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Forex Currency Trading - The Basics

Forex is the name given to the foreign exchange market, where international currencies are bought and sold. Due to the development of free exchange rates, the market began in the 1970s and has become the world's largest financial market with a daily turnover of US$1.9 trillion. To put that into perspective, that's over thirty times the daily turnover of the rest of the US equity markets combined.

Unlike normal stock markets which are traded on exchanges that are located in a specific place, Forex currency exchange takes place via an Over The Counter (OTC) or interbank market. This means that transactions are conducted electronically between brokers.

Thanks to this and global time zones, Forex is a genuine 24 hour financial market. The day begins in Australia and moves around the globe as each of the leading financial markets open in Tokyo, London and New York. So it's always possible to find someone who is willing to buy or sell international currencies. This gives investors the chance to respond to price changes caused by a variety of economic, social and political events at any time of the day or night.

There are two main reasons for trading currency on Forex. Approximately 5% of Forex trades are undertaken by multinational companies and governments who buy or sell products and services in a foreign country and have to convert their profits into their domestic currency. Forex allows them to hedge (or protect) their profits so that in the even of a dramatic currency fluctuation, their profits won't be reduced.

However, the other 95% of Forex activity is due to people or organizations trading for short term profit. Forex allows you to trade virtually any currency, although in practice most activity (85% of total turnover) relates to the major currencies which include the US Dollar, the Euro, the Japanese Yen, the Swiss Franc, the British Pound, the Australian Dollar and the Canadian Dollar.

Trading on the Forex exchange involves simultaneously buying one currency and selling another. For example, if you buy USD/EUR, that means you buy the US Dollar and sell an equivalent value of the Euro. Closing you position involves buying the Euro and selling the US Dollar.

The price of all currencies traded on Forex are influenced by the laws of supply and demand. If the demand for a currency outstrips the supply, the price rises. Alternatively, if supply is greater than demand, the price of a currency will fall.

Forex trading has a number of significant advantages that make it an extremely attractive form of speculation.

First, due to its size and lack of exchange controls, it's almost impossible for any person or organization (including central banks and governments) to significantly influence prices for an extended period of time. This means that you can enter the market secure in the knowledge that your investment is competing on a level playing field with every other investor around the world.

Second, due to the vast size of the market, the liquidity is excellent. So unlike the position with many stocks and shares where you might find it hard to sell certain investments, you can open and close Forex trades almost instantly as there are always scores of international buyers and sellers.

Third, it's relatively easy and cheap to get started trading Forex. All you need is an internet connection, a broker and perhaps $500 - $1000 to open a trading account. Once you've got these things you can trade 24 hours a day from Sunday afternoon through to Friday evening. And thanks to the availability of information on the internet it's possible to find all the data that you need for the purposes of analysis and decision making.

Fourth, it's possible to make substantial short term gains with relatively little capital thanks to the number of daily fluctuations in currency prices and the ability to leverage your capital (often up to 100 times) thanks to margin trading.

However, due to rapid fluctuation of currency prices and marginal trading, Forex trading carries significant risks, so caution must be required when deciding which trades to make.

When it comes to decision making, there are two basic Forex trading strategies, technical analysis and fundamental analysis.

Technical analysis relys upon using price charts, trend lines, support/resistance levels, highest price, lowest price, transaction volumes and various other mathematical formulae to identify trading opportunities. This is based upon the belief that everything that may influence the price of a currency has been considered by the market and factored into the current price.

Crucially, technical analysts don't try to defeat the market. The are content to predict short term, minor fluctuations using patterns from the recent past and the belief that history will repeat itself. The main disadvantage of the method is that all the results are purely historic and cannot always be relied upon as an accurate guide to the future.

Fundamental analysis looks at wider factors such as the national economy of the currency, the political stability, employment figures, industry figures, interest rates, tax policy and a wide range of other economic indicators. However, before basing your investment decisions on these factors alone, it's important to consider both technical analysis and the fact that market expectations can influence the price of a currency as much as reality.

About the Author:

Visit Michael Mancini's website at ForexCurrencyTradingGuide.com for everything you need to know about Forex Trading.

