on line forex trading

FOREX Investing Compared to Other Investment Opportunities

2006-04-30T04:12:00.000-07:00

With over $1.5 trillion changing hands daily, it might be advantageous for you to investigate the extremely lucrative business opportunity involving currency trading.

Once the domain of major banks and corporations, this field is now an open playground for the ordinary individual.

The following information gives you a comparison of different investment opportunities in comparison to Forex trading Forex could be the perfect opportunity for you if you are willing to have an open mind and investigate.

Equities are dependant on variable factors regarding when to buy and when to sell. With Forex, the opportunity to buy or sell is always present.

Futures require a person to pay exchange fees as well as commission charges. Forex requires no commission charges or fees. Futures also is limited to specific trading hours, whereas Forex is not limited and is available 24/7. Also, with Futures, once a person buys they are basically locked in for a specific amount of time. Forex offers flexibility to change position within seconds at the onset of any variable which could effect the particular economic security. When a late breaking news or factor is announced, bam--a trade is made within seconds.

Real Estate can be devastating to the novice and often requires larger amounts of investments. It is also volatile with the factors which can affect the buying and selling. Ask any real estate investor; they all can tell you the horror stories. The emotional strain of a lingering negative tenant is enough to make any investor throw up their hands and run for the hills. An investor may often have money tied up in an investment for several years depending on the situation involved. Although real estate has been up in value for the past few years, many now believe the market has bottomed out and value is growing at a snail’s pace. Many investors often have to wait on approval from banks in regards to financing or releasing money for financing; therefore, an investor may have his money wrapped up long-term. Forex is extremely flexible.

CD’s and Savings Accounts offer security but with little return on the investment dollar. With Forex, a sharp trader can often multiply his investment many times over.

Annuities are mostly safe for the long-term, but if an investor needs to pull his money out for the short term, he may have to pay surrender charges which can range as high as 6-8% if withdrawn within the first 6 to 8 years. In his article entitled, “Are Annuities a Worthwhile Investment, Don Taylor, Ph.D., CFA (bankrate.com) states that “most investors would be better off considering annuities as a last resort rather than a first choice when it comes to creating an investment portfolio.

There is a learning curve with Forex; however, the investment in time may pay multiple benefits in terms of investment. There are many avenues to achieve wealth, but few as flexible and lucrative as Forex. With a 24/7 timetable, a person can be in business starting with just a few hundred dollars, the right training and a computer. This flexibility allows a person to work from the comfort of their own home and be in control.

Online Forex Trading Strategies

2006-04-22T12:13:00.000-07:00

Forex trading strategies are the key to successful forex trading or online currency trading. A knowledge of these forex trading strategies can mean the difference between a profit and a loss and it is therefore imperative that you fully understand the strategies used in forex trading.

Forex trading is very different from trading in stocks and using forex trading strategies will give you more advantages and help you realize even greater profits in the short term. There are a wide range of forex trading strategies available to investors and one of the most useful of these forex trading strategies is a strategy known as leverage.

This forex trading strategy is designed to allow online currency traders to avail of more funds than are deposited and by using this forex trading strategy you can maximize the forex trading benefits. Using this strategy you can actually utilize as much as 100 times the amount in your deposit account against any forex trade which will make backing higher yielding transactions even easier and therefore allowing better results in your forex trading

The leverage forex trading strategy is used on a regular basis and allows investors to take advantage of short term fluctuations in the forex market.

Another commonly used forex trading strategy is known as the stop loss order. This forex trading strategy is used to protect investors and it creates a predetermined point at which the investor will not trade. Using this forex trading strategy allows investors to minimize losses. This strategy can however, backfire and the investor can run the risk of stopping their forex trading which could actually go higher and it really is up to the individual trader to choose whether or not to use this forex trading strategy.

An automatic entry order is another of the forex trading strategies that is commonly used and this strategy is used to allow investors to enter into forex trading when the price is right for them. The price is predetermined and once reached the investor will automatically enter into the trading.

All these forex trading strategies are designed to help investors get the most from their forex trading and help to minimize their losses. As mentioned earlier knowledge of these forex trading strategies is vital if you wish to be successful in forex trading.

how to draw a trendline?

2006-04-15T10:58:00.000-07:00

It is now time for knowing how to put important points on your forex chart.
The support and resistance lines (points) can be seen in the chart when the price in most cases retraces. It can go up and down. Like bouncing ball. But when the price of the currency crosses that points it will go very fast. So it is very good idea to set Stop Loss there or +- 20-30 points below or above that point.

