Smart Trading

Ok, so continuing with this set of articles I am posting here a very important piece of information, which I think is key when considering Forex, I am still trading in the practice mode, so far I managed to make like 2,000 dollars, but I also took a beating when the dollar went down, lost aprox. 700, so you can say I have made 1300 dollars so far. I have read a lot and so far I still don´t feel all that confident to do it with real money, as you know I am not a professional, rather I looking to learn and start making some extra income... so with no more things to say for now, here is part 3 of this series of articles, I mention once more that I didn´t right this I am only sharing it with you guys, enjoy!

P.S. If you think the information is repetitive and the same from other articles trust me, It wont hurt you to keep reading and reading and reading... always read, learn and be prepared.

"Hundreds of thousands of individuals have already joined the FOREX market. If you are interested in a way to invest your money with quicker returns, FOREX may be perfect for you. But before you can begin earning money, you should thoroughly understand the FOREX market.

Investing Methods

To better understand the FOREX market, you can compare this investing method to trading stocks. In the stock market, you can buy shares of many different corporations in the hope that stocks will rise, earning you a profit.

Well, the FOREX market works in the same way, except you are not buying shares of a corporation. Rather, you are buying and selling currencies. The aim is the buy a currency and sell it when the currency rises, thus earning a profit when the currency is more valuable.

As with the stock market, the FOREX market consists of those who invest a small amount as well as those with millions to invest. Any individuals with any capital can join in on the action. Because of the wide variety of FOREX brokers available today, you can become a FOREX trader with as little as two or three hundred dollars.

Predicting Results

But like the stock market, the FOREX market is full of risks. When you are investing any money there is always a risk of some loss. To minimize loss, many FOREX traders thoroughly educate themselves through classes, online courses, books, and other materials. There are many kinds of trading methods that will help you analyze current conditions and enable you to predict results.

The FOREX market is constantly changing, with drops and rises in currencies, 24 hours a day. The trick is to predict these trends before they occur, so you can buy currencies low and sell them when it is higher than the original cost. Sometimes, this means buying a dropping currency, and waiting for that currency to take on an upward trend. This forces you to keep up to date on the FOREX market conditions.

Online Trading

To become a FOREX participant, you should at least read a book, if not take a course. Because real money is involved here, you must proceed with utmost caution. Many FOREX investors sign up with FOREX related websites to receive newsletters, advice, and to keep up with currency trends. Some investors even sign up to receive trends on their phones and PDA's to stay in the game.

The good news is that you have the opportunity to practice with play money before you put any of your hard-earned cash through the FOREX market. When you sign up with a brokerage firm that offers the option to trade online, you can use play money to test and understand the software. You can use this valuable opportunity to put your research to the test by trying out different trading methods to see if your predictions and analyses are correct. While the money may not be real, the conditions are, which allow you a stable playground to learn and adapt to the FOREX market.

Stay informed to stay on top of your game; your FOREX profits count on it. By remaining vigilant, you'll be able to pull in great profits through the FOREX market."

Trading in the Forex Market P.2

This is part 2 of the Forex market, please keep in mind that I did not write this article, I am sharing it with you so that you can benefit from it. I am still in the practice mode of my Forex account and so far all the reading I have made has been a good tool, always be careful and do not do any trading with real money until you have a strong knowledge of the market.

"

 “How To”  Start Trading The Forex Market? ( Part 2)

Why is FOREX trading so popular?

Because you can trade from anywhere. From your kitchen table, bedroom, garage or from the nearest Starbucks coffeehouse ( most of them have wireless Internet connection).If you have or like to travel, take your laptop with you and you can trade the FOREX anywhere in the world where you have an Internet connection.

When you want to start trading the Forex Market nobody is asking you for a diploma, a formal license or a proof of how many hours you have spent studying the Foreign Exchange Market and/or Banking Industry.

FOREX Trading is Economical and Start-up Costs are Low!

You can open an account to trade Forex with as little as US$ 200 at he most brokerage firms.

I personally do recommend  Fenix Capital Management, LLC, which offers  a state of art Trading platform, that allows you to place orders directly by clicking  on the chart.

The Main Benefits of Trading the FX Spot Market are:

YOU don't pay commissions or fees!

YOU can trade 24-hours a day !

YOU can trade up to 400:1 Leverage !

YOU can have FREE Streaming executable Price quotes and live charts!

It is important to know the differences between cash FOREX (SPOT FX) and currency futures.

