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!

The Difference between Trading and Investing

While trading and investing might seem synonymous, they are really different things altogether. Think about it. When you are in the Forex market, what are you personally doing? Are you trading or investing? Are you placing trades, or making investments?

Of course the terms can be exchanged by people and discussed in the same light. The terms can be treated as meaning the same thing. However, trading is really just about making a quick buck. It is short-term, whereas you should be thinking long-term. Investing is long-term. It is better to invest, rather than trade.

What you are doing as a Forex trader, is trading Forex, but it is best to think like an investor rather than a trader. The term ‘trader’ does not have ideal connotations, whereas ‘investor’ does. While you might technically be a Forex trader, make sure that you position yourself as an investor in the Forex market. What this means is, do not go out looking for short-term money-makers, because they do not really exist. It is possible to make fast money, but it is unlikely you will be able to sustain fast money. By positioning yourself as an investor, you will start thinking long-term and caring less about what you are going to make today, or tomorrow.

The richest of the rich do not talk about how much money they make per hour, or per day. The richest people talk in years. Poor people are more likely to say how much they make per hour. Richer people will more likely talk about how much they make per week or per month. People with real money talk about how much they make per year, or about their five-year plans.

This does not necessarily go against short-term trading strategies though. You can still scalp or use any kind of day trading strategy you like, provided that you still ultimately think long-term. Where are you going to be years from now? Think like this, instead of thinking about how much richer you will be by the end of the week. If you do that instead, you will most likely be down by the end of the week. Fast and easy money often never shows up to the party. Stop chasing it and chase your real dreams instead. You want a big house, right? You want a nice car, right? You will not make enough to afford those things by the end of the week, month or probably even year Forex trading. Five years from today though, you could well have all those things and more.

In conclusion, there is a difference between trading and investing. While you are a Forex trader, it is better to position yourself as an investor and think like an investor. Stop thinking short-term and start thinking long-term. If you are already thinking long-term, continue to do so. Visualize where you want to be. Real success is a marathon, not a sprint. Set short-term goals by all means, but understand that real success is long-term. Short-term success probably isn’t going to allow you to retire to an island for the rest of your life. Long-term success however, definitely could.

Why People Trade Forex

If you are looking to get started in the world of Forex, you might want to learn exactly why people decide to take on such a challenge. There are actually quite a few reasons why people trade Forex and these reasons may well motivate you to get started yourself.

With the stock market, you have to make sure you are up and running when the markets are open, otherwise you have no chance of actually making money, since the markets will be closed. The Forex market is unique in many ways, including the fact that it is open 24 hours a day, 5 days a week, closing only at weekends. This means that it does not matter what your time zone or schedule is, you can trade Forex, provided that you have some free time to dedicate to it.

In Forex trading, it also really does not matter how much money you have. Minimum deposits offered by Forex brokers are pretty puny and with just a few dollars you can get started. There are lots of different positions you can take in the markets and yours can be as big or as small as you like. The availability of leverage also means you can apply lots of risk to your trades if you wish. While leverage is not compulsory, with a proper Forex trading plan in place, it can allow you to make a lot of money with what you have. It is basically borrowing money, magnifying your gains and losses.

Another reason why people trade Forex, is the fact that you can do it from anywhere in the world on pretty much any device. Good Forex brokers now have platforms for not just desktop computers, but portable devices like mobiles and tablets too, so you can be trading at home or on the go. Forex trading is open to almost every country in the world too, so it does not matter where you are from in most cases.

It is also simpler than other financial markets. In the stock market there are tons of different stocks you can trade, which makes it complicated. In the Forex market, there is a limited number of major currency pairs you can actually trade, so you can master a particular currency pair.

Other reasons why people trade Forex include the fact that order delays are usually pretty insignificant. In other financial markets, delays can kill your profits, but order filling speeds in Forex trading are usually very fast, depending on your Forex broker of course. In regards to Forex brokers, there are also no payable commissions unlike in stock trading, so you can hold onto more of your money.