As you can see there are a lot of points that you can set up for your take profit or stop loss. You can see now that USDJPY now is on the "channel" between 115.29 and 121.21. We can set up now stop loss at thease points for buying or selling points. In the "lower" timeframes you can also draw thease points but the lower timeframes the importance is less. If you will draw trendline in 15 min chart there is a small probability that this point is important. Daily charts is a good timeframe.

Forex Trading Tips

2006-04-11T01:31:00.000-07:00

Forex trading is buying and selling the foreign currencies of different countries. It has a similarity with stock trading in that the foreign currencies behave like shares of the currency institutions of the countries. Like stock prices, these also move up and down with time-dependent volatility.

It is possible to buy a currency low, buy long and sell short another high currency. It needs meticulous pursuit of the exchange rates of currencies you want to trade. One needs to keep up a continuous scrutiny of the trajectory every particular currency vis-à-vis the other currencies, pair-wise.

It often has leverage enough to induce highly profitable arbitrage and hedging. Each internationally accepted currency has a market and the Forex market is the superset of all these markets taken together. Traders make their own basket or inventory of Forex and trade according to their anticipation of movements.

For example, the primary Forex statistics for the euro in relation to the German mark prior to 1999 reveals a lot of interesting features and profit potential of dollar or German Mark in relation the euro. From the evidence it appears somewhat surprisingly that the euro lost ground against the US dollar in Forex spot trading, and in quite a few dimensions did not match the international transaction role of the German mark.

The euro changed the structure of the Forex market and increased market transparency through currency elimination. This exposed the dealers to higher inventory risks as their respective inventory imbalances became exposed easily to other dealers.

The increased inventory costs were recovered by the dealers in the euro markets through higher spreads. This made the euro a less attractive transaction medium than the German mark. This shows how trading in Forex involves both risk and profit potentials.

Earlier, the fore market was the trading ground of millionaires and billionaires only. Now with the introduction of online Forex trading, the average person is able to create amazingly large amounts of wealth from safe online investments in foreign currencies. Online forex trading is nothing but Forex trading transacted through internet links and email through a competent broker.

No technical know how, big "risk", or large investment, hard work is needed. Online forex trading investment lets you use your dollar to control an investment two hundred times as high, $1 to control an investment worth $200, $1000 to control $200,000 and so on and on worth of investment.

Through online forex trading, you are now able to invest your money to fetch more money for you like the millionaires and billionaires, instead of you laboring hard for your money.

Online Forex trading is real fun. It is often the most striking and profitable internet investing opportunity because you can do it from your PC or connected laptop from any place in any country in the world. You don't need any stocks or big inventory in this trading. In online Forex trading, all you do is, just open an account with one of the brokers with as little as $300 or so. Of course, the larger your initial investment, the faster you stand to gain wealth.

Then you simply have to follow simple instructions to purchase and sell the currencies. You buy when the price of the currency is low. Within a few seconds or minutes, the price may go up, and you may sell it and make a profit. This way, by just buying, selling and trading these foreign currencies for about 3 or 4 hrs in a day, you can easily make $500-$1000!

Forex trading is easy money. Especially with the introduction of online trading, it is virtually a continuous upward money spiral for any alert person with a competent broker.

What is an Online Forex Trading?

2006-04-07T08:27:00.000-07:00

For-ex stands for Foreign Exchange; it is a global market for dealing currencies at floating exchange rates. The foreign exchange is world’s biggest currency market, on an average everyday dollar one to two trillion is traded in the foreign exchange. The trade is mostly done over the internet and telephone lines. Online forex trading is a fast, safe and easy mode of investing. It offers huge returns like twenty to thirty percent every month, yes unbelievable but truth, however that’s only in some cases and you need a lot of experience to be able to extract that amount of interest!

There is no fixed centre for the trade so all the trade is done over telephone, internet and fax. The foreign exchange trade witnessed a massive boom only after online forex trading systems were introduced, internet and telephone has helped the trade grow from $70 billion a day in the 80s to around $1.5 trillion to $2 trillion today.

The currency market is made up of around five thousand institutions most of which are international banks, central government banks, commercial companies as well as big brokers and all these are connected with each other and do business on the go through online forex trading system. The major centers for online forex trading are New York, Frankfurt, London, Paris, Tokyo, Hong Kong, Bombay among others, and all these centers also communicate and deal through online forex trading. The benefits of online forex trading are listed below:

- Currency market never sleeps: online forex trading allows you to keep track and deal from anywhere at anytime.
- Mini accounts: some websites offer mini accounts that allow you to get started with as less as $200.
- No Commission! – Online forex trading is commission free, there’s no exchange or hidden fee either. Your broker earns from the spreads.
- Instant: it’s instant unlike offline trade which may involve paperwork.

