FoReX TiPs

Why You Should Also Make Money in Forex?

2007-11-25T05:15:00.000-08:00

You are constantly hearing about ways to make form home and you already know 99% of these claims are either bogus or scams. Is there any legitimate business which can really help you to make money fast and easy? Is there any business which can help you to make real big money? The single answer to all these questions is FOREX.

Forex is real good business. You can make a lot of money in forex right from your home.

How much you can earn in forex?

That’s up to you. The earning potential is limitless in forex. You can make money fast and easily in forex.Forex is foreign exchange market. It involves buying and selling of currencies.

People from all walks of life are trading forex. You don’t have to a financial geek to trade forex. Anybody can trade forex. It’s very simple. And you don’t have to put a lot of money as investment; you can start with as little as possible.

But when you look out for training course to learn forex then you will come across by courses raging from $300 to $5000. This discourages many people from learning forex.

To overcome this problem we have developed a free course to teach forex in simple manner.

2007-11-25T05:06:00.000-08:00

**Top 10 Currency Traders**
Rank	Name	% of volume
1	Deutsche Bank	19.30
2	UBS AG	14.85
3	Citi	9.00
4	Royal Bank of Scotland	8.90
5	Barclays Capital	8.80
6	Bank of America	5.29
7	HSBC	4.36
8	Goldman Sachs	4.14
9	JPMorgan	3.33
10	Morgan Stanley	2.86

**Most traded currencies**
Currency distribution of reported FX market turnover
Rank	Currency	ISO 4217 code	Symbol	% daily share (April 2004)
1	United States dollar	USD	$	88.7%
2	Eurozone euro	EUR	€	37.2%
3	Japanese yen	JPY	¥	20.3%
4	British pound sterling	GBP	£	16.9%
5	Swiss franc	CHF	Fr	6.1%
6	Australian dollar	AUD	$	5.5%
7	Canadian dollar	CAD	$	4.2%
8	Swedish krona	SEK	kr	2.3%
9	Hong Kong dollar	HKD	$	1.9%
10	Norwegian krone	NOK	kr	1.4%
Other				15.5%
Total				200%

Forex Made Easy for Everyone

2007-11-25T05:03:00.000-08:00

Forex Made Easy for Everyone

Forex made easy is as simple as you would want it to be. The foreign exchange market is a worldwide market and according to some estimates is almost as big as thirty times the turnover of the US Equity markets. That is some figure to chew on. Forex is the commonly used term for foreign exchange. As a person who wants to invest in the forex market, one should understand the basics of how this currency market operates. Forex can be made easier for beginners to understand it and here's how.

Foreign exchange is the buying and the selling of foreign exchange in pairs of currencies. For example you buy US dollars and sell UK Sterling pounds or you sell German Marks and buy Japanese Yen. Why are currencies bought or sold? The answer is simple; Governments and Companies need foreign exchange for their purchase and payments for various commodities and services. This trade constitutes about 5% of all currency transactions, however the other 95% currency transactions are done for speculation and trade. In fact many companies will buy foreign currency when it is being traded at a lower rate to protect their financial investments. Another thing about foreign exchange market is that the rates are varying continuously and on daily basis. Therefore investors and financial managers track the forex rates and the forex market it on a daily basis.

Those who are involved in the forex trade know that almost 85% of the trading is done in only US Dollar, Japanese Yen, Euro, British Pound, Swiss Franc, Canadian Dollar and Australian Dollar. This is because they are the most liquid of foreign currencies (can be easily bought and sold. In fact the US Dollar is most recognizable foreign currency even in countries like Afghanistan, Iraq, Vietnam etc).

Being a truly 24/7 market, the currency trading markets opens in the financial centers of Sydney, Tokyo, London and New York in that sequence. Investors and speculators alike respond to the ever-changing situations and can buy and sell simultaneously the currencies. In fact many operate in two or more currency market using arbitrage to gain profits (buying in one market and selling in another market or vice versa to take advantage of the prices and book profits).

While dealing in forex, one should have a margin account. Quite simply put if you have US$ 1,000 and have a forex margin account which leverages 100:1 then you can buy US$ 100,000 since you only need 1% of the US$100,000 or US$1,000. Therefore it means that with margin account you have US$ 100,000 worth of real purchasing power in your hand.

