Introduction To Forex Trading

The 1971 abandonment of the Bretton Woods Accord and the subsequent unwinding of the regime of universal fixed exchange rates gave rise to the foreign exchange market as we know it today.

Forex refers to the foreign exchange market, where brokerage firms and banks are connected over an electronic network that allows them to convert the currencies of countries around the globe. The forex market is the largest and most liquid financial market in the world. The daily dollar volume of currencies traded in the currency market exceeds $1.4 trillion, many times larger than the combined volume of all U.S. equity markets.

While the foreign exchange market is often seen to be dominated by government central banks and commercial and investment banks, trading on the currency exchanges has become increasingly accessible to private investors through technological innovations such as the internet. The most commonly traded currencies are the US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. The FX market runs 24-hour hours a day, 5 days a week with continuous access to global dealers. Trading is not centralized on an exchange, as with the stock and futures markets. Transactions are conducted between two counterparts over the telephone or via an electronic network.

Fibonacci Trading

Leonardo Pisano, better known by his nickname, Fibonacci was an Italian mathematician born in Pisa, 12th century. It would have been observed in the Fibonacci numbers is said to be based on the findings of a great pyramid of Giza in Egypt. Fibonacci numbers is a sequence in which each successive number of the sum of the two previous numbers.

For example, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc.

The ratio of the Fibonacci series, which is important, not the actual number in the order. Ratio of adjacent terms of his incredible series of about 1.618, 0.618 or its inverse. This proportion is known by many names: the golden section, golden mean, PHI and the divine part. dimensional characteristics, which are consistent with rates of 1.618 occur repeatedly in the wild. Examples are as various forms of mollusc shells and gallaxies contains billions of stars.

Five Fibonacci Tricks

Fibonacci jumped into the technical current bull market. merchants are all self-pending real-time software is focused on the stock market. Its popularity has grown exponentially retail tried its arcane math and discovered its many virtues.

Fibonacci ratios describe the interaction between trends and market developments - 38%, 50% and 62%, so calculate the primary level is lowered. Apply these percentages after a trend in either direction to predict the extent of swing counter trend. Stretch the network the most obvious up or down wave, and how the percentages of Cross key price levels.

The convergence of fashion and retracement can be shown to the excellent trading opportunities.Remember that the folds of poor work in a vacuum. Always keep the high, low and moving average confirms the importance of a certain level.

Essential Elements of a Successful Trader

Courage Under Stressful Conditions When the Outcome is UncertainAll the foreign exchange trading knowledge in the world is not going to help, unless you have the nerve to buy and sell currencies and put your money at risk. As with the lottery “You gotta be in it to win it”. Trust me when I say that the simple task of hitting the buy or sell key is extremely difficult to do when your own real money is put at risk.You will feel anxiety, even fear. Here lies the moment of truth. Do you have the courage to be afraid and act anyway? When a fireman runs into a burning building I assume he is afraid but he does it anyway and achieves the desired result. Unless you can overcome or accept your fear and do it anyway, you will not be a successful trader.However, once you learn to control your fear, it gets easier and easier and in time there is no fear. The opposite reaction can become an issue – you’re overconfident and not focused enough on the risk you’re taking.Start by analyzing yourself. Are you the type of person that can control their emotions and flawlessly execute trades, oftentimes under extremely stressful conditions?

Learn Forex

How do I begin? Please give it to me SIMPLY.1. The best advice on how to learn to trade profitably is to learn from experts with proven track records. Many learning styles are available to beginners at all levels: books, CDs, online courses, group seminars, even one-on-one mentors who will come right your home for a few days. We outline our Forex-Trader picks in Learning Forex Trading. Learning to trade from experts is worth every penny and has saved us untold thousands in mistakes.We would not recommend starting forex trading without any training. It is not hard to learn, nor difficult to trade successfully, but you must first provide yourself with a basic functioning knowledge of ’the game you’re in’.2. While you are learning you will need charting software to practice reading the Market. Charting is an indispensable tool that shows you in real-time data what the market is doing moment by moment and also what the market has done in the past. As you learn to analyze these charts you can determine what trades to enter and exit, where to set your stop losses, limits etc.

