FOREX Trading :: Overview

FOREX Trading :: Overview Foreign exchange, forex or just FX are all terms used to describe the trading of the world's many currencies. The forex market is the largest market in the world, with trades amounting to more than USD 1.5 trillion every day. This is more than one hundred times the daily trading on the NYSE (New York Stock Exchange). Most forex trading is speculative, with only a few percent of market activity representing governments' and companies' fundamental currency conversion needs. Unlike trading on the stock market, the forex market is not conducted by a central exchange, but on the “interbank” market, which is thought of as an OTC (over the counter) market. Trading takes place directly between the two counterparts necessary to make a trade, whether over the telephone or on electronic networks all over the world. The main centres for trading are Sydney, Tokyo, London, Frankfurt and New York. This worldwide distribution of trading centres means that the forex market is a 24-hour market.FOREX trading is a very specialized form of day trading. (Day traders invest by buying and selling securities, or opening and closing their market positions, on the same day.) Because of the high margins available in FOREX, investors can control large amounts of currency with relatively small outlays of actual cash. This leverage creates the potential for huge profits as well as huge losses. The would-be FOREX trader must remain aware that, just as with any other investment vehicle, financial loss is always a possibility. The FOREX market provides a variety of unique and attractive investing opportunities. Study the articles of this section carefully, as well as other information and tools for the FOREX market. Safeguard yourself by becoming familiar with various risk management concepts. You'll need an account and trading platform with a reputable broker in order to begin trading. One such firm, known as Easy-Forex, offers full-service-, customizable-, and commission-free trading and support based on your experience and desired activity level. They give you full control over your account, even leverage and spread amounts.A currency trade is the simultaneous buying of one currency and selling of another one. The currency combination used in the trade is called a cross (for example, the Euro/US Dollar, or the GB Pound/Japanese Yen.). The most commonly traded currencies are the so-called “majors” – EURUSD , USDJPY , USDCHF and GBPUSD . The most important forex market is the spot market as it has the largest volume. The market is called the spot market because trades are settled immediately, or “on the spot”. In practice this means two banking days.

Forex Strategy: Trading with Stochastics

Forex Strategy: Trading with Stochastics Stochastics are amongst the most popular technical indicators when it comes to Forex Trading. Unfortunately most traders use them incorrectly. In this article we will review the correct way to use this popular technical indicator.George Lane developed this indicator in the late 1950s. Stochastics measure the current close relative to the range (high/low) over a set of periods.Stochastics consist of two lines:%K – Is the main line and is usually displayed as a solid line%D – Is simply a moving average of the %K and is usually displayed as a dotted lineThere are three types of Stochastics: Full, fast and slow stochastics. Slow stochastics are simply a smother version of the fast stochastics, and full stochastics are even a smother version of the slow stochastics.Interpretation:Buy when %K falls below the oversold level (below 20) and rises back above the same level.Sell when %K rises above de overbought level (above 80) and falls back below the same level.The interpretation above is how most traders and investors use them; however, it only works when the market is trendless or ranging. When the market is trending, a reading above the overbought territory isn't necessary a bearish signal, while a reading below de oversold territory isn't necessary bullish signal.Trending marketWhen the market is trending is necessary to adapt the oscillator to the same conditions: When the market is trending up, then the signals with the higher probability of success are those in direction of the trend “Buy signals”, on the other hand when the market is trending down, selling signals offer the lowest risk opportunities.Thus when the market is trending up, we will only look for oversold conditions (when the stochastics fall below the oversold level [below 20] and rises back above the same level) to get ready to trade, and in the same way, when the market is trending down we will only look for overbought conditions (when the stochastics rise above de overbought level [above 80] and falls back below the same level.Taking all overbought/oversold signals during a trending market will lead us to many whipsaws. If you are not comfortable with the number of signals given, try expanding your trading to other currency pairs.Trend-less marketDuring a ranging market we could use the interpretation explained above to trade off stochastics.DivergenceDivergence trades are amongst the most reliable trading signals in the Forex market. A divergence occurs either when the indicator reaches new highs/lows and the market fails to do it or the market reaches new highs/lows and the indicator fails to do it. Both conditions mean that the market isn't as strong as it used to be giving us opportunities to profit from the market.Stochastics can also be used to trade off divergences.Price behaviorA price behavior can be incorporated into any kind of system or Forex strategy. When using divergences or overbought/oversold condition with a price behavior approach, the probability of success of our signals increases enormously. Why? Because price dictates at the end, how all indicators will behave, it also gives us a lot of information about the probable direction it will take in the future.I hope this article helps you become a better trader.Don't forget to read our risk disclaimer.