Since the foreign currency market is fluctuating on a continuous basis, one should be able to understand the factors that affect this currency market. This is done through Technical Analysis and Fundamental Analysis. These two tools of trade are used in a variety of other markets such as equity markets, stock markets, mutual funds markets etc. Technical Analysis refers to reading, summarizing and analyzing data based on the data that is generated by the market. While fundamental Analysis refers to the factors, which influence the market economy, and in turn how it would affect the currency trading. Of course there are other economic and non economic factors which can suddenly affect the trading of the forex markets such as the 9/11 tragedy etc. One needs to have a shrewd acumen and a few number crunching abilities to strike gold in the forex market.

Forex Charts, Forex Trading Systems - No easy way to find Forex Charts and Forex Trading Signals

2007-11-25T04:59:00.000-08:00

If you’re new to forex, you’re going to need forex charts. As you develop your forex trading system, use the demo accounts that many trade brokers provide. They’ll generally provide free forex charts as part of their demo forex trading system.

Search the Internet for “forex” or “forex charts.” The choices will be a bit overwhelming. You will have to do research to get a good match, both with the forex trading system and the forex charts themselves. You may have to mix and match to get your specialized needs met.

As you refine your skills, you’ll find you’re more discerning of the tools. And you’ll begin to notice more features on the forex charts. The forex trading signals may be quite standard on many sites, but how they integrate the forex trading signals with the forex charts may not function well with your style.

Search and you’ll find forex trading signals that fit closely with your requirements. Your forex trading system will become more and more refined with practice. And that’s the best way to learn forex – practice with a demo account.

Learning the forex charts and the forex trading system of different brokers will be frustrating to start. Work through it, it will be worth it. Don’t accept the first one you try. Or even the one your friend uses. Forex trading system and forex charts are very personal. And you’re going to be spending a lot of time together. Get comfortable.

The only way to pick a forex trading system and forex charts is to take recommendations and suggestions from articles, trainers and friends. But then make it your own. Find a perfect fit for your forex trading system.

Forex Money Management... Trade safe building stable gains

2007-11-18T01:42:00.000-08:00

Money management is a way traders control their money flow: in or out of pockets... Yes, it's simply the knowledge and skills on managing a personal Forex account.

There are several rules of good money management:

1. Risk only small percentage of total account

Why is it so important?
The main idea of the whole trading process is to survive!
Survival first, and only then making money on top.

One should clearly understand, that Big traders first of all are skillful survivors. In addition, they usually have deep pockets, which means that under unfavorable conditions they are financially able to sustain big losses and continue trading. For the ordinary traders, the majority of us, the skills of surviving become a vital "must know" platform to keep trading accounts alive and, of course, to make good stable profits.

Let's take a look at the example that shows a difference between risking a small percentage of capital and risking a bigger one. In the worst case scenario of ten losing trades in a row the balance of trader's account will suffer this much:

Trades	Account balance	Risking 2% of total account per trade
1	Start — 5000	100
2	4900	98
3	4802	96
4	4706	94
5	4612	92
6	4520	90
7	4430	89
8	4341	87
9	4254	85
10	4169 — 17% of the account has been lost

Trades	Account balance	Risking 10% of total account per trade
1	Start — 5000	500
2	4500	450
3	4050	405
4	3645	364
5	3281	328
6	2953	295
7	2658	265
8	2392	239
9	2153	215
10	1938 — over 60% of the account has been lost

Apparently, there is a big difference between risking 2% and 10% of the total account per trade. A trader who has made 10 trades risking only 2% of balance per trade, under the worst conditions would lose only 17% of the total account. The same trader who had been exposing 10% of balance per trade would end up with loss of over 60% of the total account balance. A simple money management rule — significant results.

2. Rebuilding of a shrinking account is harder that it may seem to be

Let's take a look at calculations where a trader has lost some part of his account. How much effort will it take to recover the original account balance?

Account	% of account lost	New balance	Need to make
$ 5000	25%	$ 3750	35% of the new balance ($ 1250) to cover losses
$ 5000	50%	$ 2500	100% of the new balance ($ 2500) to cover losses
$ 5000	75%	$ 1250	300% of the new balance ($ 3750) to cover losses
Note that it's only to cover losses: Who is going to make money then..? And when?

