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Archive for the ‘FOREX’ Category

FOREX FOR BEGINNER, FOREX FAQS

This is the FAQS (Fre­quently Ask Ques­tions) a Forex Begin­ner would ask.

1. Why is forex so popular?

Forex trad­ing is attrac­tive because it offers unpar­al­leled free­doms. A forex trader can live any­where as long as he/she is within reach of the inter­net. Work from home or office. Trade while trav­el­ing! A forex trader can usu­ally choose his/her own hours to work since the global for­eign exchange mar­ket is open 24-hours a day. There is NO inven­tory, NO ship­ping, NO billing, NO col­lec­tions, NO employ­ees, NO com­mut­ing and NO dress code. And finally, since forex traders can poten­tially earn a very high income, they enjoy the pos­si­bil­ity of never, ever work­ing for some­one else again.

2. How fair is the forex market?

The forex mar­ket is so large and has so many par­tic­i­pants that no one player, not even a large
gov­ern­ment, can com­pletely con­trol the long-term direc­tion of the mar­ket. That’s why so many experts have called forex the “most level play­ing field” on earth.

3. Where is the cen­tral loca­tion of the forex market?

For most cur­rency instru­ments, there is NO cen­tral loca­tion where trad­ing takes place. This is called the forex “spot mar­ket,” not to be con­fused with cur­rency futures or options. The bulk of forex trad­ing takes place between a few hun­dred large banks that process trans­ac­tions for large com­pa­nies and gov­ern­ments. These insti­tu­tions con­tin­u­ally pro­vide exchange rates for each other and for the broader mar­ket. The most recent quo­ta­tion from one of these banks is con­sid­ered the market’s cur­rent pric­ing for that cur­rency. Trad­ing occurs over the inter­net, by tele­phone and through com­puter ter­mi­nals at hun­dreds of loca­tions around the globe.

4. Can I really trade at any time and anywhere ?

Of course! This sys­tem is per­fect for peo­ple who have jobs or “have a life” and don’t want to, or can’t, sit in front of their com­puter all day trad­ing. You can suc­cess­fully trade around your work hours. Since the FOREX mar­ket is open 24 hours a day (Mon­day through Fri­day) there are good chances that you’ll be able to find trad­ing oppor­tu­ni­ties that won’t con­flict with your job.

With Forex, you can trade from any­where. If you like to travel, this is a dream busi­ness. Take your lap­top with you and you can trade the FOREX and make money any­where in the world where you have an inter­net con­nec­tion. You have total free­dom of loca­tion. FX Trad­ing is not bound to any one trad­ing floor and is not cen­tral­ized on an exchange, as with the stock and futures mar­kets. The FX mar­ket is con­sid­ered an Over-the-Counter (OTC) or ‘Inter­bank’ mar­ket, due to the fact that the entire mar­ket is run elec­tron­i­cally, within a net­work of banks, con­tin­u­ously over a 24-hour period.

5. How much can I win?

The FOREX has a DAILY trad­ing vol­ume of around $1.5 tril­lion dol­lars — 30 times larger than the com­bined vol­ume of all U.S. equity mar­kets. This means that 1,498,574 skilled traders could each take 1 mil­l­lion dol­lars out of the FOREX mar­ket every day and the FOREX would still have more money left than the New York Stock would have daily!

6. Is there any Forex risk?

Is forex risky busi­ness?  Com­par­ing trad­ing the forex to other forms of trad­ing, you will find that from a risk or reward stand­point, forex trad­ing pro­vides respectable returns.

7. Can I try first for FREE?

This is one of the numer­ous par­tic­u­lar­ity of the forex, you can try one month for free whith the major­ity of the bro­kers, with­out any oblig­a­tion. You will have access to the demo trad­ing plat­form and you will trade in direct, with a sim­u­la­tion account.
In most of the case, you will have $50,000 to start! (not real money). You will place your trades in directs, every­thing like the pros. Once you are prof­itable move into a real account with a small investment.