Another article on forex foreign exchange rates

How to Trade in Forex - and Make a Killing

Biggest market on planet earth, Forex is short for Foreign Exchange, sometimes simply called FX. In excess of two trillion dollars is traded in Forex every single day. Forex is the most liquid and largest market in the world. Formerly cornered by the major banking institutions, large speculators, and major foreign-currency dealers, it is now open to most (even small) investors.

A small amount of capital can now leverage very large positions on the Foreign Exchange market. For instance, with 100:1 leverage, just making a $1000 investment can leverage $100,000. There is enormous potential gain with this kind of leverage, when you have learned How to Trade in Forex.

Where does this Forex trading take place? Thousands of locations all over the world, at currrency exchanges, on telephones, and computer terminals. Forex trading can be done right on your personal PC. There is risk involved, as with any business venture. But your losses can be way minimized. And the profits or gains can be absolutely staggering.

As opposed to futures, stocks, and commodities, Forex is a Foreign Exchange of 5 major currencies, the U.S. Dollar, Brittish Pound, Swiss Franc, the Japanese Yen, and also Eurocurrency. In a nutshell, you're basically buying one currency in anticipation or indication(s) that it will gain in value compared to another currency.

The volatility of the huge Forex markets is influenced largely by the vloatility throughout the world. Politcal instability, the rise and fall of governments, natural disasters, and changes in international trade are just some factors in fluctuations of the Foreign Exchange. Fluctuations that result in enormous, usually fast profits for traders.

So, how does one learn How to Trade in Forex? There's no better teacher than a seasoned veteran. There are many of these on the internet with various programs, methods and techniques. Trading Forex isn't "rocket science", though many marketers make it sound that way. It can be very simple. Keep it that way and watch for a few key things.

Important Forex Trading Tips and Recommendations

* Learn from a trader who's traded for many years, is currently trading, and specializes in teaching others Forex Trading. Someone with a positive track record, with few - or no losing days. Someone that makes a living trading.

* Learn PDFT - Price Driven Forex Trading. With PDFT you don't trade on emotion, you use only the price of a currency pair and a time element. This might sound crazy until you learn why - but you'll use absolutely no disgression, interpretation, or judgement. These are areas that leave the trading door open to failure. What is the best way to trade?

Mechanical Trading

* 100% mechanical trading, a "trading machine". You don't use any of the trading tools, indicators, pivots, trend lines, etc. Just the price of the currency pair you are trading and a time element. Many new traders become disillusioned when trading is made so over complicated. It doesn't need to be, trading is more profitable if kept simple, mechanical.

* Trading time. Once you know How to Trade in Forex, strategies can be executed in as little as one minute, some can be completed in just ten seconds! Using special Forex software like forex runner, forex flip & go, and forex trading machine, you'll make "hit and run" trades. 100% objectively you'll identify a trade, enter a buy or sale order, enter a stop loss order and a profit-objective order. If the market goes up or down with Forex, you can make money. No charts, no tools. A currency pair & a time element. That's it!

* Professional traders make incredible profits with large swings in the Foreign Exchange Market. They've also developed incredibly fast, efficient mechanical tools for the average person to do the same, and very quickly. All anyone needs to be successful in Forex Trading is a Complete Trading Solution.

(You are welcome to use my articles. Please leave all links active, and the author bio box intact in your website or article. Thank you)

About the Author

There simply is no faster legal way on earth to make a solid fortune, than quickly learning How to Trade in Forex. Using no emotional trading, no discretion, interpretation, or judgement. 100% mechanical, anyone can learn really fast How to Trade in Forex.

How Indicators and Patterns Point the Way to Forex Profits

If you have done even beginning research into trading, technical indicators and charting will become part of your vocabulary. Technical analysis uses price and volume information to try to predict where prices will go in the future.

A huge number of indicators have been developed to help traders, and many are very complex mathematically, but all of them are essentially a computation using the price and volume data. The goal is to learn to use some of these technical indicators in a system to guide you in your entry and exit decisions in the market. Without a system, your odds of success are practically zero as most traders will let fear and greed control their decisions, which is a recipe for failure. Combining the right group of technical indicators, with discipline and adequate trading capital, has been the road to fortune for many traders. If you are going to use primarily technical analysis, you need to find a system that you are comfortable with. Good software programs will include some indicators and systems to get you started. The art is creating a trading model with technical indicators and money management principles that reflects your personality and trading philosophy.