Now, there is a challenge: try on your demo account to rise up 300% or at least 100% of your original account trading as it would be real money. Will that be easy? I don't think so. Can you prove me wrong?

3. Calculate risk / reward ratio before entering a trade

When chances to win in a trade are smaller than potential losses, don't trade! Remember — staying aside is a position.

For example: 40 pips to lose versus 30 pips to win, 20 pips to lose versus 20 pips to win — all that is a clear sign of bad risk management.

Before entering each trade, reassure that risk / reward ratio is at least 1:3, which means that chances to lose are tree times less than promises to win. For example: 30 pips of possible loss versus 100 pips of potential win is a good trade to consider entering.

Adopting this money management rule as a must, in the long run will dramatically increase trader's chances to succeed in making stable gains.

Next chart shows the "risk / reward" rule in practice.
Ten trades based on 1:3 risk / reward ratio were conducted. A trader was losing only $ 100 in each trade when he was wrong, but won $ 300 in each profitable trade.

Trades	Losing trades	Winning trades
1		+300
2	-100
3	-100
4		+300
5		+300
6	-100
7		+300
8		+300
9	-100
10	-100
Total	- $500	+ $1500
Grand Total	+ $1000 in profit

As we can see, constantly using 1:3 risk / reward ratio and being successful only 50% of the time, trader will still make a profit. The higher the reward ratio (compared to risk ratio) the better are chances to end up in profit.

4. And now let's study the example of applying money management rules:

So, risking no more than 2-3% of the total account per trade... How does it work in practice?
Let's use an example to understand this idea completely.

We have opened a trading account of 1000 dollars with a broker and got 20:1 leverage. So, now we have 20 000 dollars to trade with.

More "money" — more trading opportunities. Correct. But, more trading opportunities also means more risks, and when we talk about risks we talk about real account value which will shrink with each losing trade.
So, when we say risking no more than 2-3% of total account value we mean real account value — which is 1000 dollars in our case.

Well, let's start trading and do the math.
For our example, we have decided to always risk 2% of the account in each trade.
1000 x 2% = 20 dollars.
So, when the price goes against us, we will be out of the trade once we are -20 dollars.

One note before we move on.
To make our next calculations simple we will use simple values which can be different in the case with your broker.

Ok, time to trade and our trading potential measures 20 000 dollars (thanks to our leverage).

Let's try to trade them all at once: for one 20 000 dollar order our broker gives us a pip value of 2 dollars. This means that with each pip gained we will have +2 dollars in our pockets. Good. But this also means that with each pip lost our Real account will shrink by 2 dollars.
Since we can afford to lose only 20 dollars in one trade, we will be out of this trade once the market makes against us... 10 pips! Yes, only ten pips, since 10 pips of 2 dollar value each = 20 dollars.

Now, let's try to trade a 10 000 dollar position. Pip value for this position size is going to be 1 dollar.
Math: we can stay in trade until market makes 20 pips against us. Yes, this time we can sustain bigger changes in the market.

If we open position of 5000 dollars, our sustainability will raise to 40 pips. (Where pip value for 5000 dollar position is going to be 0.50 cents).
And so on.

As you can see, money management is strictly bound to real account value. And even if leverage allows trading larger positions, wise control of risks is required to keep wheels turning and account protected.

Forex Fundamental Analysis

2007-11-18T01:40:00.000-08:00

What is fundamental analysis?

Fundamental analysis in Forex is a type of market analysis which involves studying of the economic situation of countries to trade currencies more effectively.

It gives information on how the big political and economical events influence currency market. Figures and statements given in speeches by important politicians and economists are known among the traders as economical announcements that have great impact on currency market moves. In particular, announcements related to United States economy and politics are the primary to keep an eye on.

What is economic calendar?

Economic calendar is created by economists where they predict different economics figures and values according to previous months. It contains next data:
Date — Time — Currency — Data Released — Actual — Forecast — Previous

For example: If the forecast is better than the previous figure, then US dollar usually is going to strengthen against other currencies.
But when news are due, traders have to check the actual data.

If to look at oil prices, a rising price will result in weakening of currencies for countries which depend on huge oil import, e.g. America, Japan.

Whose speeches to keep an eye on?

