Why You Need A Forex Trading Guide

By John Sandler

Without the proper background knowledge, attempting foreign exchange or FOREX training can be very risky. When starting at the beginning, it is very important to stick to the FOREX guide until you feel comfortable with all the ins and outs of this type of trading.

To give you a brief background, FOREX trading principally involves the buying and selling of foreign currencies, with the goal of purchasing a currency that rises in value and selling it in order to make a profit.

Familiarity with the market can help, but FOREX trading is unpredictable and currency values change quickly, creating a fair amount of risk. If you dont keep yourself abreast of the relevant news, FOREX trading may not be the right fit for you.

A FOREX trading guide will help you learn the basics in the area of trading currencies. These guides will teach you knowledge such as the reasons that cause fluctuations and appreciation of currencies, the terms used for currencies exchange, which currencies are frequently traded and where FOREX traders usually profit from while trading FOREX currencies.

Remember FOREX markets require much determination and patience! These markets are open 24 hours a day, seven days a week! Things will be moving very fast paced for you at first, which will create lots of uncertainty regarding when you should on a buy or a sell. Having a reliable guide can help to "slow down" these events and make them intelligible for you.

In fact, it's precisely when you enter this fast paced arena that a FOREX guide would be most important. You will be able to decipher the various fluctuations, why they happened at this or that time. It's these types of insights that separates those who rely on incomplete information and speculation, instead of reliable information.

The basic type of trade you will be conducting on the foreign exchange market will be that involving paired currencies. This means that, for example, you may hold the Japanese Yen in relation to the Swiss Franc. Therefore, the value of your Yen holdings will depend on how much it's worth against the Swiss France. This is crucial. The movement in price between those two currencies, or their "exchange rate", will be your cue as to whether to continue to hold to your Yen holdings or to sell. Assuming in this case you bought your Yen Holdings using Swiss Francs, then you would want the Yen to go UP in value vis-a-vis the Franc, so as to incrase your returns. You can then turn around and sell the Yen for more Francs than you used in the original purchase.

While a FOREX guide is important in learning how to trade, it will not tell you the future of the markets. Changing values of currencies are tied to a number of difference factors such as global events, traders speculations, and interaction between other countries. These complicated interactions are what make FOREX trading so unpredictable. - 23217

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Getting the Right Forex Trading Broker

By Jane MacRae

If you have been in the forex game, you will understand that a right forex trading broker can really be your life saver. Despite that there are so many brokers out there you can choose from, to find the right one is not always easy. Here are some tips to help you go about.

* Select One That Offers a Free Demo Account

Many online forex brokers offer free demo or test accounts to new and potential members. Take advantage of them.

A demo account not only introduces you to forex transaction (in case you are a newbie), but also lets you take a look at the trading platform used by that broker. You want an interface that is easy to learn and understand, and that you will be comfortable to use.

* Always Ask For References

A good broker will not mind giving you references. So don't be too shy to ask for them! You need to be able to talk to other people who have used his services, and find out whether or not they are happy with their experiences.

If a broker refuses to give you references, you should probably steer clear.

* Find Out the Minimum Deposit Requirement to Open an Account

Almost all forex brokers ask for a minimum amount deposit when you open an account with them.

In case one broker asks for a larger deposit than you are willing to start with, search for one that requires a lower minimum. There are options out there for every investor, no matter how much or how little they have to invest.

* Check the Broker's Credentials

Despite that there is no centralised, governing body to regulate the whole forex market over the world, the business practices of each forex broker is regulated by institutions in the countries where they are located.

A broker located in the US, for example, should be registered as a Futures Commission Merchant (or FCM) with the Commodity Futures Trading Commission (or CFTC). They should also be registered with the National Futures Association (or NFA).

* Examine the Service Charge

Keep in mind that cheaper is not always better.

Compared to their competition, some brokers may charge less for their services. However, they may try to make up for the difference with hidden fees that you may not even be aware you are being charged.

Before going into business with a broker, ask about possible hidden fees, read the fine print, and learn as much about them as you can.

It can be an inevitable (and sometimes painful) experience for most forex players to find a right forex trading broker. With the tips given in this article, you should at least know what to look at. Remember, though, you can still make mistakes but don't get frustrated. Sometimes, we just grow out of try and error. - 23217

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Click here for our review of a well-known automatic forex trading system in the market, which will grant you a huge advantage over your competitors. Also check out this related article about trading spot forex.

Trading Secrets

By Ahmad Hassam

Trading is speculating. It is not investing. It is not the buy and hold strategy that was taught to you. Trading can be challenging. Trading is a risky business and requires active participation. Speculation is done in the hope of profiting from market fluctuations by taking a business risk. It also requires putting your money on the side of the trade on which you think the market is going to go up or down. Successful speculation requires predicting outcomes and analyzing different market situations.

If you are a trader, you should appreciate the fact that if you apply the correct techniques for analyzing trades, manage your money and protect your trading account, you can be wrong 70 percent of the time and still be a successful trader. How is that possible? It is only possible by entering a trade where the risk/reward ratio is les than1/3.

Opportunity keeps on shifting from one market to another. For example, forex and gold markets are really hot while stocks are down. Gold prices are going up. Those who entered the trend at the right time and ride the trend for maximum profits will make a lot of money in the gold markets. Right now countries, institutional investors, retail investors, in fact almost everyone is running and buying gold as a hedge against turmoil in the global markets.

