent under normal market conditions. At larger dealers, the spread could be as low as .07 percent. Of course this depends on your leverage and all will be explained later.
A 24-hour market.
There is no waiting for the opening bell - from Sunday evening to Friday afternoon EST, the Forex market never sleeps. This is awesome for those who want to trade on a part-time basis, because you can choose when you want to trade--morning, noon or night.
No one can corner the market.
The foreign exchange market is so huge and has so many participants that no single entity (not even a central bank) can control the market price for an extended period of time.
Leverage.
In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make nice profits, and at the same time keep risk capital to a minimum. For example, Forex brokers offer 200 to 1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies. Similarly, with $500 dollars, one could trade with $100,000 dollars and so on. But leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains.
High Liquidity.
Because the Forex Market is so enormous, it is also extremely liquid. This means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell at will. You are never "stuck" in a trade. You can even set your online trading platform to automatically close your position at your desired profit level (a limit order), and/or close a trade if a trade is going against you (a stop loss order).
Free “Demo” Accounts, News, Charts, and Analysis. Most online Forex brokers offer 'demo' accounts to practice trading, along with breaking Forex news and charting services. All free! These are very valuable resources for “poor” and SMART traders who would like to hone their trading skills with 'play' money before opening a live trading account and risking real money.
“Mini” and “Micro” Trading:
You would think that getting started as a currency trader would cost a ton of money. The fact is, compared to trading stocks, options or futures, it doesn't. Online Forex brokers offer "mini" and “micro” trading accounts, some with a minimum account deposit of $300 or less. Now we're not saying you should open an account with the bare minimum but it does makes Forex much more accessible to the average (poorer) individual who doesn't have a lot of start-up trading capital.
What Tools Do I Need to Start Trading Forex?
A computer with a high-speed Internet connection and all the information on this site is all that is needed to begin trading currencies.
What Does It Cost to Trade Forex?
An online currency trading (a “micro account”) may be opened with a couple hundred bucks. Do not laugh – micro accounts and its bigger cousin, the mini account, are both good ways to get your feet wet without drowning. For a micro account, we'd recommend at least $1,000 to start. For a mini account, we’d recommend at least $10,000 to start.
To your trading success
Abraham Ekedum
Thursday, September 4, 2008
If you want to become a forex trader from home and earn a lucrative income you can. Here we will outline how to do this in simple steps you can follow and enjoy currency trading success.
Let's start with a sobering fact - 95% of traders lose.
They don't lose because they can't learn currency trading anyone can, it's a learned skill.
They lose because they either get the wrong forex education, or have the wrong mindset and forex is a unique combination of method and mindset.
Let's stress another obvious fact which most traders fail to register and lose.
You cannot get rich by following someone else!
Don't believe all the gurus, mentors and vendors trying to sell you systems which will make you rich, like the ridiculous forex robots you see all claiming profits and all they have is a back tested track record in hindsight.
If forex trading was as easy as the above, everyone would be making money and that's clearly not the case.
There are only around 5% of traders who make big money and there not in most instances, the cleverest or the hardest working - but they know what it takes to succeed and you must too.
So what does it take to succeed?
In the first instance you need a robust, simple, forex trading strategy and the simpler the better.
Don't be fooled by thinking complicated methods are best - there not.
Make a system to complicated and it will have too many elements to break.
You should base your system on forex charts and simply follow high odds patterns - this is easy to learn and you can do it in a few weeks.
Next you must make sure that you understand and have confidence in your forex trading system (this is why you cant follow other peoples) because, if you don't, you will never have the discipline to follow your method.
If you can't follow your system with discipline, you don't actually have a method!
One of the biggest myths about currency trading is you can trade for regular income or trade with no drawdown. This is mostly promoted by vendors telling you it's easy to trade so you buy their products but has no basis in reality.
Any forex trading system (even the best ones) will spend week or months when they lose and you have to have the discipline to stay on course until you hit a home run. This is not easy - but in forex trading you have to lose to win.
Discipline is a major problem for most traders and if you can achieve it, you are on the road to currency trading success.
Here is a simple equation you should keep in mind:
Simple Logical Robust Trading System = Confidence = Discipline to apply = Forex Profits
While the above equation is simple, most traders don't understand it, if you do and base your forex trading strategy on it, you can achieve forex trading success.
Keep in mind, forex trading is not just about having a good system, its about having confidence in it and the discipline to apply it for success which will see you make long term gains and achieve the income you desire.
