Archive for the ‘How To Trade Forex’ Category

If you have some spare cash on the side, you don’t want to just leave it sitting there. Obviously, you could put it into a bank, but let’s face it; the interest rates on most savings accounts are abysmal, at best.


Due to that it doesn’t take a rocket scientist to figure out that you’d probably want to invest your money somewhere. But the big question is: Where?

Do you put it into stocks? Or do you try your hand at the forex market? To know which one is going to be best suited for your aims, you first need to understand a little bit about both – enough to base a solid decision on anyway.

For starters, the stock market is based on buying shares in various companies. To profit, you can either hold your shares until their value increases, and then sell them, or hold them for even longer and enjoy the periodic dividends (shared profits) that some companies distribute.

Once upon a time, stocks were primarily ‘long-term’ trades, where stocks were bought and left to appreciate over time. Certain stocks that are particularly stable and known to gradually appreciate are known as ‘blue chip’ stocks. Nowadays that trend of ‘long term’ stock trading has been supplemented by a ‘short term’ system too, but this is relatively risky.

On the other hand, the forex market is definitely more short term than long term. When it comes to forex, it is immensely difficult to predict how currencies may fluctuate over a lengthy period of time, unless of course it is a particularly stable currency in the first place (such as the Swiss Franc!).

As such, most forex trades take place over the duration of a single market day.

Primarily, this is the difference between the stock and forex market. However, as an investor there is more to it than that. Truth be told, many find that the forex market is an easier place to make quick, and less risky, profits.

Partly this is down to the large number of options that are available, with an entire slew of currencies that you can migrate to, and from. Whereas with stocks your only option is to sell your current shares, with the forex you could use your current currency to buy an entirely different currency altogether.

Experienced investors also find that the forex market is a lot more predictable than the stock market. Unless you are privy to the inner workings of a company (which you shouldn’t be!), it is difficult to figure out how it will fluctuate.

End of the day, if what you’re interested in is turning a decent profit in a short amount of time, then the forex market certainly trumps the stock market. Of course, you could invest in both, but for now, concentrating on the forex will probably get you the results that you desire a lot faster.

Just as with pretty much everything profitable, Forex does come with its own fair share of risks attached to it. Knowing this is the first step to becoming a better investor, and if you ignore these risks then you could quite well find that they end up being the cause of some pretty hefty losses!

Of all the risks inherent to the Forex market, three types in particular stand out, and they are:

1. Self Risk

No, this doesn’t mean that you’re risking yourself, or your life, but rather that part and parcel of the riskiness of investing in forex stems from you, yourself. Foolhardiness, an unwillingness to quit when you really should, or a lack of confidence to make the calls that you feel are right can all contribute to the risks that you face.

And considering there are other risks out there, self risk is really something that you don’t need! With time and experience, you can overcome most of these risk factors though.

2. Broker Risk

Generally speaking, different brokers operate differently. Some charge a flat rate per transaction (though these aren’t often found anymore), while others take a commission based on your profits (also unpopular nowadays).

Most often, brokers tend to make money on large trades, and that means that they’re not so much interested in whether or not you actually profit, but are more interested in the fact that you start to develop a large spread.

Don’t be fooled into thinking that your broker is only concerned with your best interests!

3. Market Risk

Last, but certainly not least, there is the ever-present market risk. Going into ‘deals’ with people in forex can be risky in itself seeing as most of these people are more interested in their own profits than anything else.

Tips, advice, and so on can be helpful, but at the end of the day no one is going to give you the ‘secret’ to success for free. Be wary if you’re approached by someone who has a proposal that seems particularly risky. Chances are that they’re using you to leverage their own efforts.

While discussing these three big risks may put you off trading forex slightly, you shouldn’t let it get you too down. Yes, there are risks in the forex market, and yes, if you aren’t careful you could end up losing some money.

But at the same time, being aware of those risks is the first step towards facing them, and now that you know what you’re up against you’re certainly well equipped enough to start.

So long as you’re wary of the risks that you’re undertaking, and fairly vigilant when it comes to accepting deals and advice, you’ll find that the forex market has some incredible opportunities that are ripe for the picking.

Forex Is The Best Financial Market To Make Money
Out Of All The Finanicial Markets

Here is why….