Chairman of the Federal Reserve Bank of USA, Secretary of the Treasury, President of the Federal Reserve Bank of San Francisco and so on. Speeches of those prominent people are watched closely by traders.

What are the most powerful figures that move Forex market?

Interest rate
Traditionally, if a country raises its interest rates, its currency will strengthen because investors will shift their assets to that country to gain higher returns.

Employment situation
Decreases in the payroll employment are considered as signs of a weak economic activity that could eventually lead to lower interest rates, which has negative impact on the currency.

Trade balance, budget and treasury budget
A country that has a significant Trade Balance deficit will generally have a weak currency as there will be continuous commercial sellings of its currency.

Gross Domestic Product (GDP)
GDP is reported quarterly and is followed very closely as it is a primary indicator of the strength of economic activity.
A high GDP figure is usually followed by expectations of higher interest rates, which is mostly positive for the currency.

Forex Trading Tips

2007-11-18T01:38:00.000-08:00

Tip 1. Gamblers go to casino. All unproved, spontaneous actions in Forex trading — are a part of pure gambling.
Any attempt to trade without analysis and studying the market is equal to a game. Game is fun except when you are losing real money...

Tip 2. Never invest money into a real Forex account until you practice on a Forex Demo account!
Allow at least 2 month for demo trading. Consider this: 90% of beginners fail to succeed in the real money market only because of lack of knowledge, practice and discipline. Those remaining 10% of successful traders had been sharpening and shaping their skills on demo accounts for years before entering the real market.
A good demo account to start practicing with could be

Tip 3. Go with the trend!
Trend is your friend. Trade with the trend to maximize your chances to succeed. Trading against the trend won't "kill" a trader, but will definitely require more attention, nerves and sharp skills to rich trading goals.

Tip 4. Always take a look at the time frame bigger than the one you've chosen to trade in.
It gives the bigger picture of market price movements and so helps to clearly define the trend. For example, when trading in 15 minute time frame, take a look at 1 hour chart; trading hourly would require obtaining a picture of daily, weekly price movements.

If a trend is hard to spot — choose a bigger time frame. Up and down market patterns are always present. Always make sure you know the dominant trend, unless you are a scalper. Scalpers have no need to spend their time studying big trends, what's happening in the market here and now (during 5-10 minute time frame) should be of only importance to a Forex scalper.

Tip 5. Never risk more than 2-3% of the total trading account.
One important difference between a successful and an unsuccessful trader is that the first is able to survive under unfavorable conditions on the market, while an unsuccessful trader will blow up his account after 5-10 unprofitable trades in the row.

Even with the same trading system 2 traders can get opposite results in the long run. The difference will be again in money management approach. To introduce you to money management, let's get one fact: losing 50% of total account requires making 100% return from the rest of money just to restore the original balance.

Tip 6. Put emotions down. Trade calm.
Don't try to revenge after losing the trade. Don't be greedy by adding lots of positions when winning.
Overreaction blocks clear thinking and as a result will cost you money. Overtrading can shake your money management and dramatically increase trading risks.

Tip 7. Choose the time frame that is right for you.
Choosing wise means that you are comfortable and have time enough to analyze the market, place and close orders etc. Some people can't wait for hours for the price to make a move, they like action and therefore prefer smaller time frames. On the contrary, for others 10-15 minutes is a hustle to be able to make the right decision.

FOREX SIGNALS

2007-11-18T01:32:00.000-08:00

INTRODUCTION

There are lot's of Forex signals providers out there. New Forex traders might be thinking of looking for a reliable Forex signals provider. Is there any reliable Forex signals providers available?

Personally, I will say do not pay for Forex signals. Think about it - if a Forex signals provider sells Forex signals for living, you can doubt their Forex trading skills? Or else if they are pretty good in Forex trading and making lot's of profit, I am wondering why do they still bother to sell Forex signals for money. Thus, what would be the value of such Forex signals providers? The answer is ZERO.

There are Forex traders who have been relying on Forex signals arguing those Forex signals providers really help them making money in Forex trading. These Forex traders can even show their Forex trading logs as evidence. After some though, I came out with the assumption that assuming I am the owner of a Forex signals provider, in order for my business to be in black, obviously I need some satisfying customers......