With trading you want to spot the patterns with the best chance of success, and trade them for profit. There are many different methods and tools utilized in technical analysis, but they all rely on the same principles - that price patterns and price trends exist in the market and that they can be identified and turned into profit opportunities.

Traders rely on the historical fact that certain chart patterns are consistent, reliable and repeat themselves. It is these patterns which are the core of Technical Analysis. However, the question of whether or not these patterns on charts can always accurately predict future price movements of a stock is (and probably always will be) up for debate between Fundamental and Technical Analysts.

Data on the FOREX market has been collected for the last 100 years, over that time certain patterns have become emergent. These can form the basis of important patterns that can help predict the future market direction. The first assumption is that all securities have the tendency to form patterns in their fluctuations, which is fine, and is often the case, but the market is volatile and often unstable.

These patterns are easily discernable to the chart technician. The fact that history repeats are evident by the patterns on the chart that repeat time and time again. The same can be said for price patterns and indicator readings; no two are ever exactly the same but they are similar enough that they can be classified and you can draw a prediction as to where prices are likely to move on completion.

With some study of indicators, systems and patterns you will find a trading method that works for you and that will keep your emotions to a minimum and hopefully your profits to a maximum.

About the Author

eWebMedia researches and publishes helpful articles on a number of popular topics. For more on trading, check out the trading site at Forex Trading

Forex Trading Basics

What exactly is Forex Trading? When you exchange one country?s currency at the same time with another country?s it is known as foreign exchange, Forex or FX trading.

Most people are aware that when they travel from one country to another it becomes necessary to conduct trade in the currency of the country being visited. Knowing the value of various currencies at particular times can also be a great business venture because you can profit by trading one currency for another.

For example, if you buy the US dollar when it is rising in value against the Japanese yen, you can later sell it before its value begins to drop and make a tidy profit. Taking advantage of these timely dips and swells of the currencies on foreign currency market, you can make much money. Similarly, Forex traders who pay strict attention to a changing international currency market have the potential to earn big profits.

Buy Low Sell High
Forex traders deal with often complicated currency exchanges, however, successful Forex traders buy currencies when they are low in value and sell them at their peak. Although on the surface this sounds like just plain old common sense, in fact currency exchanges can rise and fall wildly within a few minutes. Holding on to a currency too long can result in a loss of value if the market for the particular currency begins to fall. So, timely and decisive responses are essential in securing a profit on every transaction.

Economic and Political Conditions
Currency values fluctuate because of events happening in the economic and political arenas of different countries. For example, a country that goes to war may see it currency drop in value, whereas, a country that reports robust economic growth, may also have a strong currency. Similar to the stock market, currency trading requires skill, luck and risk management. Successful Forex traders know when to hold a losing trade and when to get out. You cannot make money in this market if you are constantly worried about losing your initial investment. Sometimes you have to let a bad trade go and start over.

About the Author:

Get the latest in forex trading know how from the only true source at http://www.forextradingline.com . Check out our forex trading pages.

Online Currency Trading: Three Ways To Profit With Forex Trading

Online currency trading is an excellent way to make good money online. Suddenly what was once barriers is now a chance to become wealthy. And here is a business opportunity like never before. These three ways to profit with Forex trading will have you thinking.

1.Develop a better trading system ? each system can help make more profits. This is even more so when it is not connected to another system. Do ongoing research so that you find a new system that can make better projects. Sometimes a trading system will just stop working for whatever reason. You need to keep on top of this and dump out what ever isn?t working.

2.Add more traders ? each of your traders can only do so much work well. The trader will reach a point where there effectiveness is no longer of value. Let?s say your best trader trades 75 million dollars effectively but when he goes above that total he is no longer effective. The best thing to do is to add more traders. That is if you want to grow your business bigger.

You can also optimize the traders that you have making them more effective at what they are doing for your trading business. Coaching is a great way to help them improve and sometimes a bonus incentive program will be very beneficial.

3.Optimize your position by meeting all of the objectives that you have set out. You must start by clearly drawing out what those objectives are for the business. Too often this step is missed and it is quickly reflected on the profit margin.