8. Is it too difficult?

Trad­ing Forex  is so easy, any­one can do  it. You don’t need  to watch bloomberg TV every morn­ing or  to buy every finan­cial news­pa­per to deter­mi­nate the trend. The Forex Mar­ket is highly predictable.

9. When does forex trad­ing occur?

The  first  ses­sion,  the  Tokyo  Ses­sion,  begins  each  week  on  Mon­day morn­ing  in  the  Asia-Pacific  region (Sun­day evening in the Amer­i­cas). Trad­ing con­tin­ues non-stop, mov­ing into the Lon­don Ses­sion and on to the New York Ses­sion until all mar­kets close on Fri­day afternoon.

10. What are the pri­mary cur­ren­cies traded in forex?

For  most  online  bro­kers,  there  are  four  main  cur­rency  pairs  that  are  heav­ily  traded  and  that  offer imme­di­ate liq­uid­ity most of the time:
Euro / US Dol­lar
US Dol­lar / Japan­ese Yen
British Pound / US Dol­lar
US Dol­lar / Swiss Franc

11. How often does a per­son have to trade?

The beauty of self-trading forex is that you can trade as occa­sion­ally or as often as you wish. You might rely on longer-term strate­gies that may require check­ing the mar­ket as lit­tle as once or twice a week. Or, you might trade shorter-term meth­ods that may require that you watch the mar­ket for a few hours a day.

12. How much money does it take to open a real money trad­ing account?

If you’re a new stu­dent of forex, you should first prac­tice with a free prac­tice account, often called “demo trad­ing,” using  “pre­tend” money. When you  feel  ready  to  trade with  real money, you can open a  “mini” account with as lit­tle $300 USD, although we rec­om­mend start­ing with no less than $1000-$2000.

13. Who par­tic­i­pates in the FX market?

Cen­tral, com­mer­cial and  invest­ment banks have tra­di­tion­ally dom­i­nated the Forex mar­ket. Other mar­ket par­tic­i­pa­tion  is  rapidly  increas­ing,  and  now  includes  inter­na­tional  money  man­agers  and  bro­kers, multi­na­tional cor­po­ra­tions, reg­is­tered deal­ers, options and futures traders, and pri­vate investors.

14. When is the FX mar­ket open for trading?

Forex  is  a  true  global  24-hour mar­ket­place.  The  trad­ing  day  begins  in  Syd­ney,  and moves  around  the globe as each finan­cial cen­ter comes to life. Tokyo  fol­lows, then Lon­don, and finally New York. Investors can respond in real time to any fluc­tu­a­tions caused by cur­rent eco­nomic, social and polit­i­cal events.

15. How do I cal­cu­late prof­its and losses?

When you close out a trade, you can cal­cu­late your prof­its and losses using the fol­low­ing for­mula:
Price (exchange rate) when sell­ing the base cur­rency — price when buy­ing the base cur­rency X trans­ac­tion size = profit or loss

Assume you buy Euros (EUR/USD) at 1.2178 and sell Euros at 1.2188.

If the trans­ac­tion size is 100,000 Euros, you will have a $100 profit.

($1.2188 — $1.2178) X 100,000 = $.001 X 100,000 = $100

Sim­i­larly, if you sell Euros (EUR/USD) at 1.2170 and buy Euros at 1.2180, you will have a $100 loss.  ($1.2170 — $1.2180) X 100,000 = — $.001 X 100,000 = — $100

You can also cal­cu­late your unre­al­ized prof­its and losses on open posi­tions. Just sub­sti­tute the cur­rent bid or ask rate for the action you will take when clos­ing out the position.