There are many markets that you can invest your money int0 – equities, bonds, futures, commodities. There are many. While you can make money in any market, there is no better market to make money other that the Foreign Exchange Market, or Forex Market (FX).

Here are the top six reasons why the Forex Market is the best financial market to make money:

1. Forex is the best financial market to make money because of its sheer size, volume, and liquidity. It is huge. The daily volume averages almost 2 trillion. This is nearly triple of all the other markets put together, and two hundred times bigger than the NY Stock Market. Liquidity basically means that it is easy to sell your positions for cash. There is nothing more frustrating to an investors that to be stuck in a position with no buyers. Because of the sheer size of the Forex Market, you are able to trade quickly in and out of positions.

2. Forex is the best financial market to make money because it offers 24 hour trading, six days a week. This is very appealing to people who work from home, or choose to manage their investments during the evening. Because Forex offers around the clock trading (except Saturdays), you are able to execute your buying and selling positions in a manner that is more profitable for you.

3. Forex is the best financial market to make money because trading is done online and all you really need is a laptop and IP. This means that you can be on the beach, at a resort, or simply work a home and make money online. Personally, this is very appealing to many home based business entrepenuers.

4. Forex is the best financial market to make money because it offers huge margin accounts unlike other financial markets. In the equities market, it is not uncommon to have a 2:1 margin, or leveraged, account. That is, for every $1 of your own capital, you can borrow $2. While leverage investing magnifies the gains, it also magnifies the losses. In Forex Trading, you are able to leverage on a 100:1 and even a 200:1 ratio. Imagine having $200,000 worth of currency positions with only $1,000 of your own principal (a 200:1 ratio). This is a huge spread, and means if you play it right, you can easily turn $1,000 investment into a huge return.

5. Forex is the best financial market to make money because you only have to keep track of a few currency pairs. This is in stark contrast to having to keep your eye on hundred, if not thousands of mutual funds and equities, let alone futures, bonds, etc. This makes trading a lot simplier and manageable for many people. The major currency action is in these four Foreign Exchange pairs:

• US Dollar / Japanese Yen
• British Pound / US Dollar
• US Dollar / Swiss Franc
• Euro / US Dollar

6. Forex is the best financial market to make money because its volatility is controlled. The markets move up, and the markets move down. Some days are more volative than others, and of course you want to buy low and sell high, and buy again when it is low. That is easy to understand. What makes it different for every investor is predicting when these ups and downs have reached the top and reached the bottom, and knowing when to trade. Equity markets make this most difficult. With the Forex markets, the volatility is more controlled because it is not subject to CEO and corporate scandals like we have seen in the equity markets. Rather, what drives the Forex Market is normal fundamental and technical underpinnings.

How To Trade Forex – Six Steps

There are a number of important steps you have to take into consideration when you are learning how to trade forex. Each of these steps can be a course in itself, but for the sake of simplicity to my readers of this article, I will be very general. You can read other sections of this blog to study each area.

How To Trade Forex Step 1 – Learn Money Management

When you are first starting out, your money management skills will be tested. You will have some gains, you will have losses, and it is important that the management of your own money is solid and you are not in any dire financial situation. If you are totally in debt, and have no income, and looking to trade Forex with your last dollar in the hopes amassing a fortune, then Forex trading is not for you at this time. Have your own personal financed in order  before you launch into Forex currency trading.

How To Trade Forex Step 2 – Get A Course First And Learn World Currency Fluctuations

Foreign Currency Exchange is the largest in the financial market sector, larger that bond and equity trading. If you are going to learn how to trade forex, then you must be fluent in your understanding of world currency fluctuations, the basics of fundamental and technical analysis reseach, what moves the currency markets, and the patterns and signals of price fluctuations. Currencies are traded in pairs, and when you start out you want to start with a single pair and learn all you can about it price fluctuations from this single pair. For this reason, you will want to get your hands on a very good Forex Trading Course first before go live with your trading account.

How To Trade Forex Step 3 – Learn A Forex Trading System And Stick To It

There are many excellent Forex Trading Systems in the marketplace today. This website recommends only the best. The key is learn the system and stick to it. Do not jump around from one system to the other until you have mastered the one you work with. Many people have lost money from being forex trading system jumpers, while never being successful with any one system.

