Fact – 95% of forex traders lose and they will make one or more of the mistakes below, so avoid these common errors or join them, here they are:
Thursday, June 17, 2010
Spot Forex Trading – Effective Use of Price Alarms
The spot forex is a support and resistance market. Whatever forex tools and forex indicators you are using to trade the spot forex market, the experience can be greatly enhanced by understanding near term forex support and resistance along with longer term forex support and resistance numbers for the currency pairs of interest.
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Forex Trading ? 95% of Novice Traders Lose ? Could you Win?
There is one fact that you need to consider carefully before you engage in FOREX trading and if you do, you could save yourself a lot of money, so here it is:
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Forex ? Difference Between Foreign Exchange Market And Stock Market
The foreign exchange market is also known as the FX market, and the forex market.
Trading that takes place between two counties with different currencies is the basis for the fx market and the background of the trading in this market. The forex market is over thirty years old, established in the early 1970’s. The forex market is one that is not based on any one business or investing in any one business, but the trading and selling of currencies.
Much Higher Volume Traded inthe Forex Market than the Stock Markets
Companies issue stocks to raise capital for expansion, equipment and other projects. Stocks have been a very popular form of investment for years. Each share of a stock a person owns represents a small ownership of the company.
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Forex Foreign Exchange Market – The Foreign Exchange Market Or How to Build Your Bank Account Forex Trading
The foreign exchange market of currencies is one of the largest markets in the world. In fact in 2007 the amount traded daily on the foreign exchange was 3.2 trillion dollars! At one point this market was reserved for the big banks, investment houses, etc. But today you can start for $1000.
Much Higher Volume Traded inthe Forex Market than the Stock Markets
Companies issue stocks to raise capital for expansion, equipment and other projects. Stocks have been a very popular form of investment for years. Each share of a stock a person owns represents a small ownership of the company.
Stock values fluctuate based on the fortunes of the company. When the company is doing well the stock price will increase, at this time the investor can sell their stock to capture the profit or they can continue to hold it in hopes of greater profits in the future. Some companies will pay dividends on stocks; dividends are a small share of the profit per each share of stock.
To buy and sell stocks you must use a broker and go through one of the stock exchanges. In the US there are two exchanges, the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation System (NASDAQ). Some very large companies may have stocks on multiple exchanges but most companies will sell their stocks on one or the other.
Until recently the stock market was seen as a long-term investment strategy. Most portfolios would have a large number of “Blue Chip” stocks. These are stocks that have proven their value over a long period of time. With the addition of internet trading we are seeing what is typically known as day trading. Day traders attempt to take advantage of the daily fluctuations in the market by making multiple trades during the day. This is a fairly high-risk method of investment and is further hindered by the large number of commissions charged for each transaction.
In some cases stocks can be bought on margin. In the stock exchange your margin rates are usually about 50%, which means you need half the cost of the stock to be able to buy it.
FOREX
The FOREX exchange is significantly different than the stock exchange. On the FOREX exchange almost all trades are short-term trades, in fact a trader may only hold a currency for a few minutes before moving it again. Since there are no brokers fees in the FOREX exchange you can make numerous trades in one day without racking up large commission fees.
With over $1.5 trillion in trades every day the FOREX exchange is the largest financial market in the world. To put this in perspective all of the American stock markets combined only handle about $100 billion worth of trades a day. This huge volume causes the FOREX exchange to be the most fluid market in the world. Because so much of the world economy is dependent on moving currency from country to country there is always a buyer and a seller for every currency combination. The stock market on the other hand is not nearly as liquid, you may not always find a buyer for the stock you want to sell or a seller for the stock you want to buy.
The FOREX market is not located in a single place but is worldwide. Due to time zone changes the FOREX market is open 24 hours a day 5 days a week.
Stock exchanges are normally only open for 7 hours a day, you can not buy or sell a stock if the exchange that it is listed on is closed at the time.
FOREX is more predictable than the stock market as well. It follows well-defined patterns, you can also leverage better in FOREX than the stock market. Margin accounts in FOREX run as high as 100:1 which means you only need $1 to buy $100 worth of currency.
The Forex Market
The first thing that is going to remind anyone of the Forex market is that it allows people the opportunity to trade round the clock and in an almost entirely seamless manner as well. This means that as long as there is liquidity you can trade from Sunday, 5:15 PM EST until Friday till four in the evening EST. This ability to trade throughout the week gives people trading in currencies an excellent chance to customize their trading schedules and it is also possible to trade without having to worry about the opening bell or having to deal with market gaps.