For exam­ple, if you bought Euros at 1.2178 and the cur­rent bid rate is 1.2173, you have an unre­al­ized loss of $50.
($1.2173 — $1.2178) X 100,000 = — $.0005 X 100,000 = — $50

Sim­i­larly, if you sold Euros at 1.2170 and the cur­rent ask rate is 1.2165, you have an unre­al­ized profit of $50.
($1.2170 — $1.2165) X 100,000 = $.0005 X 100,000 = $50

If the quote cur­rency is not in US dol­lars, you will have to con­vert the profit or loss to US dol­lars at the dealer’s  rate.  Fur­ther,  if  the  dealer  charges  com­mis­sions  or  other  fees,  you  must  sub­tract  those com­mis­sions and  fees  from your prof­its and add  them  to your  losses  to deter­mine your  true prof­its and losses.

16.  How do I fund my account?

When trad­ing the Forex online there are usu­ally a few dif­fer­ent ways to fund your account:
Per­sonal or Busi­ness Check and Wire Transfer

17. How do I with­draw money from a trad­ing account?

Most mar­ket mak­ers would ask you to fax your request, and within 5 –7 work­ing days, the money will be in your local bank account. Before com­plet­ing an appli­ca­tion form and trans­fer­ring your money, it is best to  check  with  the  com­pany  you  decide  to  trade  through  as  they  all  have  their  own  pol­icy  regard­ing admin­is­tra­tion of funds.

18. How can I man­age risk?

The most com­mon risk man­age­ment tools in Forex trad­ing are the stop-loss order and the limit order. The stop-loss  order  directs  that  a  posi­tion  be  auto­mat­i­cally  liq­ui­dated  at  a  cer­tain  price  in  order  to  guard against dra­matic changes against the posi­tion. A  limit order sets the max­i­mum price that the  investor is will­ing  to  pay  in  a  trans­ac­tion,  as  well  as  a min­i­mum  price  to  be  received  in  exchange.  The  for­eign exchange mar­ket­place is so liq­uid that it is easy to exe­cute stop-loss and limit orders.

19. What trad­ing strat­egy should I use?

Both eco­nomic fun­da­men­tals and tech­ni­cal fac­tors influ­ence the deci­sions of cur­rency traders. Those who fol­low eco­nomic  fun­da­men­tals use gov­ern­ment issued reports, cur­rent news, and broad eco­nomic trends to antic­i­pate move­ments in price. Tech­ni­cal traders rely on trend lines, sup­port and resis­tance lev­els, and a  vari­ety  of  charts  and  math­e­mat­i­cal  analy­sis  to  iden­tify  trad­ing  oppor­tu­ni­ties.  Over  time,  the  most sig­nif­i­cant price move­ments occur  in close asso­ci­a­tion with unex­pected events. Per­haps the cen­tral bank changes rates with­out warn­ing or an elec­tion puts an unex­pected can­di­date in power. News from con­flicts cer­tainly impacts cur­rency pric­ing. More often than not, it is the expec­ta­tion of a cer­tain event rather than the actual event that dri­ves price pressures.

20. How much am I will­ing to risk?

What is my upside and down­side poten­tial?
What are the mar­ket con­di­tions? Is the mar­ket volatile or calm?
What is the logic behind enter­ing this trade?
When will “I” know if the assumptions/logic behind the trade is right or wrong?
Hav­ing answers to these ques­tions is not enough. Being able to artic­u­late a def­i­nite plan and then exe­cute it is, in National Acad­emy of Forex’s view, a nec­es­sary pre-condition for being a suc­cess­ful trader. Many are able to develop excel­lent plans yet do not have the dis­ci­pline to carry the plans to fruition. Emo­tion­s­get in the way of indi­vid­u­als being able to exe­cute their trad­ing strate­gies. Trad­ing deci­sions are busi­ness deci­sions and should not be decided on an emo­tional basis.

for more info, visit :  www.n2cm.com

THE INTRODUCTION

WHAT IS FOREX ?

