Basic Forex Principles Explained!

The Forex market is the largest market and is also the most liquid market. It has certain principles that you should follow. The thing is that getting started, or even pursuing a career in Forex trading isn’t easy, you need to get lots of good sleep with your wedge pillow amazon in order to be able to handle. There are countless elements that you need to acquire knowledge of, because if you don’t, then the one thing that you will acquire is that of pure failure! All in all, to be able to trade successfully in the Forex market, you must consider the following aspects:

Significance of Forex Trends

Forex trends typically tend to provide investors and dealers with the most necessary aspect of trade, which is information. The high and lows of the market are precisely and accurately found from trend lines and thus, trends act as a present and future guide for investors. Trends help to calculate support and resistance levels that act as pivotal points for deciding purchase and sale times of currency. With the help of trend lines, investors can understand their entry and exit points in the Forex market. The most valuable information that the trend lines provide are the unwarned movements in the market depicted by their sharp turns in the pattern.

Different Types of Forex Trend lines

There are different forms of trend lines that are used in terms of carrying out a basic Forex market analysis. All the types always follow the basic trend guidelines that assume that a trend cannot be inferred from two points and the beginning and end of a trend line cannot be chosen upon ones convenience. A simple line drawn between the first data point and a last data point is not a trend. Now, there are three types of trends, simple line trends that can vertical, horizontal or diagonal. There are Fibonacci trend lines that have gained quite popularity nowadays, as they provide an excellent and clear way of understanding Forex market trends. Then there is the pivot trend line that are used to find out fluctuations of the market at previous time frames and last but not the least speed lines where calculations are made in thirds unlike the other three types.

Selecting Currencies

Forex trading currencies should be selected in pairs. Also, there is no such connection between the forex pair you select and the ‘base working currency’ (the currency to handle the forex account and make withdrawals and deposits). If you want to “buy USD”, for the simple fact that it is less than the EURO, and you have speculated that the USD will increase in the near future, then once the rate of the USD has attained the level of your anticipation, you can close the deal and get more EURO against the USD and hence, you earn a profit.

Amount selection

Although Forex trading deals in currencies, but there’s no physical cash transaction in the process. Rather, the Forex deal has a “volume”, which signifies the amount of currencies in the contract. You need to identify the volume of contract instead of purchasing the whole amount. Generally, most of the transactions are carried on common leverage and so you can deal 10,000 euro with much less amount.

Selecting the amount of risk

Risk is always involved with the amount you are investing, because it is the maximum you can lose. At a ratio of 1:100 leverage against 10,000 EURO, you actually put USD 100 at risk.

Stop loss rate in Forex Trading

This rate is the currency exchange rate at which the deal will close automatically when the market attains this rate. In this situation, you would lose USD 100 from your investment. The “stop loss rate” can be defined in a different way but the amount of risk will change accordingly. A direct relationship exists between the “margin” (the risked amount) and “stop loss rate”, which is required for the deal.

Freeze rate

In forex trading, after going through the rate of the deal, you might be all set to go ahead with it, but to be honest; you may need to take a few seconds to think. The freeze rate allows you to think for those few seconds, and allows you to either accept or decline the deal.

Accept

Once you are ready to accept the deal, it is activated. If you are ready with enough money for the  trade to get through, dive in. Now you are in an “open position” in the Forex trade.

These basic concepts and principles of Forex trading are going to help you a great deal once you get started. Just pay attention to them, and you’ll do just fine in the live market!

The beginners guide to the Forex Market – Part 2

How to get started with Forex trading: The basics

A newbie in the field of Forex trading needs a place to start. To be honest, those who have what you can call a ‘no sense of direction’ upon entering the world of Forex are faced with nothing but sheer failure. To be honest, before actually getting down to making a successful trade in the most volatile and liquid market, it is necessary for you to pay attention to certain bits of preparations that are totally important. Knowing about the much-dreaded Forex market is essential, and practicing with a demo account certainly helps. These are actually the basics of entering the Forex market. Opening an account with a highly reputed broker and getting acquainted with the various market terminologies and trends also sets you one step ahead of the game. However, to give you a bit of a head start, discussed below are certain basics that you should understand if you want to trade in the Forex market in a successful manner:

What’s the exchange rate?