The nature of the market is such that risk comes inherent and can not be separated but risk can be minimized if you are trading at the right point of time and the right point of time can be anytime only online forex trading allows you to be there at the right time as all other methods as explained above are slow and usually take up a lot of time in processing.

how to draw a trendline?

2006-04-06T13:03:00.000-07:00

It is a basic question for the forex begginers. Drawing a trendline for the currency pairs is very easy way to know if the pair is bullish (rising) or bearish (falling). It will tell you also the support and resistance.

For example I will show you AUDUSD pair and the main resistance and support trendlines.

In the picture below you can see the weekly chart for AUD USD without trendlines.

The first thing you should pay attention to is the points of the price where the price stops and goes down.

So as you see that the first line should go here (downward line):

You can see that there is downward slope and there is a resistance at 0,7460. If the price goes near to the support or resistance level it is wise to be out of the market at this moment because it can go back or it can go through that resistance level but the change can be very significant.

As you can see at the next picture there is an example of this situation.

The next red line shows that there was a significant support line. When that line was broken that line is now resistance.

In next few days I will try to explain some few important things about resistance and support lines.

What’s An Online Forex Broker?

2006-04-02T06:20:00.000-07:00

Before you start trading in the FOREX markets you will need to set up an account with what is known as a Forex Broker. Once you start your search for the perfect broker, you may feel overwhelmed by the number of them who offer their services online.

Deciding on a broker requires a little bit of research on your part, but the time spent will give you a much better idea of the services that are available and the fees charged by various of these brokers.

Strictly speaking, a forex broker is an individual or a company that buys and sells the orders placed by the trader according to his decisions. The way brokers earn money is by charging a commission or a fee for their services.

All serious brokers need to be associated with a large financial institution such as a bank in order to provide the amount of funds necessary for margin trading. In the United States a broker must be registered as a Futures Commission Merchant (FCM) and also with the Commodity Futures Trading Commission (CFTC). These credentials will ensure you have peace of mind, knowing that you have protection against any case of fraud and abusive trade practices.

What you’ll always want will be to find a broker who executes orders quickly and with minimum slippage. All reputable online brokers will offer automatic execution of orders and will let you know their policies regarding slippage. A good broker should be able to tell you how much slippage can be expected in both normal and volatile markets.

Margin accounts are the basis of Forex trading, so you better be sure you clearly understand the broker's margin terms before setting up your trading account. You also need to know the margin requirements and how margin is calculated. It may be the case that margin change according to the currency traded; or maybe the margin is the same every day of the week or maybe not; so you have to find out and have all this information pretty clear. Additionally some brokers may offer different margins depending on what kind of account you are trading, i.e. a mini or standard account.

One more thing that you should consider is that the trading station software available to you from your broker is very important for your success as an online forex trader. You should get a feel for the options that are available by trying out a demo account at a few of the available online brokers. Always keep in mind that above all, you are looking for reliability and the ability to perform well in fast-moving markets. A good trading software should offer automatic trading and may have special features such as trailing stops and trading from the chart, which is a great plus. Some features may only be available at an extra cost, so be sure you understand what your trading needs are and how much the broker charges to provide them. If you conclude those extras are necessary for your trading style and techniques it would be a good investment to have them in your arsenal.

Lastly, one more thing you should consider when choosing an online forex broker should be to find out whether trader’s funds are insured or not and what’s the extent of that insurance.

Consider all these issues and you will be sure you have chosen the best broker for your trading style.

Author:
Adrian Pablo is a Forex freelance writer with articles published in a number of places. Get a free report on Fibonacci Trading and learn more about the world of trading.

http://www.1-forex.com

Terms:Articles may be reprinted provided content is not edited and links are kept live
Source: www.articledepot.co.uk

Currency pair correlations

2006-03-11T11:27:00.000-08:00

I have made some research about correlations in the most popular crosses like eur/usd and usd/jpy etc.

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In Wikipedia.org you can see the explanation of correlation.

The term correlation can also mean the cross-correlation of two functions or electron correlation in molecular systems.

In probability theory and statistics, correlation, also called correlation coefficient, indicates the strength and direction of a linear relationship between two random variables. In general statistical usage, correlation or co-relation refers to the departure of two variables from independence. In this broad sense there are several coefficients, measuring the degree of correlation, adapted to the nature of data.