Questions From Email Inbox

Thank you for inviting people to learn from your experience. I found that to be very generous. I was hoping you may be able to shed little light on just how to go about finding the right currency pairs to buy.This is where charting software will make it self-evident for you to know what pairs are ’trending’. Technical analysis using charting software: Elliott Wave, Retracements, Fibronacci patterns, short term trending, etc. Good charting software is invaluable! Look at it as one of your ’costs of doing business’.I have just begun learning how the FOREX works. There are so few opportunities for the lower economic class to achieve financial independence.It took us a full year to learn to trade forex to achieve consistent profits, but well worth the time and effort. Forex trading can be the great leveler of the self-investor playing field.

Differences between Spread Betting and Share Trading

Good Differences - Spread Betting Versus TradingNo taxesRight now, there are no taxes on spread betting profits. No stamp duty, and no capital gains tax if you are fortunate enough to have a gain. This situation could change. The authorities in a number of jurisdictions are studying spread betting with a view to bringing it under the auspices of the same agencies that regulate mainstream investments. When this happens it is reasonable to expect that there will be some political pressure to impose taxes as well.Going short is the same as going longShort selling is when a trader takes the view that the market, or a particular stock, is in a downward trend, or the price is about to collapse for some reason. There are a number of mechanisms to allow this belief to be exploited. The most common are short selling of the share, and the purchase of PUT options. Of course, if you already owned the share it is open to you to simply sell it, or if you wanted to retain the stock you could sell covered CALL options.Where short selling or the purchase of PUT options is contemplated, the trader will immediately come up against a number of obstacles. In order to sell short, the broker must be able to borrow the required number of shares to sell, until such time as the trader decides to close his or her short position and buy them back. This could prove to be difficult. In addition, certain shares will not be eligible for short selling at all. These will be securities that are already at a low price to begin with. In Europe, in particular, many brokers will not allow anyone to sell short.As far as options are concerned, things are not always equal with regard to PUTs and CALLs.

Day Trading Indicators and Indicator Trading

Did You Begin Day Trading As An Indicator Only Trader?Did you start day trading after buying a book on technical analysis, and getting a charting program - probably a free one that you found online - in order to save money? While reading your book you learned about trading indicators which could ’predict’ price movement, and what do you know, the ’best’ indicators were actually included in your free charting program - let the games begin.Now that you have all the day trading tools that are necessary, the book for education AND the free charting program with those ’best’ day trading indicators, you now need a day trading plan so you can decide which ones of those ’magic’ day trading indicators you are supposed to use. This really is a great book, besides telling you how to day trade using indicators to ’predict’ price - it also said that you need a trading plan to day trade.

What makes a good Trading Strategy?