At large, the Forex exchange rate is the value of a certain world currency with respect to another world currency. It represents the amount of quote currency (second currency while quoting currency pair) that is needed to achieve the precise amount of base currency (equal to 1 monetary unit of exchange).

How do I actually indulge in trading currency?

Forex trading is done in various loads like the macro lot, which is around 1,000 units of a currency. The mini lot is 10,000 units of the base currency. A standard lot is 100,000 units. There are three sessions in which the actual trades need to be carried out. These are inclusive of the European trading session, Asian trading session and United States trading session. The main currencies of each market are traded during these market hours, and what you need to know is the basic fact that various currency pairs have additional volumes during certain sessions.

Pairs and Price Interest Point

Forex trading is done in pairs where a trader can buy one currency and sell another. On the whole, the Forex market is quite unlike the stock market where only a single buying and selling transaction of stocks is carried out. All currencies are priced out to the fourth decimal point. The term ‘PIP’ stands for Price Interest Point, and typically, it is considered as being the minimum increment of trade. One pip in a micro lot corresponds to only a 10 cent move in the price where losses are easier to manage. One pip in a mini lot represents one dollar, and ten dollars in the standard lot.

How do I gain knowledge about the Forex market?

The first and fore-most task of an online trader is to get to acquire a basic insight into his very own trading details and strategies. For this reason, it is highly recommended for you to acquire a detailed Forex trading education before actually starting to trade in the live market. Various types of books are available in the market that will help you greatly in this regard and will help you gain profits in all your trades. If you don’t have any past knowledge and experience about the transactional condition of currency trading, then Forex trading is going to turn out to be a difficult task for you. You must understand the basic Forex terminologies like exchange rate, long position, short position, bid price, ask price, spread etc.

Start Trading With a Forex Demo Account:

Begin with a Forex Demo Account. Beginners fail to succeed due to lack of practice and experience, discipline and knowledge. Forex Demo Market sharpens and improves your skill before you enter the real market of Forex trading.

Money Management Approach:

Experts suggest not risking more than 2-3% of the total trading account in the Forex market. Money Management approach should be done in such a way so that a trader can continue in his field in a long-run even in critical and adverse conditions.

Observe The Trend:

While Forex trading a trader must give proper attention and follow the trend of the Forex market in order to attain his desired goals. You can maximize your chances to succeed by observing the trend or by making your own trend.

Educate Yourself about the Leverage

Leverage is both useful and harmful.  One can make a large trade even with a small capital .Most brokers allow leverage from 50:1 to 400:1. The result can be disastrous if it is not utilized properly. Forex trading is thus an excellent choice for people with low capital to earn huge profit.

Familiarize Yourself with Reading the Charts

To know about the different types of chart before starting to trade is absolutely essential. The working of the charts should be clear in the mind. Time frames allow us to understand the nature of the market. Short time frames provide an idea about the movement of the market minute to minute while the larger ones give us a general idea about the larger trends. Before starting forex trading one must give ample time to study the charts and analyze the market.

Research Different Brokers

Before actually making an account and starting to trade, researching different brokers is necessary to find the one that is suitable for you. The ones with more than ten years of experience should be preferred in this regard to be honest. Also, look at the different products offered by the broker and reviews about them. This will make sure that you have a smooth experience while conducting your trades in the Forex market.

The beginners guide to the Forex Market – Part 1

What exactly are the basics of the Forex market?

For those who are new to the world of Forex need to know that a Forex trader uses a special software and brokerage accounts to access the international currency market and place trades. The trades are actually made and financed by the brokerage. The brokerage makes its money by charging fees for this particular service that it offers, and then the money lent to cover the costs of the trades needs to be paid back.