Getting Started in the FOREX

Getting Started in the FOREX Market The FOREX market is the largest trading market in the world, and growing numbers of individuals are being drawn to it. But before you begin trading in it, be sure that the broker you choose meets certain criteria, and that you take the time learn the market and find a trading strategy that works for you. The best way to learn to trade FOREX is to open up a demo account and trade with it. Just as in equity markets, the two basic types of strategy in the FOREX market are Technical Analysis and Fundamental Analysis. But among FOREX traders the most common strategy used by far is Technical Analysis. Let’s compare the two. Fundamental Analysis in the FOREX market is often very complex, and it's usually only used to predict long-term trends; some investors, however, do trade short-term based strictly upon news releases. There are many different fundamental indicators of currency values, and they’re released at various times. But these reports are not the only fundamental factors should be watched. There are also a number of meetings that are held periodically, from which come quotes and commentaries, and they can have a very definite effect on markets as well. These meetings are often called to discuss interest rates, inflation, or other issues that affect currency valuations. Even changes in wording when talking about certain issues can cause spikes in market volatility. Reading these reports and examining the commentary can help FOREX traders using Fundamental Analysis to obtain a better understanding of long-term market trends. They can also help short-term traders to profit from extraordinary events. If you choose to use a fundamental strategy, be sure to keep an economic calendar close-by so that you’ll know when these reports are released. Technical analysts in the FOREX market evaluate price trends. The only real difference between Technical Analysis in FOREX and Technical Analysis in equity markets is the time frame: FOREX markets are open around the clock,24 hours a day. As a result, some forms of analysis which factor in time must be modified in order to work in the 24-hour FOREX market. Some of the more common forms of technical analysis used in the FOREX market include Elliot Waves, Fibonacci studies, and Pivot points. Many technical analysts combine these studies in order to make more accurate predictions. The most frequent combination is that of the Fibonacci studies with Elliott Waves. Most successful traders develop an investment strategy, and with repeated use, perfect it over time. Some people focus on one calculation or study; others may utilize a broad range of analysis tools to determine their investments. Most experts suggest using a combination of both Fundamental and Technical analysis. It is the individual investor, however, who must decide what fits and works best for him or her. This is usually accomplished through trial and error. Here are several suggestions to consider as you get started in the FOREX market: 1) Open a demo account and paper trade until you are comfortable and confident that you can make a consistent profit. In other words, isolate your learning mistakes to the time in which they won’t cost you. 2) Trade without emotion. Don't keep mental stop-loss points. Always set your stop-loss and take-profit points to execute automatically and don't change them unless it’s absolutely necessary. Make your decisions and stick with them. 3) Stay with the trend; if you go against it, make sure you have a very good reason. Movements in the FOREX market tend to be in trends more than anything else; you therefore have a higher chance of success in trading with the trend. The FOREX market is the largest trading market in the world, and growing numbers of individuals are being drawn to it. But before you begin trading in it, be sure that the broker you choose meets certain criteria, and that you take the time learn the market and find a trading strategy that works for you. The best way to learn to trade FOREX is to open up a demo account and trade with it. Just as in equity markets, the two basic types of strategy in the FOREX market are Technical Analysis and Fundamental Analysis. But among FOREX traders the most common strategy used by far is Technical Analysis. Let’s compare the two. Fundamental Analysis in the FOREX market is often very complex, and it's usually only used to predict long-term trends; some investors, however, do trade short-term based strictly upon news releases. There are many different fundamental indicators of currency values, and they’re released at various times. But these reports are not the only fundamental factors should be watched. There are also a number of meetings that are held periodically, from which come quotes and commentaries, and they can have a very definite effect on markets as well. These meetings are often called to discuss interest rates, inflation, or other issues that affect currency valuations. Even changes in wording when talking about certain issues can cause spikes in market volatility. Reading these reports and examining the commentary can help FOREX traders using Fundamental Analysis to obtain a better understanding of long-term market trends. They can also help short-term traders to profit from extraordinary events. If you choose to use a fundamental strategy, be sure to keep an economic calendar close-by so that you’ll know when these reports are released. Technical analysts in the FOREX market evaluate price trends. The only real difference between Technical Analysis in FOREX and Technical Analysis in equity markets is the time frame: FOREX markets are open around the clock,24 hours a day. As a result, some forms of analysis which factor in time must be modified in order to work in the 24-hour FOREX market. Some of the more common forms of technical analysis used in the FOREX market include Elliot Waves, Fibonacci studies, and Pivot points. Many technical analysts combine these studies in order to make more accurate predictions. The most frequent combination is that of the Fibonacci studies with Elliott Waves. Most successful traders develop an investment strategy, and with repeated use, perfect it over time. Some people focus on one calculation or study; others may utilize a broad range of analysis tools to determine their investments. Most experts suggest using a combination of both Fundamental and Technical analysis. It is the individual investor, however, who must decide what fits and works best for him or her. This is usually accomplished through trial and error. Here are several suggestions to consider as you get started in the FOREX market: 1) Open a demo account and paper trade until you are comfortable and confident that you can make a consistent profit. In other words, isolate your learning mistakes to the time in which they won’t cost you. 2) Trade without emotion. Don't keep mental stop-loss points. Always set your stop-loss and take-profit points to execute automatically and don't change them unless it’s absolutely necessary. Make your decisions and stick with them. 3) Stay with the trend; if you go against it, make sure you have a very good reason. Movements in the FOREX market tend to be in trends more than anything else; you therefore have a higher chance of success in trading with the trend.