You also need to determine your R value on the distribution of each system. You need to know this in order to make the right changes. You must also simulate different algorithms so that you can decide from the many thousands of possibilities that will best meet your obligations. Finally you have to apply that algorithm that you choose to your system.

Don?t expect to be able to pull off all three ways to profit with Forex trading at the same time. Sure it would be great if you can but don?t be too disappointed if you are unable to do so. After all it is all about the bottom line and you will want to get more efficient while at the same time not jeopardizing your income flow.

Copyright ? 2007 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author's information with live links only.)

About the Author:

Joel Teo is the owner/webmaster of http://www.GlobalProsperity.info/ the free financial article directory.

swiss broker forex Facts

Should You Invest In The Forex Market Or In Stocks?

Stocks, or shares as they are more commonly called in the United Kingdom, have been the backbone of many investments for hundreds of years and often form the underlying investment in many traditional forms of savings plan, such as life insurance policies set up not only to provide life cover but also to produce a return on maturity.

Companies typically issue stock when they wish to raise capital and purchase of this stock represents a partial ownership in the company. In return many companies will often issue a share of their profits to stockholders in the form of an annual, or sometimes biannual, dividend payment. In addition, if the company does well the value of its stock will increase and stockholders may then profit from the sale of their stock.

Stocks are traded on a number of stock exchanges through brokers including the London Stock Exchange (LSE), the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation System (NASDAQ). There are also a number of other major stock exchanges around the world. In most cases stocks will be listed with one particular exchange, but larger international companies may well list their stock on several different exchanges.

Traditionally stocks have been seen as long-term investments and purchasers have normally been looking at buying stock to hold for periods of five years or more. Many stocks, often referred to as "blue chip" stocks, are issued by companies with long and proven track records and traditionally form the core of many investment portfolios.

Short-term trading in stocks is a relatively new phenomenon and has been made possible to a large extent with the arrival of Internet trading. Here day traders try to take advantage of often large daily movements in the market by buying and selling many times in a single trading period. This is however a fairly risky business and any profits made can quickly be reduced by broker commissions which are charged on every transaction.

The Forex, or foreign exchange, market is quite different from the stock exchange. The Forex market is principally a short-term market with most traders entering and exiting deals within a single day and, sometimes, within as little as a few minutes. Forex trades are also "commission free" which means that a large number of trades can be made without running up a large brokerage bill. In the Forex market brokers earn their money by setting a spread in the price for buying and selling, known as the asking and selling prices.

The Forex handles transactions worth $1.9 trillion every day is the largest financial market in the world. To really appreciate the size of this market you have only to compare it to all of the American stock exchanges which, combined, handle daily transactions worth about $100 billion. The huge volume Forex trading also means that it is one of the most liquid markets in the world and that there is almost always a buyer and seller for any currency as the world economy is based very largely on the movement of goods from one country to another. The stock market by contrast is far less liquid and many stockholders choose to hold their investments for considerable periods of time.

Unlike the stock markets, The Forex market has no central location and trading markets are located throughout the world. Also, because of differences in time as we move across time-zones, trades can be made 24 hours a day, 5 days a week. Trading begins in Sydney, Australia on Monday morning (Sunday afternoon New York time) and continues non-stop until Friday afternoon New York time.

Stock exchanges offer far more limited trading hours and, while it is theoretically possible to trade on stock markets in Japan while the American markets are closed, many stocks are only listed on specific exchanges and cannot be traded elsewhere. Most stock exchanges are open from Monday through Friday, typically for a period of seven hours each day.

The Forex market tends to be more predictable than stock markets and often follows fairly well established trends. It also allows traders to take advantage of leverage which is typically as high as 100 to 1 (against 2 to 1 found on most stock markets) which means that investors can participate in Forex trading with a minimal investment. Indeed many brokerages today offer mini Forex account which can be opened with as little as $250.

For more information about mini forex online trading accounts or to learn forex trading online please visit ForexOnlineTradingSystem.info

Forex Trading: Good Opportunity Or Scam?