NEW! 2 X FREE ESSENTIAL TRADER PDFS ESSENTIAL FOREX TRADING COURSE
For free 2 x trading Pdf's, with 50 of pages of Critical info and the best Forex Education visit our website at: http://www.learncurrencytradingonline.com
Article Source: http://www.ArticleBiz.com
To your success,
Abraham Ekedum
Let's start with a sobering fact - 95% of traders lose.
They don't lose because they can't learn currency trading anyone can, it's a learned skill.
They lose because they either get the wrong forex education, or have the wrong mindset and forex is a unique combination of method and mindset.
Let's stress another obvious fact which most traders fail to register and lose.
You cannot get rich by following someone else!
Don't believe all the gurus, mentors and vendors trying to sell you systems which will make you rich, like the ridiculous forex robots you see all claiming profits and all they have is a back tested track record in hindsight.
If forex trading was as easy as the above, everyone would be making money and that's clearly not the case.
There are only around 5% of traders who make big money and there not in most instances, the cleverest or the hardest working - but they know what it takes to succeed and you must too.
So what does it take to succeed?
In the first instance you need a robust, simple, forex trading strategy and the simpler the better.
Don't be fooled by thinking complicated methods are best - there not.
Make a system to complicated and it will have too many elements to break.
You should base your system on forex charts and simply follow high odds patterns - this is easy to learn and you can do it in a few weeks.
Next you must make sure that you understand and have confidence in your forex trading system (this is why you cant follow other peoples) because, if you don't, you will never have the discipline to follow your method.
If you can't follow your system with discipline, you don't actually have a method!
One of the biggest myths about currency trading is you can trade for regular income or trade with no drawdown. This is mostly promoted by vendors telling you it's easy to trade so you buy their products but has no basis in reality.
Any forex trading system (even the best ones) will spend week or months when they lose and you have to have the discipline to stay on course until you hit a home run. This is not easy - but in forex trading you have to lose to win.
Discipline is a major problem for most traders and if you can achieve it, you are on the road to currency trading success.
Here is a simple equation you should keep in mind:
Simple Logical Robust Trading System = Confidence = Discipline to apply = Forex Profits
While the above equation is simple, most traders don't understand it, if you do and base your forex trading strategy on it, you can achieve forex trading success.
Keep in mind, forex trading is not just about having a good system, its about having confidence in it and the discipline to apply it for success which will see you make long term gains and achieve the income you desire.
NEW! 2 X FREE ESSENTIAL TRADER PDFS ESSENTIAL FOREX TRADING COURSE
For free 2 x trading Pdf's, with 50 of pages of Critical info and the best Forex Education visit our website at: http://www.learncurrencytradingonline.com
Article Source: http://www.ArticleBiz.com
To your success,
Abraham Ekedum
Become a Forex Trader From Home - in Simple Steps and Make Huge Consistent Profits
If you want to become a forex trader from home and earn a lucrative income you can. Here we will outline how to do this in simple steps you can follow and enjoy currency trading success.
Let's start with a sobering fact - 95% of traders lose.
They don't lose because they can't learn currency trading anyone can, it's a learned skill.
They lose because they either get the wrong forex education, or have the wrong mindset and forex is a unique combination of method and mindset.
Let's stress another obvious fact which most traders fail to register and lose.
You cannot get rich by following someone else!
Don't believe all the gurus, mentors and vendors trying to sell you systems which will make you rich, like the ridiculous forex robots you see all claiming profits and all they have is a back tested track record in hindsight.
If forex trading was as easy as the above, everyone would be making money and that's clearly not the case.
There are only around 5% of traders who make big money and there not in most instances, the cleverest or the hardest working - but they know what it takes to succeed and you must too.
So what does it take to succeed?
In the first instance you need a robust, simple, forex trading strategy and the simpler the better.
Don't be fooled by thinking complicated methods are best - there not.
Make a system to complicated and it will have too many elements to break.
You should base your system on forex charts and simply follow high odds patterns - this is easy to learn and you can do it in a few weeks.
Next you must make sure that you understand and have confidence in your forex trading system (this is why you cant follow other peoples) because, if you don't, you will never have the discipline to follow your method.
If you can't follow your system with discipline, you don't actually have a method!
One of the biggest myths about currency trading is you can trade for regular income or trade with no drawdown. This is mostly promoted by vendors telling you it's easy to trade so you buy their products but has no basis in reality.
Any forex trading system (even the best ones) will spend week or months when they lose and you have to have the discipline to stay on course until you hit a home run. This is not easy - but in forex trading you have to lose to win.
Discipline is a major problem for most traders and if you can achieve it, you are on the road to currency trading success.