FOREX BASIC INFORMATIONS

FOREX BASIC INFORMATIONS Foreign Exchange (FOREX) is the arena where a nation's currency is exchanged for that of another. The foreign exchange market is the largest financial market in the world, with the equivalent of over $1.9 trillion changing hands daily; more than three times the aggregate amount of the US Equity and Treasury markets combined. Unlike other financial markets, the Forex market has no physical location and no central exchange. It operates through a global network of banks, corporations and individuals trading one currency for another. The lack of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one zone to another in all the major financial centers. Traditionally, retail investors' only means of gaining access to the foreign exchange market was through banks that transacted large amounts of currencies for commercial and investment purposes. Trading volume has increased rapidly over time, especially after exchange rates were allowed to float freely in 1971. Today, importers and exporters, international portfolio managers, multinational corporations, speculators, day traders, long-term holders and hedge funds all use the FOREX market to pay for goods and services, transact in financial assets or to reduce the risk of currency movements by hedging their exposure in other markets. MG Financial Group’s combination of low margin and high leverage has changed the way the Interbank currency market operates. We have done this by opening the doors of Forex to retail investors, giving them the professional tools and services needed to trade effectively in an independent atmosphere. MG Financial Group, now operating in over 100 countries, serves all manner of clients, comprising speculators and strategic traders. Foreign Exchange (FOREX) is the arena where a nation's currency is exchanged for that of another. The foreign exchange market is the largest financial market in the world, with the equivalent of over $1.9 trillion changing hands daily; more than three times the aggregate amount of the US Equity and Treasury markets combined. Unlike other financial markets, the Forex market has no physical location and no central exchange. It operates through a global network of banks, corporations and individuals trading one currency for another. The lack of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one zone to another in all the major financial centers. Traditionally, retail investors' only means of gaining access to the foreign exchange market was through banks that transacted large amounts of currencies for commercial and investment purposes. Trading volume has increased rapidly over time, especially after exchange rates were allowed to float freely in 1971. Today, importers and exporters, international portfolio managers, multinational corporations, speculators, day traders, long-term holders and hedge funds all use the FOREX market to pay for goods and services, transact in financial assets or to reduce the risk of currency movements by hedging their exposure in other markets. MG Financial Group’s combination of low margin and high leverage has changed the way the Interbank currency market operates. We have done this by opening the doors of Forex to retail investors, giving them the professional tools and services needed to trade effectively in an independent atmosphere. MG Financial Group, now operating in over 100 countries, serves all manner of clients, comprising speculators and strategic traders.