Ask most NEW traders, and they will tell you about some moving average or combination of indicators or a chart pattern that they use. This is, as the more experienced trader knows, an entry point and not a strategy.Any trader who is more experienced will say a strategy should also include money management, risk control, perhaps stop losses and of course, an exit point. They might also say that you must let your profits run and cut your losses short. A well-read trader will also tell you that your strategy should fit with your trading personality.BUT there is one other vital ingredient that many traders forget - and that is to fully understand the "personality" of what you trade. Some traders specialise in say, gold or Brent crude or currencies or they might specialise in a particular index such as the FTSE 100 or the Dow but many traders choose to trade shares. Indeed some traders dabble in a bit of everything. I think this is the area that causes many traders to fail or at least not reach their full potential.In my view: You absolutely MUST specialise.I am sure that on the surface most people would say that sounds sensible but here is why it is a MUST!Superficially, many charts look the same. I bet if you had not seen the charts for some time and someone where to show you a chart of Brent Crude over 6 months and then a chart of Barclays PLC over the same 6 months you would be hard pushed to say which was which purely on the look of the chart.However, I bet that if you found a trader who trades ONLY Barclays day in and day out and also found someone who trades ONLY Brent Crude day in and day out, both of them would easily identify which was which. WHY?Because every share, index or commodity has it’s own "personality".Some will be volatile intra-day, some will follow their sector or the main index (market followers), some will do their own thing, some will spike up and down regularly, some will stop at key moving averages and some will just plough through. Some will move by 5% on average before they retrace and some by 2%. Some will gap up or down regularly, some will not. You get the idea!Therefore, no matter how good you are at analysing indicators, moving averages, trends and patterns, the same strategy WILL NOT work for everything. I would go so far as to say that a strategy that works well for Bovis Homes, for example, is likely NOT to work for BT Group - they have very different "personalities".So let’s return to our question: What makes a good trading strategy? Let me answer with a series of ten questions that you need to find answers to, in order to build a REALLY GOOD strategy.What do you want to trade (share, index, commodity, currency, etc)? If your answer is shares (plural) I would urge you to pick one typical share at this stage to really specialise. You can add more later.What "personality" does that share, index etc have?What entry system is the most reliable for that share?What stop loss system is the most effective for that share?What average risk will a typical trade carry?What exit system works well for that share?What is your trading personality (attitude to risk, losses, discipline, how much do you worry etc) and can you trade that strategy without overriding it?What timescale do you want to trade? (Using intra-day or end of day data)How much data do you keep on past trades to help identify strategy weaknesses?How does all this fit with your trading objectives?Once you have an answer to each question you need to do one final thing. Make sure all those things fit together and complement each other. For example, if the ideal stop loss position represents a big average risk and conflicts with your own attitude to risk, you need to start again. If you will override your exit point because greed makes you hang in for more, you need to think again. Perhaps you shouldn’t trade that stock in the first place - look for one with a different "personality" which will lead to a strategy you can trade comfortably.It is a long and sometimes painful iterative journey. You might need to go round and round in ever decreasing circles over a long time. Testing and refining, testing and refining before you can truly have a reliable and repeatable strategy that REALLY WORKS for you.THEN, you can look for other things to trade that have the same "personality" as your specialist stock, index, commodity or currency.But if it were easy, everyone would be doing it right?Good luck and enjoy your trading.

How to Make Consistent ProfitsTrading Futures Part II

Direct Access Electronic Trading The issue of direct access is an important one and it becomes more important the more short term your trading is. The market can change from a state of seeming paralysis to one of shocking volatility and activity in a flash. The length of time it takes between you deciding to enter an order and the order actually being in the market is obviously important. When I first started trading I used a phone broker and was dismayed that my fills would often be so far from the price the market was trading when I first entered the order. The first time I visited the trading floor, I discovered why. When I called in an order, first my discount(!) broker would check my account equity, then he would call a phone booth on the floor, the phone broker on the floor would then write the order down and pass it on (by phone) to a booth next to the appropriate pit, at that booth my order would be written down again and then signaled to a broker in the pit to be executed.

How to Make Consistent Profits Trading Futures Part I

One of the mistakes I consistently made in my early years as a trader was to try to make too much money in relation to my trading capital. To make £1000 a day while Futures Trading with £10,000 is absurdly ambitious; of course I have done it many times, as would anyone with this intention, but I have also gone bust on more than one occasion. To have the aspiration of taking £1000 out of the market each day, when trading with £10,000 or under is, I think, a quick route to the poor house. So what is a reasonable objective for a day / futures trader? A few weeks ago I visited an ex-floor trader who has set up a trading operation backing young aspiring traders. I was interested to find out from him how he trains his team. The essence of his approach is to give them a grounding in discipline and confidence. He believes that confidence is one of the primary keys to success in futures trading and that confidence is a by-product of taking money out of the market.

What is The Law of Charts?

The Law of Charts was discovered by Master Trader Joe Ross. As he likes to say, "It was there all along. It just happened to fall on my head much as the law of gravity was discovered when an apple fell on Isaac Newton’s head."The Law of Charts defines four basic formations known as 1-2-3 lows and highs, Ross hooks, trading ranges, and ledges. These occur in all time frames because the depict human action and reaction vis-à-vis price movement.What makes these formations unique is that they can be specifically defined. The ability to formulate a more precise definition sets these formations apart from such vague generalities as "head and shoulders," "coils," "flags," "pennants," "megaphones," and other such supposed price patterns that are frequently attached as labels to the action of prices.A 1-2-3 high or low comes at the end of a trend or swing.