In currency futures, the contract size is predetermined.

With FOREX (SPOT FX), you may trade electronically any desired amount, up to $10 Million USD.

The futures market closes at the end of the business day (similar to the stock market).If important data is released overseas while the U.S. futures markets is closed, the next day's opening might sustain large gaps with potential for large losses if thedirection of the move is against your position.

The Spot FOREX market runs continuously on a 24-hour basis from 7:00 am New Zealand time Monday morning to 5:00 pm New York Time Friday evening.

Dealers in every major FX trading center (Sydney, Tokyo, Hong Kong/Singapore, London, Geneva and New York/Toronto) ensure a smooth transaction as liquidity migrates from one time zone to the next.

Furthermore, currency futures trade in non-USD denominated currency amounts only, whereas in spot FOREX, an investor can trade in almost any currency denomination, or in the more conventionally quoted USD amounts.

The currency futures pit, even during Regular IMM (International Money Market) hours suffers from sporadic lulls in liquidity and constant price gaps.

The spot FOREX market offers constant liquidity and market depth much more consistently than Futures.

With IMM futures one is limited in the currency pairs he can trade. Most currency futures are traded only versus the USD.

With spot FOREX, you may trade foreign currencies vs. USD or vs. each other on a 'cross' basis, for example: EUR/JPY, GBP/JPY, CHF/JPY, EUR/GBP and AUD/NZD

More and more well informed investor and entrepreneurs are diversifying their traditional investments like stocks, bonds & commodities with foreign currency because of the following reasons: (will be continued)

RISK WARNING:

Risks of currency trading: Margined currency trading is an extremely risky form of investment and is only suitable for individuals and institutions capable of handling the potential losses it entails. An account with an broker allows you to trade foreign currencies on a highly leveraged basis (up to about 400 times your account equity). The funds in an account that is trading at maximum leverage may be completely lost if the position(s) held in the account experiences even a one percent swing in value, given the possibility of losing one's entire investment. Speculation in the foreign exchange market should only be conducted with risk capital funds that, if lost, will not significantly affect the investors financial well-being."

The Forex Market Part 1

"The Forex Market is very different than trading currencies on the futures market, and a lot easier, than trading stocks or commodities.

Whether you are aware of it or not, you already play a role in the Forex market. The simple fact that you have money in your pocket makes you an investor in currency, particularly in the US Dollar. By holding US Dollars, you have elected not to hold the currencies of other nations. Your purchases of stocks, bonds or other investments, along with money deposited in your bank account, represent investments that rely heavily on the integrity of the value of their denominated currency ¨the US Dollar. Due to the changing value of the US Dollar and the resulting fluctuations in exchange rates, your investments may change in value, affecting your overall financial status. With this in mind, it should be no surprise that many investors have taken advantage of the fluctuation in Exchange Rates, using the volatility of the Foreign Exchange market as a way to increase their capital.

Example: suppose you had $1000 and bought Euros when the exchange rate was 1.50 Euros to the dollar. You would then have 1500 Euros. If the value of Euros against the US dollar increased then you would sell (exchange) your Euros for dollars and have more dollars than you started with.

Example:

You might see the following:

EUR/USD last trade 1.5000 means

One Euro is worth $1.50 US dollars.

The first currency (in this example, the EURO) is referred to as the base currency and the second (/USD) as the counter or quote currency.

The FOREX plays a vital role in the world economy and there will always be a tremendous need for the exchange of currencies. International trade increases as technology and communication increases. As long as there is international trade, there will be a FOREX market. The FX market has to exist so a country like Germany can sell products in the United States and be able to receive Euros in exchange for US Dollar.

RISK WARNING:

Risks of currency trading

Margined currency trading is an extremely risky form of investment and is only suitable for individuals and institutions capable of handling the potential losses it entails. An account with an broker allows you to trade foreign currencies on a highly leveraged basis (up to about 400 times your account equity).The funds in an account that is trading at maximum leverage may be completely lost if the position(s) held in the account experiences even a one percent swing in value. Given the possibility of losing one's entire investment, speculation in the foreign exchange market should only be conducted with risk capital funds that, if lost, will not significantly affect the investors financial well-being."

FOREX - FAQ

"What is FOREX?

FOREX stands for the FOReign EXchange market, which is an international financial market where currencies are traded. The foreign exchange market began in the 1970s and is now the largest financial market in the world, with an average daily turnover of US$1.9 trillion. That's thirty times the amount of daily activity on all of the US stock exchanges.