Training: What a Good Forex Training Program Should Include
Should new Forex traders take Forex trading courses or join a Forex training program? Definitely yes; by now you have probably heard that only 5% of traders achieve consistent profitable results when trading the Forex market. The main reason for this is the lack of education. Don't get me wrong here, taking a Forex training program or a Forex trading course won't guarantee profitable results, nothing can, but choosing the right Forex training program or Forex trading course will definitely put the odds in your favor.Before spending any amount of money on any Forex trading course or Forex training program there are some important aspects you need to take in consideration. There are many training programs available, but not every one of them suits the needs of every trader.The first thing you should be looking in a Forex training program is the content of the material. Unfortunately, most courses or training programs focus or spend most of the time on basic concepts. Though these basic concepts are important, spending most of the course on them won't help the trader to make consistent results.The following subjects are what I consider the most important aspects of trading and every training program or trading course should address:Forex trading basics.Review basic concepts such as: margin, type of orders, a little background, bid/ask, rollover, etc. You need to make sure you understand every single concept to perfection.Main drawbacks of Forex traders.Being aware of the common mistakes made by Forex traders and knowing how to handle them will prevent new traders from making those mistakes.Technical and fundamental analysis.These are the two main approaches adopted by Forex traders. Knowing how to properly apply each concept will definitely put the odds in your favor.The three pillars of Forex trading. I consider that these three subjects have the most impact on every trader trading account.Forex trading system development.Having the right system is a must if you want to have consistent profitable results. Having a system that doesn't fit you will cause a series of problems that will make your trading account vanish away (second guessing the system, not following your system, etc.)Money management.This is considered by many successful traders to be the most important single aspect of trading. Money management helps to increase your profits geometrically and at the same time limit your losses (i.e. a good risk reward ratio of about 2:1 will make you money in a Forex trading system that is right only 38% of the time.)Trading psychology.Being aware and knowing hot to handle the psychological barriers that affect every trader decision will put the odds in your favor.Other important aspects every training program should include are:Developing habits for success (such as discipline patience, taking responsibility of every action, commitment, etc.,) understanding and taking our trading as a business, risk and trade management.Another important aspect you should take into consideration when choosing a Forex training program is the mechanics of it, getting to know how the training program works.A good Forex course will have the following:A live conference room, to apply everything learned under live market conditions.One-on-one coaching, every trader has different needs and requires special attention. For instance a trader wanting to improve the system and requires individual feedback from the instructor about it.Online trading course, a course that could be accessible through internet. A plus is a course where you are able to access the course at the convenient time for you, so you don't have to change your lifestyle.A forum, where members can talk just about everything related to the Forex market and the Forex training program.Trading the Forex market is no easy task. It requires a lot of hard work. Making the right decision will definitely put the odds in your favor. Take your time when doing your diligence because it is a big and important step in a trader's trading career.


Forex Broker: Choosing the right Forex Broker
Sometimes it's hard to make a decision on which Forex broker to open our trading account, there are just too many of them. Most of them have different features, capabilities, weaknesses and advantages, for this reason I have created a checklist that can help you decide the broker to use in your Forex adventure.1. Is it regulated?The first question you have to ask yourself is: is the broker I want to use Regulated ? There must be no doubt about this first point. All regulated brokers must submit financial reports to regulatory authorities, and when they fail to do it, authorities have the right to fine them or terminate their membership. This enforces Forex brokers to keep transparent financial reports.The brokers must be regulated by their local regulatory authorities, for instance, for brokers based in the US , they must be regulated by the NFA (National Futures Association) and CFTC (Commodity Futures Trading Commission), Swiss based brokers must be regulated by the FDF (Swiss Federal Department of Finance) and so on.Also when a Forex broker is regulated allows investors to dispute any resolution, increasing the investor protection.2. Trading ConditionsThis point refers to the features of the trading platform and the trading conditions with the chosen broker. Amongst the most important factors are:Spread - Obviously the smaller the spread on currency pairs the better the conditions are for investors and traders.Platform execution - Trading execution refers to how fast and consistent are the execution of trades. Some brokers guarantee fast and transparent executions during normal market conditions.Fractional trading – Some brokers allow investors and traders to trade on a fractional basis, instead of trading full lots “100,000 units” or “300,000 units”, they allow you to trade “163,345 units” or “325,911 units”. This is very helpful for trades risking certain percentage of their balance on each trade.Safety of funds – We need to make sure our trading funds are kept in a segregated account or at least insured.Trading platform – Easy to use and understand platform, is it reliable during fast moving markets? And what extra features it offers such as: one click buying/selling, trading directly from a chart, supports mobile devices, trailing stops, etc.)Minimum investment – What is the minimum amount of money required to open a trading account? This aspect is very useful because before trading your full account, you need to test the waters and see how well you perform with an account with limited funds (after trading a demo account).Margin (leverage) – What kind of leverage can be used with the chosen broker? Just to make sure our leverage requirements by our Forex strategy and methodology (leverage above 100:1 is not advisable).Commissions – Some brokers charge commission, it is ok if they do if the spread is smaller than other brokers.3. DiligenceHopefully you have eliminated most brokers at this point. You should have 3 or 4 finalists. In this step do your diligences on forums, ask other traders about their experiences using their brokers, and so forth.Some forums where you can ask for broker information are: ForexFactory, MoneyTec, ForexNews.If brokers are registered by their local regulatory authorities, you can visit the regulator website and you will find plenty of information about Forex brokers. Some of them publish resolutions regarding Forex brokers.Amongst the aspects you should ask and get informed are:Customer service – This aspect is the most important of them all, are they rude to customers? Are they willingly to help customers? These are the questions you should ask in forums and fellow traders.Slippage – Slippage is the difference between the price where the trade was executed and actual value of it. Do they honor stop loss and take profit levels? Do they guarantee it? If any one had any discrepancies, did their broker revert the result?Manual execution – Some brokers don't like scalpers, if they catch someone doing it, they will put this trader into manual execution, so a dealer (human) must accept all transactions made by this trader. Do they do this?Re-quotes – a re-quote happens when you click the buy/sell button and the platform doesn't accept our price, so it will give us another quote for that particular trade.4. TestingIn this phase we should test our Forex broker, first on a demo account to see how it works, also test your system to see how it performs. If you are satisfied with the results, then try the same platform with limited funds to see how it performs on real trades. If you are satisfied again then open your full trading account with the chosen broker.I hope this checklist help you all traders to take the right decision when choosing brokers.