Forex Fundamental Analysis

The two primary approaches of analyzing Forex markets are technical analysis and fundamental analysis. Fundamental analysis comprises the examination of economic indicators, asset markets and political considerations when evaluating a nation’s currency in terms of another. The focus of fundamental analysis lies on the economic, social and political forces that drive supply and demand. There is no single set of beliefs that guide forex fundamental analysis, yet most fundamental analysts look at various macroeconomic indicators such as economic growth rates, interest rates, inflation, and unemployment.Here we look at some of the major Forex fundamental factors that play a role in the movement of a currency:Economic IndicatorsEconomic indicators are reports released by the government or a private organization that detail a country’s economic performance. These economic indicators can be released on a weekly basis, but the more common report is monthly.

Forex Software - Choosing The Best

When it comes to forex trading the forex software you choose is essential. There are so many forex trading companies all competing for your business that choosing the right forex software can be quite a difficult task. Most of the forex software products available offers live online forex trading platforms but what other components are vital when it comes to your forex software.Key Elements For Your Forex SoftwareBefore purchasing any forex software there are a few essential items that should be included. The most important is security and your online forex trading software should include a 128 bit SSL encryption which will prevent hackers from accessing any of your personal details and information such as your account balance, transaction history, etc.Providing the best security for your forex trading will include a company that provides 24 hour technical server support for your forex software, 24 hour maintenance should anything go wrong, daily backups of all information, and a security system that has been designed to prevent any unauthorized access.

Forex Technical Analysis

The difference between forex technical and forex fundamental analysis is that forex technical analysis ignores fundamental factors and is applied only to the price action of the market. Forex technical analysis primarily consists of a variety of forex technical studies, each of which can be interpreted to predict market direction or to generate buy and sell signals. The technical analysis works by correlating the results and moves of current markets to create a short-term outlook for currencies. The rolling data that is produced throughout the trading day creates the interest in the markets and informs traders of the strong markets to back.The Trend is Your FriendForex technical analysis is largely based around forex market movement trends, thus creating the widely used phrase ’the trend is your friend’ amongst traders. Buying and selling at the right time is the key in maintaining good levels of profits, following a trend is also about knowing where to entry a trade and more importantly where to exit.

Forex Trading Systems

You should build your own trading systemA trading system on the Forex market is a type of strategy that allows traders to trade with a set of rules. There are many free trading systems and strategies printed in trading articles, journals, books and on trading-related websites. I would have to say that if you are not inclined to learn how to develop your own trading methodology, then perhaps you should consider giving your money for someone else to invest. Give it to someone who is trading a system that he developed and tested himself because he is more likely to have the confidence and courage to follow his own trading system.Why you need a forex trading system?It’s easy to trade with a system.A good system provides consistent result. What makes a good trading system?It’s simple. Forget complicated systems with lots of rules - it’s a proven fact that simple systems work better - and are less likely to fail, in the brutal world of trading.A trading system with profitable expectation.It provides good ratio of reward/risk.A system of comprehensive risk management including market exposure weightings, stop-loss provisions and capital commitment guidelines that preserve capital during trend-less or volatile periods.

How to choose a Forex Broker?

Forex brokers need to be associated with a large financial institution such as a bank in order to provide the funds necessary for margin trading. In the United States a broker should be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) as protection against fraud and abusive trade practices.Before trading Forex you need to set up an account with a Forex broker. You may feel overwhelmed by the number of forex brokers who offer their services online. Deciding on a broker requires lots of research on your part. There are several areas to examine before you sign on the dotted line with any broker. Here are some things that you need to look for in making your choice:Safety of FundsIs the broker regulated? Are client funds insured?Order executionHow fast is the broker’s order execution? Will they place you on manual execution?Do they offer automatic execution?How much can you trade before having to request a quote?

Day Trading Indicators and Indicator Trading

Trading Day and ours for guidance Trader? Did you start day trading after buying the book for technical analysis, and identify the program - will probably leave you found online - in order to save money? When reading a book you have learned about trading indicators which could 'predict price movement, and what you know, the "best" indicators have actually been involved in a program Free mapping - providing games begin.Now you daily trading tools that are needed, the book free education and to identify the "best" indicator program day trading, you should make theday trading plan so that you can decide which of these "magic" indicators day trading, you should use. It's a really good book also describes how the Trade Day by indicators to predict "the price - he also said that the day of your trading plan trade.So that this plan is it? The book tells you the trend after using an indicator called MACD, and he also told me how it was possible to select the top or bottom, using an indicator called stochastic, I suppose you have selected the stochastic indicator start your day trading - it is the "best of the best" because this indicator ensure that you enter the store with the "best" price. Amazing, simply amazing how easy this stuff is really day trading . In fact, why even bother in traffic whenever indicators give a signal - call your broker and tell him $ 100 on your account.My book technical analysis of futures market.