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The correlation is based on 527 cases of 4H periods (large statistical probe).
The cases marked in red are statistically important. If the cross is more closer to 1 it is more correlated.

carry trading

2006-02-05T05:42:00.000-08:00

I have tried oanda demo account to check the carry trading method. So I have opened positions with a high interest rates and theirs moving averanges (50MA, 100MA, 200MA) are convergent with interest rate (short or long).

The result after 1 month I have seen that:

The detailed account history is given HERE.

As you can see - I have gained from interest rate more than 7% ! Plus more than 50% from difference of currency rates.
The gain was 4149 PIPS.
I have tried this method on other accounts and the results was amazing. Every trade was successful!
The key to the success in forex is patience.

New orders

2006-02-03T23:42:00.000-08:00

In friday I have closed GBP/CHF position. It was so static that I thought that it will not move anymore (In week or two).
GBP/CHF OPEN: 2,2636 CLOSE: 2,2883 Profit in PIPS 247+ Interest 14,25

I have also opened Short position in EUR USD at 1,1987. I will close that position if there will be more than 100 pips.

corrections

2006-02-02T03:08:00.000-08:00

I have closed EUR USD short positions and opened NZD / JPY and USD/ JPY positions.

My trades

2006-02-02T00:37:00.000-08:00

OK, I have told that I will tell my trades (most 95% successful).

I have now 3 trades:

CAD / JPY LONG OPEN at 103,11 , Stop: 102,21 - great pair. It is correlated with oil prices and has a great interest rate.

EUR / USD SHORT opened at 1.2163, stop: 1.2113 - I waited for news about the FED Rate. A lot of markets will be affected by this indicator. People from US will get theirs money from other than US markets.

GBP / CHF LONG opened at 2,2636, stop: 2,2806 - big interest rate.

common forex mistakes

2006-01-31T23:06:00.000-08:00

1) Reading news and analizing them

Many times, seemingly straightforward news releases from government agencies are really public relation vehicles to advance a particular point of view or policy. Such “news,” in the forex markets more than any other, is used as a tool to affect the investment psychology of the crowd. Such media manipulation is not inherently a negative. Governments and traders try to do that all
the time.
Often, news that might seem definitively bullish to someone new to the forex market might be as bearish as you can get.

2) Don’t trade surges.

A price surge is a signature of panic or surprise. In these events, professional traders take cover and see what happens. The retail trader also should let the market digest such shocks. Trading during an announcement or right before, or amid some turmoil, minimizes the odds of predicting the probable direction. Technical indicators during surge periods will be distorted. You should wait for a confirmation of the new direction and remember that price action will tend to revert to pre-surge ranges providing nothing fundamental has occurred.

3) Simple is better.

The desire to achieve great gains in forex trading can drive us to keep adding indicators in a never-ending quest for the impossible dream. Similarly, trading with a dozen indicators is not necessary.
Many indicators just add redundant information. Indicators should be used that give clues to:
1) trend direction,
2) resistance,
3) support
4) buying and selling pressure.

4) Using high leverange with a huge quantity of trade

If you will trade having in an account 1000$ and making trades of 2 or 3 lots (200 000
or 300 000) with high leverange you are playing with fire. Today you can choose brokers that will offer leverange of 400:1. So you will be able to use 1 lot just for 250$ and one pip trade will be 10$. Brokers are doing that knowingly - they gets more for the spread and waiting for you to make an additional deposit.

5) trying to scalp

It is common mistake in traders. They are using also a lot of monitor to look at a few pairs at the same time. They wants to have from trade 2-5 pips. Today brokers offers 1.5 to 5 pips for the spread in major pairs. That will encourage traders to scalp and making them richer.
Trader that is using that technique has a small margin of lapse. They will say that in forex it is impossible to gain more than 10% monthly.
I have tried few methods and I can say that if you will use the simple methods and putting orders for a 2-3 weeks you can gain more than 30% in interest rates and difference in course.

6) gape at the charts all the time

Beginners in forex will stare all the time looking at the charts. They will try to catch the best price, pits and hillocks of the price. So they will try to scalp. It can lead them to make an another deposit.

forex websites

2006-01-27T08:36:00.000-08:00

I would like to show my favourite forex websities:

http://forexstreet.com a great site with news, forex strategies, signals etc.
http://babypips.com basic and intermediate knowlege for beginners and intermediate forex traders.
http://reuters.com fresh news from all around the globe.

2006-01-26T10:27:00.000-08:00

Carry trading

In forex there are swaps or interest rates for each pair. For example aud/jpy is 1.1 pip for long position and -1.17 for short position for that pair. So you can have additional money just for carry that position for few days.