Here is a simple equation you should keep in mind:
Simple Logical Robust Trading System = Confidence = Discipline to apply = Forex Profits
While the above equation is simple, most traders don't understand it, if you do and base your forex trading strategy on it, you can achieve forex trading success.
Keep in mind, forex trading is not just about having a good system, its about having confidence in it and the discipline to apply it for success which will see you make long term gains and achieve the income you desire.
NEW! 2 X FREE ESSENTIAL TRADER PDFS ESSENTIAL FOREX TRADING COURSE
For free 2 x trading Pdf's, with 50 of pages of Critical info and the best Forex Education visit our website at: http://www.learncurrencytradingonline.com
Article Source: http://www.ArticleBiz.com
"Keep trading"
Abraham Ekedum
Let's start with a sobering fact - 95% of traders lose.
They don't lose because they can't learn currency trading anyone can, it's a learned skill.
They lose because they either get the wrong forex education, or have the wrong mindset and forex is a unique combination of method and mindset.
Let's stress another obvious fact which most traders fail to register and lose.
You cannot get rich by following someone else!
Don't believe all the gurus, mentors and vendors trying to sell you systems which will make you rich, like the ridiculous forex robots you see all claiming profits and all they have is a back tested track record in hindsight.
If forex trading was as easy as the above, everyone would be making money and that's clearly not the case.
There are only around 5% of traders who make big money and there not in most instances, the cleverest or the hardest working - but they know what it takes to succeed and you must too.
So what does it take to succeed?
In the first instance you need a robust, simple, forex trading strategy and the simpler the better.
Don't be fooled by thinking complicated methods are best - there not.
Make a system to complicated and it will have too many elements to break.
You should base your system on forex charts and simply follow high odds patterns - this is easy to learn and you can do it in a few weeks.
Next you must make sure that you understand and have confidence in your forex trading system (this is why you cant follow other peoples) because, if you don't, you will never have the discipline to follow your method.
If you can't follow your system with discipline, you don't actually have a method!
One of the biggest myths about currency trading is you can trade for regular income or trade with no drawdown. This is mostly promoted by vendors telling you it's easy to trade so you buy their products but has no basis in reality.
Any forex trading system (even the best ones) will spend week or months when they lose and you have to have the discipline to stay on course until you hit a home run. This is not easy - but in forex trading you have to lose to win.
Discipline is a major problem for most traders and if you can achieve it, you are on the road to currency trading success.
Here is a simple equation you should keep in mind:
Simple Logical Robust Trading System = Confidence = Discipline to apply = Forex Profits
While the above equation is simple, most traders don't understand it, if you do and base your forex trading strategy on it, you can achieve forex trading success.
Keep in mind, forex trading is not just about having a good system, its about having confidence in it and the discipline to apply it for success which will see you make long term gains and achieve the income you desire.
NEW! 2 X FREE ESSENTIAL TRADER PDFS ESSENTIAL FOREX TRADING COURSE
For free 2 x trading Pdf's, with 50 of pages of Critical info and the best Forex Education visit our website at: http://www.learncurrencytradingonline.com
Article Source: http://www.ArticleBiz.com
"Keep trading"
Abraham Ekedum
Tuesday, September 2, 2008
8 top reasons why people want to trade in the forex market
By now you should have probably heard of the foreign exchange (forex) market, perhaps as part of a sales seminar in your local airport Hilton. You have seen the slide shows, heard the claims and shook your head in wonder when you pondered the vastness of this enormous market. Then you returned home to trade in markets you know and love. But some part of you still questions if you should look into forex, and if so where should you start?Let’s take a moment to review the reasons you might want to trade in this wild and crazy market.Diversification: You’ve heard the old adage about putting your eggs in one basket, right? The long and the short of it is that you should not. Like many other Americans, I have a 401(k), a bit of real estate, little bit in a managed fund, a checking account or two and a money market fund. The bulk of my assets tend to be based on the U.S. dollar and economy. That is not necessarily a good thing.Let’s consider a worst-case scenario. If Utah, where I currently reside, had a catastrophic event, then my property values would probably tank. I have insurance, but I get the feeling that one doesn’t really know the extent of one’s coverage until one actually needs to use it. So I may or may not get the insurance money to cover what I feel my property is worth. Let’s go one step further and add insult to injury and suppose that the U.S. stock market hits a reversal. As a result, my other assets start to slide. This would be a potentially rough way to find out that my portfolio isn’t as diversified as I had thought. So, for me investing in the forex market is an attractive way to diversify my meager portfolio.One of the benefits of trading currency is that I could easily invest in another country’s currency without driving 12 hours north to Canada to open a bank account for storing my “loonies.” With the click of one or two buttons, I can place my confidence in the euro, yen or a number of other currencies from around the world. Now, if the worst case scenario hits