The trader is supposed to be able to make enough money off the trades to cover his costs and make a profit, or else, he will only be faced with losses in the market. The profits are generated from the differences between the values of the currencies involved. In theory, a person should be able to make a profit by anticipating the differences. If the US dollar is worth $1.60 in Canadian dollars, the trader should be able to make 60 cents by converting the US to Canadian dollars.

Traders take up many different approaches to try to determine when they can make the most money by making a transaction. Since the market is completely computerized, the speculators can make instant transactions and earn an instant profit. Many Forex enthusiasts try to automate their trading with computer programs called trading robots. These automatically buy and sell contracts when the market hits a certain level. Some people believe these programs will generate an automatic stream of income.

What exactly are the items that are traded in the Forex market?

Oil, gold and silver are some of the commodities traded in the Forex market though the major items traded are currencies which are traded in pairs. For instance, the British pound and the Japanese yen (GBP/JPY), or the euro and the U.S. dollar (EUR/USD) are basic examples of currency pairs.

Methods to invest in currencies

Spot Market– In the spot market, currencies are traded immediately or “on the spot,” using the current market price.

Futures– Futures are contracts to purchase or sell a particular asset at a particular fee on a date in the future.

Options– An “option” is a financial instrument that gives the buyer the ability, or the option, but not the obligation, to purchase or sell an investment at a specified price on the option’s completion date.

Hedging:

Hedging is a basic method that is meant to cut down the risk factor that is typically involved in Forex trading by taking both sides of a trade simultaneously. Provided that the concerned broker permits it, an easy way to hedge is simply by beginning a long and a short position on the same pair. In some case advanced traders employ two different pairs to make one hedge, however that can be extremely complex. For a case in point, a trader wishes to go short on the USD/CHF, as it has the best price range. After the short is initiated, if the USD/CHF looks a little strong and the trader might feel that it might break upward and makes the short pricey ,  so as to carry out what can be considered a balancing act, other USD pairs are being looked at. In case the EUR/USD moves inversely to the USD/CHF, the trader goes short on EUR/USD. Thus, the USD moves strongly against the CHF. So short EUR trade turns profitable and on the other hand the USD/CHF trade does not yield much, however the risk factor is cut down considerably as the two factors negate each other.

  • Position Trading:  The trading that is typically dependent upon the general exposure of a trader to a currency pair is known as position trading.
  • Forex Option: The agreement to buy a currency pair at a preset price at a particular time is referred to as Forex option

Scalping in Forex:

Scalping typically implies making an extremely short term trade for a few pips generally making use of high leverage. Generally, scalping in Forex is most effective together with a news release and supportive technical conditions. The trade typically has the potential to range from a few seconds to several hours too. Taking into account the risk factor that comes with scalping in Forex, this Forex trading technique does not yield much. Thus, it is recommended that in order to carry out scalping trades, it is most effective to do them together with an overall position of a trader. It should be utilized as a primary method of trading.

Guidelines for Advanced Forex Trading:

  • For maximizing gains in Forex, a trader should primary set a goal for himself. After that, it is necessary for the trader to pick a trading technique consistent with the goals that he has set for himself.
  • Deciding on a suitable broker who satisfies the needs and requirements of a Forex trader is of paramount importance. You are literally nothing without your broker, and you need to pay ample attention to its selection.
  • Trading should be always done in well-recognized currency pairs. The market trends needs to be analyzed perfectly. Decisions should be taken taking the market trends into account.
  • Advanced trading techniques should be employed carefully and it may provide an edge over one’s competitors.

Which brokers offer Copytrading?

Which brokers offer copytrading?

All of my loyal readers would already know what copytrading is. But, for those who don’t, copytrading is all about mirroring or copying the trades made by highly experienced and knowledgeable traders. This way, you would be in a better position to trade in a profitable manner, irrespective of how small or large scaled a trader you are! My money is making me more money, so I get lots of free time to do what I want. I’m thinking about losing weight but I need a bit of help. I was reading a Bioharmony complex plus review and I think I might order some for myself and try it. I’ll let you guys know in a future post if it worked!