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

FOREX CHENNAI ZONE TRADING

Monday, July 30, 2007

Getting Started in the FOREX Market
The FOREX market is the largest trading market in the world, and growing numbers of individuals are being drawn to it. But before you begin trading in it, be sure that the broker you choose meets certain criteria, and that you take the time learn the market and find a trading strategy that works for you. The best way to learn to trade FOREX is to open up a demo account and trade with it. Just as in equity markets, the two basic types of strategy in the FOREX market are Technical Analysis and Fundamental Analysis. But among FOREX traders the most common strategy used by far is Technical Analysis. Let’s compare the two. Fundamental Analysis in the FOREX market is often very complex, and it's usually only used to predict long-term trends; some investors, however, do trade short-term based strictly upon news releases. There are many different fundamental indicators of currency values, and they’re released at various times. But these reports are not the only fundamental factors should be watched. There are also a number of meetings that are held periodically, from which come quotes and commentaries, and they can have a very definite effect on markets as well. These meetings are often called to discuss interest rates, inflation, or other issues that affect currency valuations. Even changes in wording when talking about certain issues can cause spikes in market volatility. Reading these reports and examining the commentary can help FOREX traders using Fundamental Analysis to obtain a better understanding of long-term market trends. They can also help short-term traders to profit from extraordinary events. If you choose to use a fundamental strategy, be sure to keep an economic calendar close-by so that you’ll know when these reports are released. Technical analysts in the FOREX market evaluate price trends. The only real difference between Technical Analysis in FOREX and Technical Analysis in equity markets is the time frame: FOREX markets are open around the clock,24 hours a day. As a result, some forms of analysis which factor in time must be modified in order to work in the 24-hour FOREX market. Some of the more common forms of technical analysis used in the FOREX market include Elliot Waves, Fibonacci studies, and Pivot points. Many technical analysts combine these studies in order to make more accurate predictions. The most frequent combination is that of the Fibonacci studies with Elliott Waves. Most successful traders develop an investment strategy, and with repeated use, perfect it over time. Some people focus on one calculation or study; others may utilize a broad range of analysis tools to determine their investments. Most experts suggest using a combination of both Fundamental and Technical analysis. It is the individual investor, however, who must decide what fits and works best for him or her. This is usually accomplished through trial and error. Here are several suggestions to consider as you get started in the FOREX market: 1) Open a demo account and paper trade until you are comfortable and confident that you can make a consistent profit. In other words, isolate your learning mistakes to the time in which they won’t cost you. 2) Trade without emotion. Don't keep mental stop-loss points. Always set your stop-loss and take-profit points to execute automatically and don't change them unless it’s absolutely necessary. Make your decisions and stick with them. 3) Stay with the trend; if you go against it, make sure you have a very good reason. Movements in the FOREX market tend to be in trends more than anything else; you therefore have a higher chance of success in trading with the trend.