and the stock market takes a little dive, there is a possibility that I can make a gain on other currencies.24-Hour Trading: It is hard to day trade stocks without giving up your day job, and that certainly wasn’t an option for me. Like many others, I usually scramble home from a long day at work, fix and eat dinner, hang out with my child and peer at my charts a little before shuffling off to bed. Trading in a market with fixed hours seemed impossible for me. If there did happen to be a good trade on the horizon, I would have had to squeeze placing orders into the morning rush of snoozing the alarm, getting ready and gulping down that first cup of joe. It was enough to make me throw up my hands and reach for the nearest money manager.As a contrast, the forex market is open 24 hours a day, five and half days a week. This means my two hours of chart watching in the evenings can be accompanied by actual trading. In fact, I have heard from numerous traders that the best time to trade is the middle of the night. I am not sure how this works since I have heard it from people in Australia, England and in all U.S. time zones. I have found that no matter what the time zone, there always are trading opportunities, making the forex market particularly convenient for people like me who are living life as well as trading.Volatility: One of the other things that interested me about the forex market is the volatility. No other market exhibits the schizophrenic behavior of the currency market. This means that the hour or two I spend trading every evening can bring about some lucrative results. Remember, though, that loss is equally possible, and as I like to tell my husband, margin calls are not a valid stop loss strategy.Liquidity: The likelihood of being able to get into and out of trades at any given time during the day or night is very high in the forex market. Literally, hundreds of thousands of people are online every second during the market hours buying and selling currencies. The market itself trades approximately $1.9 trillion every day.Low Fees: The forex traders cost of doing business is called the spread. The spread is essentially the difference between the price you can buy the currency and the price you can sell the currency (the “bid” and the “ask”). For example, if you have a bid price on the EUR/USD of 1.2733 and an ask price of 1.2735, you are “paying” a two-pip spread. You do not have to pay other commissions or hidden fees. If you do, conduct a search for forex brokers, because you may have the wrong one.It works a little like this: If I placed a buy on the EUR/USD at 1.2733, I won’t see a breakeven point on the trade until the price moves to 1.2735. So, if I were trading a mini account, I would see a -$2 on that particular trade (my account is held in USD, if I had an account in some other currency that value might be a little different). Once the price moves to 1.2735 my profit comes out of the red and heads for the green.Ease: Let’s face it, getting started in forex trading is easy, sometimes too easy, but I will get back to that. The barriers to entry are low and in most instances, you can open an account online in a matter of a day or two. Then you pop a check in the mail and are ready to hit the big time. Most forex brokers will let you open a mini account for as little as $250, and because of the leverage inherent in this industry, you can be off and trading large amounts of money in no time.Increased Leverage: Leverage is sort of like a promissory note from your broker. In its basic form, it enables a trader with 200-to-1 leverage to have $50 in margin controlling a $10,000 position in the market, or 0.5 percent of the position value. The substantial leverage that is available to online forex traders can be a powerful money-making tool. The need for so much leverage is due to the price stability and liquidity associated with the market. These factors result in an average daily percentage movement of about 1 percent on major currencies, compared to the volatility of the equities markets that can easily have movements of 10 percent a day.No One Person or Economy Controls the Market: The forex market has no physical, central exchange. In fact, it is so vast and has so many participants that no single entity, not even a central bank, can control the market price for an extended period. Even interventions by mighty central banks are becoming increasingly ineffectual and short lived.On Your Marks, Get Set…So you have made the decision to take the plunge and trade in the most volatile and exciting market out there. Now what? To say there are a lot of forex brokers out there is a bit of an understatement. I heard an estimate last year that the foreign exchange industry is growing at 20 percent to 25 percent a year. As the market grows, so do the number of less-than-reputable firms. Just a few months ago, a probe into the biggest foreign exchange scam in U.S. history concluded with a $33 million fine.Most criminal schemes have some tell-tale signs and can be identified by experienced traders; however, newer speculators may have problems spotting the difference between legitimate and fraudulent enterprises. I strongly recommend thoroughly researching any potential companies with which you are considering investing before sending in your hard-earned cash.I am constantly surprised by how people will send off checks to companies that promise the moon without doing even the smallest bit of due diligence. These are rational people who research their purchases thoroughly, read consumer reports and weigh their options carefully about things such as schools, homes, even banks and, yet, somehow are blinded by the promise of easy riches. Finally, find out if the company you are considering is under investigation for fraud or has been convicted of fraud
To your success,
Abraham Ekedum
To your success,
Abraham Ekedum
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