Markets, Strategies & Time Frames

The first step in the development of the trading strategy is to choose a marketing strategy andcorresponding you want to trade. As I discussed, select the type of STRATEGY is a very important part of marketing strategy and you should take the time to consider options. Many factors influence the decision, but my personality may direct you to the strategy that suits you best. When you make a choice, the important thing to remember is that you take alone. Read everything I have to tell you different strategies, but then decide for yourself. Only you really know what kind of person you are and therefore what kind of business is the best chapter you.This will help you understand some of the terms and conditions that may occur in the market and the key type of strategy that complements these conditions. When you're familiar with the types of basic strategy, you can choose a market is youwant use.

Perks Of Automated Forex Day Trading

Are you interested in automated forex trading day? There are many things you should know about automated forex trading, and is an ideal place to learn about it. The idea of automated forex trading update recently become increasingly popular. Futures Exchange was the first to adopt this system and later the foreign exchange market after work and automated forex day trading .- EfficiencyThis system is very efficient and effective because of its ability to take the deal or business - in real time. This means that it has not gone and fewer complications, and the results of more revenue. The achievement of this level of efficiency is very difficult to make a manual means, in particular, if the decision to trade or not trade can not take place in the time window for a few seconds. There are also cases where the opportunity is within a few milliseconds! There are cases where the trader is not his job and opportunity, all of a sudden, even though sometimes jumps merchant offers for some time, it had recently been losing business.

How Does Forex Trading Work?

Forex Trading is trading currencies from different countries against each other. Forex is acronym of Foreign Exchange.

For example, in Europe the currency in circulation is called the Euro (EUR) and in the United States the currency in circulation is called the US Dollar (USD). An example of a Forex trade is to buy the Euro while simultaneously selling US Dollar. This is called Going Long on the EUR/USD.

Forex trading is typically done through a broker or market maker. As a forex trader you can choose a Currency Pair that you expect to change in value and place a trade accordingly. For example, if you had purchased 1,000 Euros in January of 2005, it would have cost you around $1,200 USD. Throughout 2005 the Euro’s value vs. the U.S. Dollar’s value increased. At the end of the year 1,000 Euros was worth $1,300 U.S. Dollars. If you had chosen to end your trade at that point, you would have a $100 gain.

The Entrance To The Definition Of The Stock Exchange

The Stock Exchange is a market like any other market, as there is a market for cars and clothing market for example, the Stock Exchange is the place for buying and selling shares of the companies and bonds, which aligns the place where investors, whether junior or senior investors or companies, each of the various stock market has its own, such as stock gold and silver are especially speculation in the price of gold from the sale and purchase of private Petroleum Exchange, oil prices and international currency exchange also is the best ever FOREX is the currency of international trade (such as the currencies of countries with large economies such as the United States and Japan) -- Stock Dear visitor exist in all countries of the world, In every State of the Stock Exchange, which buys and sells shares of the companies existing within the State, such as the New York Stock Exchange in the United States of America, and the Egyptian Stock Exchange and the Dubai stock exchange, the Tokyo Stock Exchange in Japan and other countries. The stock exchange has no specific location, it is spreading throughout the world through networks and the Internet, but none controlled by or controlled by certain point, the stock is universal.

About OANDA

OANDA started in 1995 as the first online provider of comprehensive currency exchange information. Since then the "OANDA Rate"(R) has become the touchstone for corporations, tax authorities, auditing firms and even central banks. In 2001 OANDA launched FXTrade, the first fully automated online forex trading platform. FXTrade was the first platform to offer immediate execution, support trades and accounts of any size, enable true 24/7 trading, and eliminate the rollover swap by calculating interest by the second. OANDA's innovative technology has enabled it to sustain a large trading volume. Peak performance has been measured at 1.5 million trades a day, far exceeding the volume typically handled through any of the leading global banks or electronic communication networks (ECNs) that trade forex.