How To Trade Forex Step 4 – Start Off With A Forex Demo Account

Do not use real money when you are starting off, but use a Forex Demo Account. This will give you the advance to aquire the skillset first before you actually go live with your hard earned cash. I recommend in starting with either a mini account (10k lot size) or even a micro account (1k lot size). Either way, you will want to practice first, and a Forex Demo Account gives you the perfect opportunity to learn how to trade forex without losing money from inexperience.

How To Trade Forex Step 5 – Get A Forex Trading Chart

Forex Trading Charts are a absolute necessity. I recommend some excellent one’s on this site. You will want to see current pricing of currencies and be able to make technical analysis and fundamental evalulations quickly.

How To Trade Forex Step 6 -Have A Trusted Forex Broker/Advisor

Here is a Forex Tip – you want to have a Forex Broker that will give you a margin of 100:1  on your account. That is, for every $1 of capital you put into your margin account, you are able to trade 100 units of currency.

How To Trade Forex Step 6 – Understand Risk/Return

Like any of the financial markets, Forex is subject to great fluctuations, and the greater the risk, the greater the returns, both positive and negative returns. The goal in Forex trading is to minimize the risk and maximize the gains. I recommend only using your extra cash flow when it comes to investing in the Forex market. Do not invest all your financial portfolio in the foreign currency market. Learn how to trade forex wisely, with patience and persistence.

Forex Scam Alert status is set to sky high and I want to show you how to avoid this deadly financial Forex scam. Let’s get real for a minute with the facts. If you are a FX retail investors, there is a ninety five percent probability that you will lose capital and your hard earned money. I have been an Investment Advisor for over 10 years as a professional and have heard every financial sales pitch imaginable.

Let me get right to the point. Forex is a trillion dollar industry and it the largest of all the financial markets, even larger than the bond and equity markets. Hence, there are plenty of opportunists offering you the latest secret, the latest cheat sheet, and the coolest gadget, all as an attempt to simply sell you stuff.

Now, don’t get me wrong. If you want to be a main player in the foreign exchange market, you have to keep up with all the latest news and forex trading strategies. But, every forex strategy and secret has its limitations, and so don’t be scammed by believing someone when they say they have broken the “forex code” and they want to sell it to you.

Let me tell you why….

Forex Markets are fundamentally unknowable, and the sellers of products are telling you that they are.

Let me put it to you this way. If foreign exhange markets and/or investments lent themselves to rational analysis in any significantly predictive way, somebody would have perfected that analysis already and would have taken away all the chips of everybody else at the table a long time ago. Meaning, there would be no money left for anyone else. This clearly has not happened. And if it has not happened by now, even with all the charts, diagrams, computer geeks and nerds, it simply is not going to happen.

Here is a Forex trading strategy secret: there no secret.

There are new discoveries, but every predictable pattern will vanish sooner of later because Forex Markets are volatile based on human behaviors, not computer analysis.

As soon as you believe a supposedly Forex professional that they have discovered a secret Forex strategy to beat the foreign exhange currency markets at its own game, and they want to sell you this knowledge, you are setting yourself up for significant losses and subjecting yourself to the gambler’s ruin.

You see, when it comes to Forex currency financial markets, two and two make four just often enough to lull you into a false sense of security. Then, the very next day, they make five. And it won’t be long in your Forex Trading career that they make paper airplanes. You get the point.

It is impossible to beat the Forex exchange market 100% of the time. While signal patterns and currency market trends can establish themselves over time, even yet, they are not fully predictable and are also subject to much volatility.

The bottom line is: no matter how much Forex trading strategies and secrets you acquire or purchase, you still can’t prove what’s going to happen in the future, and especially in the financial markets.

So, what is my Forex Scam advice?

Yes, you want to buy products. Yes, you want to keep abreast on all the latest news and Forex trading strategies, but just don’t go out and leverage all your capital and put all your eggs in one basket. Otherwise, you will end up in the alley with nothing but the shirt on your back as capital.

You want to be balanced and test any tips, secrets, and newly acquired Forex knowledge with a reduced risked strategy. Go slow, go small, and test the evidence and results yourself, instead of relying on a so-called expert who has the biased perspective of simply wanting to sell you his/her possible Forex scam.