No Commissions Charged
Another major advantage of dealing with the Forex market is that you do not have to pay any commissions and your costs are mostly limited to your bid/ask spread. There are no commissions to be paid and nor do you have to pay extra transaction fees and you can also trade on spreads that come to you from the leading banks in the world via the Forex Trading Station.
There is also a major difference between the Forex market and the equity market in that when you deal in foreign exchange you do not face any kind of restriction on short sales – and this is possible regardless of the direction in which the Forex market is moving.
Information related to the Forex market is generally limited to just six major currencies and all information regarding these currencies is readily available to the public in the form of public dissemination of government reports as well as from research institutions and everyone can easily tap this source of information.
At the same time, entering the Forex market means having to accept a higher level of risk and so you need to be careful about this particular form of trading because the high risk can work against you; though it can also work for you. To get the best out of the Forex market requires that you first identify your investment goals, your experience in forex trading and your appetite to accept risks.
Given the fact that there is a greater possibility of losing your money in the Forex market you must always ensure investing only that much money as you can afford to lose. That being said, the forex capital market still offers the best investment opportunities that cannot be found elsewhere. This is why there has been tremendous growth in this market over the last decade and it is estimated that presently volumes of trade in the forex market reach as much as two trillion US dollars on a daily basis.
Forex - EUR/USD jumps after US jobs report, testing 1.24 - Forex Pros
Forex - EUR/USD jumps after US jobs report, testing 1.24
Forex Pros
Forex Pros – The euro extended gains versus the US dollar on Thursday, testing the 1.24 mark in the wake of disappointing US jobs data and as fears over …
FOREX, COMMODITIES, STOCKS OUTLOOK June 17th: Cliff's 2 Minute D rill 10:30 GMTBenzinga
Forex - USD/JPY slides after US jobs data, hitting new daily lowForex Pros
FOREX, COMMODITIES, STOCKS OUTLOOK June 17th: News, Analysis Trades 10:30 GMTBenzinga
FXMarketAlerts.com -NASDAQ -istockAnalyst.com (press release)
all 244 news articles »
Forex Pros
Forex Pros – The euro extended gains versus the US dollar on Thursday, testing the 1.24 mark in the wake of disappointing US jobs data and as fears over …
FOREX, COMMODITIES, STOCKS OUTLOOK June 17th: Cliff's 2 Minute D rill 10:30 GMTBenzinga
Forex - USD/JPY slides after US jobs data, hitting new daily lowForex Pros
FOREX, COMMODITIES, STOCKS OUTLOOK June 17th: News, Analysis Trades 10:30 GMTBenzinga
FXMarketAlerts.com -NASDAQ -istockAnalyst.com (press release)
all 244 news articles »
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FOREX: Bad Credit Not an Obstacle to Trading on Margin
Understanding Forex margin is essential if you plan on getting involved in trading the market. Brokers will extend margin to you in your trading account unit you have bad credit. Here are a few things to consider about how and why they do this.
Forex Margin
Whenever you open a Forex account, the broke are is going to give you the ability to trade with margin. Whenever you open a standard account, you will typically get 100 to 1 margin. Whenever you open a mini account, you will be able to get margin that is 200 to 1. The broker is not going to check your credit or look at anything else in order to determine if they extend this margin to you.
Reasoning
The reason that Forex brokers extend large amounts of margin to every customer is because that it is necessary in order to profit from this market. When you are trading the Forex market, you are hoping to take advantage of very small movements in the exchange rate between two currencies. The exchange rate is only going to move a fraction of a percent in most cases. If you are going to take advantage of these movements, you have to be able to control large amounts of money.
Best FOREX Trading Hours
When looking at the available FOREX hours to trade, you will quickly realize that you can trade 24 hours a day. However, that does not necessarily mean that conditions are always the same. Here are a few things to consider about the best FOREX trading hours.
London Session
The best time to trade the FOREX market is from 8:00 GMT to 16:00 GMT. The reasoning behind this is that this is when the London FOREX market is open and trading strong. They open at 8:00 GMT and they keep trading for the next eight hours. Even though you can trade from anywhere in the world, there are certain trading centers that a large portion of trading activity takes place in. The London session is the largest FOREX trading session in the world. Because of this, there is an unusually high amount of volume at that time. This means that you will have some nice movements in the market as well as great liquidity. You will not have any trouble getting your orders filled at a fair price.
Overlap
In addition to this, the New York session will start during the middle of this time. When this happens, you have two sessions overlapping with many traders involved in the market.
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