For instance, the primary interest rates in Great Britain are much higher than in Japan, so if a trader buys GBP, he/she will earn interest at 5 PM EST. on the other hand, if he/she sells GBP in this currency pair, he/she will pay interest at 5 PM EST.

It's like free money, right? Well, not quite. The big risk is the uncertainty of exchange rates. Remember, you've still got to pay back the money in a foreign currency. If your domestic currency falls in value relative to the currency you borrowed, then you run the risk of losing money. Also, these transactions are generally done with a lot of leverage, so a small movement in exchange rates can result in huge losses unless hedged appropriately.

An example of a "yen carry trade" is borrowing 1,000 yen from a Japanese bank, exchanging the funds into U.S. dollars and buying a bond for the equivalent amount. Assuming that the bond pays more than the amount you must pay the bank for borrowing the funds, and the exchange rate does not move adversely, you will earn a profit.

2006-01-25T13:23:00.000-08:00

BENEFITS OF FOREX TRADING

There are many benefits and advantages to trading Forex. Here are just a few reasons why so many people are choosing this market as a business opportunity:

1. LEVERAGE: In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make extraordinary profits and at the same time keep risk capital to a minimum. Some Forex firms 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.

2. LIQUIDITY: Because the Forex Market is so large, it is also extremely liquid. This means that 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 the online trading platform to automatically close your position at your desired profit level (limit order), and /or close a trade if a trade is going against you (stop order).

3. PROFIT IN BOTH ‘RISING’ AND ‘FALLING’ MARKETS: On the stock markets, you can only make money if shares are rising, but in economic recession and falling ‘bear’ markets, there is little chance of making big money. Forex is different. One of the most exciting advantages of FX trading is the ability to generate profits whether a currency pair is ‘up’ or ‘down’. A trader can profit by taking a ‘long’ position, (buying the currency pair and buying it back at a lower price), or a ‘short’ position, (selling the currency pair and buying it back at a lower price). For example, if you think the US dollar will increase in value vs. The Japanese Yen then you will buy Dollars and sell Yen (go long). If you think the Yen will increase in value against the Dollar then you will sell Dollars and buy Yen (go short). As long as the trader picks the right direction, a potential for profit always exists.

4. 24HRS: From Sunday evening to Friday Afternoon EST the Forex market never sleeps. This is very desirable for those who want to trade on a part-time basis, because you can choose when you want to trade, morning, noon or night.

5. FREE ‘DEMO’ ACCOUNTS,NEWS,CHARTS AND ANALYSIS: Most Online Forex firms offer free ‘Demo’ accounts to practice trading, along with breaking Forex news and charting services. These are very valuable resources for traders who would like to hone their trading skills with ‘virtual’ money before opening a live trading account.

6. ‘MINI’ TRADING: One might think that getting started as a currency trader would cost a lot of money. The fact is, it doesn’t. Online Forex Firms now offer ‘mini’ trading accounts with a minimum account deposit of only $1 with no commission trading. This makes Forex much more accessible to the average individual, start-up capital.

2006-01-24T12:49:00.000-08:00

What is FOREX?

The Foreign Exchange, also referred to as the “Forex” or “Spot FX” market, is the largest financial market in the world, with over $ 1.2 trillion changing hands every single day. If you compare that to the $25 billion a day volume that the New York Stock Exchange trades, you see how giant the Foreign Exchange really is. In fact it is 3 times larger than all of the Equity and Treasury markets combined !

What is traded on the Foreign Exchange ? The answer is money. Forex trading is where the currency of one nation is traded for that or another. Therefore, Forex trading is always traded in pairs. The most commonly traded currency pairs are traded against the US Dollar (USD). They are called ‘the majors’. The major currency pairs are the Euro Dollar (EUR/USD); the British Pound (GBP/USD); the Japanese Yen (USD/CHF); and the Swiss Franc (USD/CHF).

Because there is not a central exchange for the Forex market, these pairs and their crosses are traded over the telephone and online through a global network of banks, multinational corporations, importers and exporters, brokers and currency traders.

Traditionally, currency trading has been a ‘professionals only’ market available exclusively to banks and large institutions, however, because of the rise of the new E-economy, online Forex trading firms are now able to offer trading accounts to ‘retail’ traders like you and I. Now almost anyone with a computer and an Internet connection can trade currencies just like the world’s largest banks do.

My first blog post

2006-01-23T02:37:00.000-08:00

Hello,

My name is Tom and I am forex trader. I am trading forex for 2 years.
I have made a blog that will show my trades and results.
I will try to put here a lot of systems, conceptions etc.