Each Forex trade involves simultaneously buying one currency and selling another. For example, if you think that the Euro will rise relative to the dollar, you would place a Euro/Dollar trade. The forex system would then buy the Euro and sell an equivalent amount of the Dollar. Then, when you want to close your position, you would place a Dollar/Euro trade. This would buy the Dollar and sell the Euro. If the Euro had risen against the Dollar, you would make a profit, but if it had fallen relative to the Dollar you would make a loss.

What currencies are traded?

Most of the world's currencies are available to trade, but the majority of market action involves a group of major currencies, including the US Dollar, the Euro, the Yen, the Swiss Franc and Sterling.

Where is the Forex market located?

Unlike most financial markets around the world, Forex is not centralized on an exchange. Instead it operates on a basis known as the interbank market or Over the Counter (OTC). As each Forex trade involves two reciprocal trades (buy one currency and sell another), these are conducted electronically with any broker who is willing to accept the trade.

Who can trade in the Forex market?

Traditionally, access to currency trading was restricted to banking organisations, including central banks, commercial banks and investment banks. That's the reason it operates on a system known as the interbank market.

However, the number of non bank participants in the Forex market, which includes multinational companies, money managers, money brokers and private speculators, is growing rapidly. And thanks to the relatively small amount of capital required to open a trading account (often $500) Forex is opening up to more and more people all the time. If you're over 18, have internet access the enough money to open a trading account, the world of Forex is open to you.

When is the Forex market open for trading?

As Forex doesn't exist within a traditional exchange, it's the only 24 hour financial market in the world. Forex trading begins every day in Sydney and then moves around the globe as the major international financial markets in Tokyo, London and New York open.

In other words, there are always traders somewhere in the world who are actively trading foreign currencies. This means you can make trades and respond to major social, economic and political events day or night. However, there is a short rest period from close of trading on the American financial market on Friday until trading begins in Australia on Monday morning. However, due to the time differences around the globe, this period only lasts for approximately 48 hours.

What is a trading margin?

Forex trades are made in lots of $100,000. If you had to provide that amount of money to cover your position before you could trade, the market would once again be restricted to banks and other institutional investors. So brokers have established the principle of margin trading. In effect they allow people to trade $100,000 blocks of currency if they can provide an element of security against potential losses.

For example, they may allow people to trade on a margin of 1% (in comparison, traditional stock brokers often require a 50% margin). This means that they can trade $100,000 blocks, provided their account contains at least $100,000 x 1% = $1000. One thousand dollars will protect the broker against any potential losses that their client makes (currency values rarely fluctuate by more than 1% in a single day). If a client's account is reduced by losses (i.e. reducing the broker's security below acceptable levels), the broker will close all trades and require an additional deposit before further trades can be made.

Trading margin allows people to control vast amounts of currency wiith relatively small amounts of capital (often 50, 100 or even 200 times the amount of capital that they have invested). This can lead to massive gains, but increases the risk of losing most or all of your investment capital.

How much does it cost?

Thanks to the trading margin offered by most Forex brokers, it's possible to open an account and get started trading with a relatively small amount of capital.

Forex trades are made in lots of $100,000. However, most Forexs brokes will provide you with a leverage ratio of up to 100:1, which means that you have the ability to control a $100,000 trade with as little as $1000 in your account. Some brokers will provide leverage of 200:1 or even 400:1, which allows you to start with as little as $500 or $250 in your account.

However, please remember that although greater leverage allows you to maximize your profit potential, it also increases the risk factor. The higher the leverage ratio, the smaller trading fluctuation that will be required to wipe out your trading capital. So choose the amount of leverage that you use wisely.
For new traders, it may be safer to begin with leverage of 20:1 or 50:1. This will increase the amount that you need to open an account, but it will reduce the risk of seeing all your trading capital disappear due to a small shift in the value of a currency."

Future Trading

A friend of mine shared this article with me, I don´t know who the author is and the website at the end is no longer up but I believe its really good information so I share it with you...

"The following article includes pertinent information that may cause you to reconsider what you thought you understood. The most important thing is to study with an open mind and be willing to revise your understanding if necessary.

How a strategic money management plan works is discipline, not magic. In the market place it’s possible to be right, and to still lose money. In fact, it’s pretty common. Traders who win on a high percentage of their trades often end up with their capital eroded away, and left with nothing to show for their work. They lose their gains because they don’t know how to manage their money.