Until recently, the forex market or foregn currency exchange market wasn't for the average trader or individual speculator. With the large minimum transaction sizes and often-stringent financial requirements, banks, hedge funds, major currency dealers and the occasional high net-worth individual speculator were the principal participants. These large traders were able to take advantage of the many benefits offered by the forex market vs. other markets, including the fantastic liquidity and strong trending nature of the world's primary currency exchange rates.

Fortunately, thanks to new legislation written in the late 1990?s, forex brokerages have opened up to the general public and offer trading opportunities for anyone who has an interest in trading currencies for profit. In fact, many brokers allow traders to open and trade currency with as little as $250 dollars in an account.

Regrettably, all of these new currency trading opportunities have created a lot of hype around the forex. Some of this hype includes magic trading formulas, ?easy? indicators and expert trend predictors. There are now countless currency brokerages enticing potential traders to open accounts and start trading today. Many people have started to get the feeling that trading currency is more of a scam then anything else. We strongly disagree with this notion and are certain that the forex market has much to offer investors. However, before your take you paycheck and head down to the nearest brokerage to open your forex account, may we make some important suggestions before you enter the currency market?

First, there are thousands of websites with information, terminology, trading strategies and more. We recommend researching several of them as you begin to explore the basics of what the forex is. Brokers often will offer information about the forex, but realize that they are also trying to get you to open an account. Aside from brokerage sites, there are several informational sites and a few forex education companies on the market that offer good information without the pressure of signing up for a ?live? trading account.

Second, read some books. Most of the professional forex traders operate using a combination of Japanese candlestick charts and other complex indicators to determine the direction of a particular currency pair. Find books about technical analysis trading, candlestick charts and other methodological indicators. Remember that when you are buying currency it is like buying a stock in a nation or country. Learn about different countries economic announcements, interest reports, and job indicators. These are highly relevant factors that help indicate a currencies direction.

At this point, it may be time for you to open a demo account with the broker of your choice. This will help you get familiar with trading platforms and basic charts. Practice making some ?demo trades?. Even after doing some basic homework you will find that you fell like you areflying by the seat of your pants? during your trades. At this humbling point in your new forex trading career you realize its time to take a forex training course.

There are many forex training courses on the market today. They come in many forms including seminars, home study courses, interactive online courses, and class room education. Fxcenter.com, one such forex training course has found that the best education courses use all of these methods in their training regime. They feel that a program should include a minimum of 20 hours of home study to teach the basic principles of forex trading. Next a student would need to observe the market in action, without necessarily making trades. To do this, an interactive online class is necessary to help you tie in all the information and begin to apply it to live market conditions. Onsite classes then further reiterate the fundamentals of trading forex and help the student discover a trading strategy that fits his or her personality, financial status and risk tolerance. Finally, working with a highly skilled forex mentor, again during live market sessions, is critical to help the student understand the psychological part of trading. These mentors would also help students create an advanced trading system and analyze the market minute by minute.

Most successful traders have spent years developing good trading habits and learning the hard way how to take advantage of currency volatility. We strongly recommend you follow these steps as you begin to investigate investment opportunities in the forex market.

About the Author:

For more information on forex training and how you can get ahead into todays market please visit our site. Get some forex education and take your skills to the next level!

What Is Online FOREX Currency Trading?

For the past 10 years, currency trading has grown dramatically. This has resulted in many companies setting up online currency trading operations. Forex, also known as the "Foreign Exchange" is used by all these companies. They offer all their customers a secure and safe place to conduct online currency trades.

When you wish to trade in the Forex market, you will have numerous companies to select from. All of them will supply you with various resources and tools. Almost all of them will provide you with real time market prices. They receive this information from the multi-sources inter-bank prices feed of the Forex. As a result, you will be able to make better trading decisions from the timely and accurate information. Unlike other markets, you will not find any re-quotes or time-delays which are frequently apparent in other markets. With these timely information on market prices, you can then use the Internet to trade directly.

Your trades are executed almost immediately when you participate in the Forex online currency trading. In fact, the currency trades are done in a fraction of a second on average. The transactions are executed at a very high speed.

When you are buying or selling in the Forex market, you?ll have 15 unique currencies available for you to trade in. This will provide you with many different options which you can subsequently formulate for many different potential strategies. Since the Forex is accessible to the public since 1995, we are looking at a relatively young market. But as it ages, it is very probable that the number of available currencies will continue to grow. With the available options expanding, you can also expect the number of people trading in this market to expand making it easier for you to execute a trade.