In conclusion, there are lots of reasons why people trade Forex, including the fact that it is open to anyone in any country, on any device, 24 hours a day excluding weekends. Other advantages of Forex trading include the lack of payable commissions on trades and the availability of huge amounts of leverage. Leverage is not compulsory, but the opportunity is still there for pretty much anyone to utilize. The advantages of Forex trading are huge at the end of the day and it is harder to think of reasons why you should not trade Forex. If you have not yet started, it might be worth considering opening an account and getting started today. Why not?

How to Win Forex Trades

While there are not any set steps that you can follow in order to win every single trade, there are things you can do to maximize your chances of success in the Forex market. Forex trading is difficult. If you want to win most of your trades, or at least have your profits outweigh your losses, there are some things you should consider.

First of all, consider responsibility. Accepting responsibility for your trades is one important factor when it comes to winning. If you want to make money trading currencies, you will need to accept all responsibility for your actions once inside the Forex market. Never blame one of your tools or pieces of software. Never blame a book that you bought on Forex trading. Never blame the market conditions even. The markets will always change. Sometimes you will win and sometimes you will lose, but accept responsibility for your wins and losses.

Secondly, while you should accept responsibility for the results you get, understand that it is essentially a game of odds. You cannot tell the future. You can only predict what will happen in the Forex market. This means that losses are inevitable, so do not let losses shake you. Provided that you have a Forex trading plan with tactics in place to prevent you from losing everything, a loss is just another loss.

With discipline however, you will be able to work hard to bend the odds in your favor. There will still be potential for losses on each trade you make, but the better your analysis and the harder you work at perfecting your Forex trading system, the greater your chances will be of profiting.

Your Forex trading system is important and can encompass everything. As a beginner, your system will gradually develop over time most likely, but when just getting started, it is best to make sure it focuses on long-term trends rather than short-term ones. Understand support and resistance, as well as breakouts. Know all about technical indicators, or at least the basics of many and a lot about a certain few that are most suited to your system. Manage your money effectively too with good money management.

Ultimately though, you should keep it as simple as you can, or it will be too complex to work with. It is better to understand an average system that to not totally understand an amazing system. Remember that your Forex trading system will also likely to change all the time, even if only by a small amount each time, so embrace changes and adapt accordingly.

Once you start seeing success, it is also important to stay calm and rational even here. Embrace success, but not so much that it sends you back down to where you started again. Handling success is what many Forex traders do not even consider, because they are so focused on becoming successful rather than knowing how to handle it. Once you do start to bring in profitable trades though, remember to stay calm and rational. Do not get overexcited or it might lead you to draw losses. You could get overconfident and take unnecessary risks that could well lead to the demise of your Forex trading career as you know it.

When success starts to pour in, you will need to start looking at ways in which you can continue to thrive. This does not mean applying more risk to your trades, but it means studying and practicing a great deal and making tweaks and changes to your system. It is always good, regardless of whether or not you are winning or losing, to keep on gaining more knowledge and experience.

Do not be tempted to make your system more complicated however. Your system may well develop to become more complex, but not complicated. When you start to get more advanced, your system will naturally become more complex but you will remain comfortable with it, since you will be becoming a more advanced Forex trader yourself. Complicated is different than complex. Complicated means you do not quite understand something, or you find something difficult to understand like your Forex trading system. Always keep it simple for you, as an individual Forex trader. Make sure you are always comfortable with your system.

In conclusion, if you want to know how to win Forex trades, you will need to accept responsibility, constantly improve, handle success well and embrace simplicity. There is a lot that goes into Forex trading and actually winning trades, but once you start building momentum and actually taking effective action, you will eventually begin to realize how simple it is. Forex trading is just a game of odds essentially. The key is simply to bend the odds in your favor as much as you can. With care, you can do this pretty effectively and make a lot of money.