Last year in 2008, oil prices had reached almost $140 per barrel in a matter of few months. Many hedge funds had made a lot of money by investing in crude oil futures in the year 2008. Then the bubble burst and oil prices came tumbling down to almost close to $35 per barrel. This situation may continue for some months or some years but suddenly you will find that crude oil futures have become a great investment opportunity again. Right now oil prices are down due to the reduced demand in the global markets.

Oil prices will again go up in a few years time as the global economy recovers and demand for oil increases. In trading it is the timing that is of essence. Timing for entering the market and the timing for exiting the market!

Investors and traders make the mistake of focusing only on one market. Many end up spending time on only one market. In reality all the markets are interlinked. Futures, options, forex, stocks, commodities, all markets are effected and in return effect other markets. If something happens in one market, you will find the repercussions in the other markets. Successful trading requires mastering a strategy that enables you to trade multiple markets and multiple time frames.

They do testing, development, put on a million indicators, go and trade live. They do everything they can while spending all kinds of time trying to figure out one market and one timeframe. But then what almost happens is that market starts to go sideways or the opportunity shifts to another market.

There were so many stocks just a few years ago that were incredible to trade that either dont exist anymore or would not trade successfully today. So you really have to have the ability to be able to adopt the market conditions and not waste your time to really master one market which is critical.

This is counterintuitive. A lot of people will teach you that you really need to learn the ins and outs of one market. But the problem with that philosophy is that its very difficult to stay with one market and one timeframe. - 23217

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Know The Trend Forex System. Learn Forex Trading!

Discover The Truth About Out Of The Money Covered Call Option Writing!

By Marc Abrams

Many websites and e-books on investment training strategies promise you incredible things. Writing Covered call options on stock is one of the most popular trading strategies taught today. These websites promise that you can earn up to 10% monthly returns using that very strategy. Sound good? Read on.

Under the right circumstances, impressive monthly returns can be achieved by selling out-of-the-money covered call options. This strategy has been successfully used by me. However, it is not without its disadvantages. The public has not been properly educated by the website and e-book marketers. This strategy is marketed as having low risk and being conservative. They leave you holding the bag when it all goes wrong.

Selling out-of-the-money covered calls works when the stock market is going up in value. They also work when the stock market is neutral, meaning the market trades sideways with little swing up or down. I don't know about you, but when was the last time the stock market traded sideways for any length of time?

We are currently in the midst of an extremely volatile market. We have recently seen swings in the Dow as much as 200 points in either direction on any given day. Hardly a profitable market for an out-of-the-money covered call writer. Once that stock you are holding starts to decline, so do your profits. I can assure you that profits can evaporate very quickly. I have seen stocks fall from $10 per share to $1 per share over night! There is never enough premium on an option sale to cover that kind of decline.

You want the stock to get called, that is the key to out of the money covered call writing. Many so called experts do not want the stock to get called. They say you should keep the stock so you can continue to sell a covered call option on it in future months. This strategy is flawed. What you should do is select stocks that are moving up in value, in a rising market. Those stocks will make you the most money. I am happy when a stock gets called because I ended up making the profit that I expected.

What happens if the stock goes way up in value? The stock simply gets called away if it rises up past the strike price and stays there through expiration. Isn't that what you wanted in the first place? Because you did not participate in those gains you may feel like you left money on the table. If you feel that way just buy the stock outright and don't sell covered call options on it. Why not just let the stock get called away, take your profit and move on? Then look for stocks to buy and sell calls on for the next month.

Remember, selling out-of-the-money covered calls can provide an excellent source if income in a rising stock market. However, the stock market we find ourselves in today is less than ideal for this strategy. There are, however, other strategies that will offer significant protection in a volatile or declining stock market. - 23217

About the Author:

Marc Abrams Is A Certified Public Accountant With Over 15 Years of Financial And Investing Experience. Visit Marc's Website at http://www.rebuildingmyfuture.com To Learn More About Successful Covered Call Option Writing Strategies In Today's Stock Market.

Stock Market News Is More Important Than Ever

By Mike Swanson

Following stock market news can be confusing at the best of times. This is especially true if one is uncertain about what drives prices up and down. Given the volatile world that we live in at the moment, the situation is made even more complicated.

Although many people have not thought it important to keep up to date with the markets, this is not the right decision. They should at least be aware of some of the trends surrounding different industries as this will allow them to make an informed decision when it comes to their investment.

If you are already an investor then it is to your own advantage to make sure that you know how your stock is doing. You can keep track of the share movements over time and take the decision as to whether or not you should invest more extensively in a certain company or sector. What you might find is that you shift your investment direction entirely.

The markets of the current economic environment are characterized as volatile. They seem to change every day and sometimes even in shorter time frames than that. Share prices that were once secure have lost value and vice versa. Knowledge is power in a situation like this and one has to keep up to date with the market news.

By staying abreast of the situation, investors are able to ensure that their clients are making the right choices even if sometimes these choices are the safe kind! In today's economies, not many people have money to play with on the markets. They are either sticking with what they know or playing it very safe and not buying any shares at all.

All people that are involved in the markets need to make sure that they keep track of stock market news. You will have to rely on this information to help you make the right choices in a very difficult market. - 23217

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