You should make sure that you are well equipped if you want to trade in Forex. It is important to deal with companies that will provide you with the right tools and resources. You should find Forex companies with the ability to provide you with timely news and the latest updates on the currency situation so that you will be properly informed and be aware of what is happening currently. You must research adequately into what online currency trading is all about especially if you are new to online currency trading. Once you are equipped with the right knowledge, you can then enter into the world of online currency trading with confidence, knowing that the Forex market is your number one option to earning a good profit on your investment.

Need more information? Please visit my Forex Trading Guide for more articles.

"How to Trade in Forex"

Biggest market on planet earth, Forex is short for Foreign Exchange, sometimes simply called FX. In excess of two trillion dollars is traded in Forex every single day. Forex is the most liquid and largest market in the world. Formerly cornered by the major banking institutions, large speculators, and major foreign-currency dealers, it is now open to most (even small) investors.

A small amount of capital can now leverage very large positions on the Foreign Exchange market. For instance, with 100:1 leverage, just making a $1000 investment can leverage $100,000. There is enormous potential gain with this kind of leverage, when you have learned "How to Trade in Forex".

Where does this Forex trading take place? Thousands of locations all over the world, at currrency exchanges, on telephones, and computer terminals. Forex trading can be done right on your personal PC. There is risk involved, as with any business venture. But your losses can be way minimized. And the profits or gains can be absolutely staggering.

As opposed to futures, stocks, and commodities, Forex is a Foreign Exchange of 5 major currencies, the U.S. Dollar, Brittish Pound, Swiss Franc, the Japanese Yen, and also Eurocurrency. In a nutshell, you're basically buying one currency in anticipation or indication(s) that it will gain in value compared to another currency.

The volatility of the huge Forex markets is influenced largely by the vloatility throughout the world. Politcal instability, the rise and fall of governments, natural disasters, and changes in international trade are just some factors in fluctuations of the Foreign Exchange. Fluctuations that result in enormous, usually fast profits for traders.

So, how does one learn "How to Trade in Forex"? There's no better teacher than a seasoned veteran. There are many of these on the internet with various programs, methods and techniques. Trading Forex isn't "rocket science", though many marketers make it sound that way. It can be very simple. Keep it that way and watch for a few key things.

Important Forex Trading Tips and Recommendations

* Learn from a trader who's traded for many years, is currently trading, and specializes in teaching others Forex Trading. Someone with a positive track record, with few - or no losing days. Someone that makes a living trading.

* Learn PDFT - Price Driven Forex Trading. With PDFT you don't trade on emotion, you use only the price of a currency pair and a time element. This might sound crazy until you learn why - but you'll use absolutely no disgression, interpretation, or judgement. These are areas that leave the trading door open to failure. What is the best way to trade?

Mechanical Trading

* 100% mechanical trading, a "trading machine". You don't use any of the trading tools, indicators, pivots, trend lines, etc. Just the price of the currency pair you are trading and a time element. Many new traders become disillusioned when trading is made so over complicated. It doesn't need to be, trading is more profitable if kept simple, mechanical.

* Trading time. Once you know "How to Trade in Forex", strategies can be executed in as little as one minute, some can be completed in just ten seconds! Using special Forex software like forex runner, forex flip & go, and forex trading machine, you'll make "hit and run" trades. 100% objectively you'll identify a trade, enter a buy or sale order, enter a stop loss order and a profit-objective order. If the market goes up or down with Forex, you can make money. No charts, no tools. A currency pair & a time element. That's it!

* Professional traders make incredible profits with large swings in the Foreign Exchange Market. They've also developed incredibly fast, efficient mechanical tools for the average person to do the same, and very quickly. All anyone needs to be successful in Forex Trading is a "Complete Trading Solution".

(You are welcome to use my articles. Please leave all links active, and the author bio box intact in your website or article. Thank you)

About the Author

There simply is no faster legal way on earth to make a solid fortune, than quickly learning "How to Trade in Forex". Using no emotional trading, no discretion, interpretation, or judgement. 100% mechanical, anyone can learn really fast "How to Trade in Forex"