Now, there are countless brokers out there that offer copytrading services. Here is a brief overview of some of the best out there:

1. Etoro
The kind of recognition and fame that Etoro holds in the trading world is simply immaculate – it cannot be matched! Etoro offers outstanding copytrading services, which are definitely going to make the entire trading experience a whole lot simpler for you. This way, you would be able to trade by copying the best traders present on the eToro trading network – the platform is fast, simple, and easy to understand. In order to get started, you would need to create an account, and then start using the investment network offered by the platform to look for the most successful traders at the moment. Once you spot a traders that you are interested in copying, the next thing that you need to do is select a position of your funds to begin investing and you’re good to go! It’s as easy as that!

2. Alpari
Alpari is amongst the most well-known names in the entire Forex world. On the whole, it also offers a truly exhilarating yet simple trading platform that is surely very easy to understand. Alpari offers a social trading platform that goes by the name of TraderConnect. This platform, along with its countless other unique features, makes it possible for traders to indulge in copytrading. You now have the opportunity to add leading traders on to your portfolio – what’s best is that doing so would allow you to AutoCopy their trades! It couldn’t get easier than that! The platform further allows you to trace open position in real time.

3. FXJunction
FXJunction also offers copytrading services that are known for being simple, and easy to use. Through this platform, you would actually be able to communication and interact with traders of all levels based across the world. When you start copytrading, you would have the opportunity to follow, copy and even autocopy some of the best, most highly experienced and knowledgeable traders on the platform.

The brokers and platforms mentioned above are some of the best in the trading world. They offer top notch copytrading services, allowing you to make maximum profits, even if you are an amateur trader!

 

What is Copytrading in Forex?

Are you interested in trading Forex, but don’t have the kind of experience and knowledge required to succeed? Well, if that is the case, then there is simply nothing for you to worry about!  The only thing that you now have to focus on is that of copy trading.

So, what is copytrading all about? Well, when you get into copytrading, you basically start copying or mirroring the trades that are made by some of the most highly knowledgeable and experienced traders out there. This procedure is additionally known as MentorsCopy trading, and is largely being practiced in the Forex world. The best part about it is that it makes it possible for everyone involved to trade in a far more profitable manner. No matter how small or large scaled a trader it is that you are, you now get to trade just like a professional!

When it comes to copy trading, it becomes possible for you to imitate trading strategies that are typically being conducted by highly experienced traders. The best part is that it isn’t just their individual trades that you can copy, but even their overall investment strategies too, thereby guaranteeing that you would be trading like a complete professional. All that it takes is a mere click of your mouse, and that would assign a particular percentage out of your account balance for the copying of a specific trader’s strategies. However, you can also choose to follow multiple traders simultaneously.

Copy trading – is it like social trading?
To be honest, yes, however, in copy trading, you interact with other financial traders instead of trading the market being followed directly. On the whole, both of these concepts are fairly similar to each other, and it is necessary for you to know their differences in order to make sure that you know which one is best for you.

What are the benefits of copy trading?
Want an honest answer? There are countless benefits that copytrading tends to offer. For starters, every single position or movement that the trader who you are following takes on the trading platform is going to be mirrored into yours till the time that you keep copying them. Now, you also have the ability to alleviate your risk by copying a number of different traders in terms of their multiple instruments and strategies.

A major advantage that you get to benefit from when you copytrade is that you get to acquire detailed information regarding the trading history, success rate and portfolio of all the traders that you are copying. This way, you would be in a better position to track and analyze their performance prior to actually getting down to copying their trades.

On the whole, copytrading is a truly flexible and simple means of trading socially, which makes it possible for investors to enjoy a whole lot more freedom with regards to their trading. So, if you want to get on top of the trades, yet don’t have the knowledge or experience required for it, get down to copytrading right now!