Being a good manager of your own money is one of the most difficult of skills to learn. But if you do not use good money management to bank profits, learn to take small losses when you are wrong and control your use of margin, you will lose it all. No matter how good of a trader you think you are, your first priority needs to be protecting your capital if you want to be successful.

As a trader, your capital is the most valuable asset you have. It is your only asset in the eyes of the market. Without it, you can’t work at all. For this reason, bringing in no profits on a trade is better than losing any part of your margined account. If your account is intact, you are alive and live to trade another day. If your capital has suffered a loss your efforts for making gains will wasted playing catch-up. The more you’ve lost, the longer it will take to get back to where you started from, because now you have a smaller pile of capital to work from. A smaller capital base means smaller percentage returns on profits. Making 10% on a $5,000 account earns you $500, but if you’ve lost half of that account and have only $2,500 left, making 10% on your money will earn you only $250. You’d have to do that twice to make the same $500.

Sound money management has two main goals: to avoid losing money, and to avoid missing profit opportunities. The first goal is straightforward. You want to preserve your money and whatever profits you’ve accumulated. But you don’t just want to keep your capital and let it go stagnant. You want to trade with it, to continue to grow it and make your returns larger and larger. Not keeping your money tied up in bad or problem trades for long periods of time will allow you to not miss new profit opportunities when they come along. Failing to avoid either of these will cost you.

It's really a good idea to probe a little deeper into the subject of Futures. What you learn may give you the confidence you need to venture into new areas. Working to avoid losing those profit making opportunities isn’t quite as obvious a goal. With the second goal in mind let’s compare the outcomes of two money-management decisions. Trader X buys a futures position, expecting it to go up, and finds that it doesn’t. However, he’s certain it will go up eventually, and he’s incurred a small loss, so he decides to wait it out. He ends up holding the position for two months before finally selling it. Trader Y buys the same futures at the same time as Trader X, but once he sees that it isn’t going up, he sells it at a small loss. He buys another futures position and makes a 10% profit on it. His next trade loses 2%, but after that he makes 7 %, and then loses 1%, and then gains 25% on a series of trades. Because the account is growing and he makes gains on an ever larger base of capital each time, at the end of two months, his account has grown quite handsomely, even though Trader Y was WRONG 50% of the time.

Which money management decision turned out to be the best? While Trader Y made a nice profit, Trader X not only lost time but also never made his money back. Even if he had made his money back on that position, it’s hard to see how this was a good use of his operating funds over the course of two months.

Clearly the goal of not tying up your capital in bad trades has an important impact on your profits. Using sound money management will keep your trading funds and your profits safe. Though it is a difficult skill to learn, once you know how to practice good money management techniques, you can almost guarantee that you will be a successful trader.

If you've picked up some pointers about Futures that you can put into action, then by all means, do so. You won't really be able to gain any benefits from your new knowledge if you don't use it."

More information can be found at http://www.futurestradingsite.com

Forex trading tips

Last year I started a practice account to trade Forex, I must say at first I was lost, it required a lot of studying and learning, and trust me, the practice account is just to practice using the system, the real account is another story... I believe every day many people get the idea they are gonna get rich with Forex, and you probably can if you have the money to invest, but you have to be willing to take loses, remember that in Forex if you make money it only means that somebody else lost money, and you can be on the side that helped someone else to make money…

I share with you this 5 tip to Foreign Exchange currency market:

1.       Know your Fx trading market.

Always educate yourself about the currencies that you trade and everything related to Forex, you need to know everything before jumping to the water. The more you learn about the country (from economics to social situations) of the country´s currency you’re trading in the forex market, the more likely  you’ll be to make predictions about which way the money will move.

2.       Pick a forex trading system and stick with it.

Most experienced Forex traders will recommend you use a system, trading in the Forex market by system allows you to automate your trades based previous trading. Get a system set up and stick to it in order to make the most of your forex trading.

3.       Practice makes perfect, but remember that the real world gives you the experience

Practice forex trading accounts are great for learning and getting you familiar with Forex trading systems but they do differ from the reality of trading (in the sense that the world changes by the second). The recommendation is to start off with a mini forex account to bring you losses to a minimum while you get the hang of it.

4.       Avoid  the margin until you´re a Pro

Margin trading is an easy way to lose your money quickly. Avoid Forex margin trading until  you have no doubt about what you’re doing.

5.       The bottom line is counting Dollars

The bottom line is how much money you made with your trade, stay away from counting won or lost trades, count your dollars.