Forex is an acronym for FOR­eign EXchange and is the world­wide cur­rency inter-bank or inter-dealer mar­ket that uses a float­ing exchange rate sys­tem. It is the world’s largest finan­cial mar­ket, with an esti­mated daily aver­age of more than $1.5 to $2 tril­lion. The sim­ple sense of Forex  is simul­ta­ne­ous pur­chase and sale of the cur­rency or the exchange of one country’s cur­rency for the one of another coun­try. The world cur­ren­cies do not have a fixed exchange rate and are always fluc­tu­at­ing being traded in the cur­rency pairs like Euro/Dollar, Dollar/Yen and others.

In case you have a fore­cast that one cur­rency would get higher to another you can exchange the sec­ond one for the first one and wait for the profit. If you are lucky to see the trades fol­low­ing your fore­cast you can make an oppo­site trans­ac­tion and to exchange cur­ren­cies back gain­ing the profit.

Forex trans­ac­tions are car­ried out by Forex bro­ker­age com­pa­nies, also known as major banks deal­ers. Forex mar­ket is world­wide and your Euro­pean col­leagues may make a trans­ac­tion with Japan­ese traders when it’s time for you to sleep in the North Amer­ica. There are 3 shifts for the major insti­tu­tions to work in due to 24-hours a day activ­ity of the Forex mar­ket. It’s pos­si­ble to ask for overnight exe­cu­tion for take profit and stop-loss orders of the client.

Forex trans­ac­tions are car­ried out by Forex bro­ker­age com­pa­nies, also known as major banks deal­ers. Forex mar­ket is world­wide and your Euro­pean col­leagues may make a trans­ac­tion with Japan­ese traders when it’s time for you to sleep in the North Amer­ica. There are 3 shifts for the major insti­tu­tions to work in due to 24-hours a day activ­ity of the Forex mar­ket. It’s pos­si­ble to ask for overnight exe­cu­tion for take profit and stop-loss orders of the client.

FOREX AND BUSINESS EFFECT

Because you’re not buy­ing any­thing phys­i­cal, this kind of trad­ing can be con­fus­ing. Think of buy­ing a cur­rency as buy­ing a share in a par­tic­u­lar coun­try. When you buy, say, Japan­ese Yen, you are in effect buy­ing a share in the  Japan­ese econ­omy, as the price of the cur­rency is a direct reflec­tion of what the mar­ket thinks about the cur­rent and future health of the Japan­ese economy.

FOREX FOR BEGINNER

Nowa­days small traders have an oppor­tu­nity to pur­chase the small lots (units), as a result of the large inter-bank units being split by mar­ket maker bro­kers like FX Solu­tions, at the amount they like. The traders of any size like small com­pa­nies and indi­vid­ual spec­u­la­tors have an access to the mar­ket at the same price fluc­tu­a­tions and exchange rates which only large play­ers used to enjoy recently. Mar­ket mak­ers mon­i­tor the rates so that pro­duce their profit on the dif­fer­ence of rates at which the cur­rency was bought and sold.

A lot of new­bie traders deal with their trades as gam­bling, that surely bring them to hav­ing noth­ing in the end. You should always keep the phrase “be care­ful!” in your mind. This mar­ket would give you its profit pos­si­bil­i­ties only if you learn the basic things hard and make lots of demo trading.

The sta­tis­tics is that as much as 95% of trader come to los­ing their money at Forex, 5% have profit and less than 1% of traders make large for­tune at Forex. You shouldn’t pro­duce, sell or adver­tise any­thing trad­ing at Forex. Your assets are your knowl­edge, expe­ri­ence and a small amount of cash.

This mar­ket is a plat­form for banks, transna­tional cor­po­ra­tions and indi­vid­ual traders to change the cur­ren­cies they pos­sess into other ones. This is the spot Forex mar­ket. At this mar­ket you can trade with up to 1:400 lever­age which means that you’ll get $400 on your account for each dol­lar invested. So, you can trade with the $400,000 sum hav­ing invested $1,000 onto your account.

for more info, visit :  www.n2cm.com