Forex Path Basics April 29, 2008
Posted by fxpath in Forex Path Basics.add a comment
Forex trading is an activity that has been around for many years yet is unknown or misunderstood by many.
Those that do know what Forex trading is all about usually come to love the excitement trading can bring and several of these people go on to devote their whole lives to the skill.
It could be said that regardless of whether you have even heard of Forex trading before, the chances are you have already done it in one form or another without actually realizing it.
If you have ever been to a foreign country before and had to exchange currencies at your local bank then you have already taken part in Forex albeit in a far less profitable, less exciting and less lucrative way.
The term Forex is derived from the words ‘Foreign’ and ‘Exchange’ and quite simple means to take part in trades involving the exchange of one countries currency with another. Other terms often used to refer to Forex include ‘Spot FX’ or simply ‘FX’.
Of course there are some major differences and benefits from trading Forex online through established brokers over simple currency exchange for your holiday, yet the core principles are the same.
Forex currency exchange trading is one of the fastest growing trade markets in the world. It is also the biggest with an estimated 1.8 trillion dollars being exchanged every single day.
With these stats to it’s name it should come as no surprise that one of the major reasons for this exponential growth is the fact that Forex trading offers incredible earning potential.
This is also why large multi-national corporations have been investing in foreign exchange for years and more and more individuals are utilizing currency trading to supplement their incomes and some are even living purely off the profits they make.
Forex Glossary April 29, 2008
Posted by fxpath in Forex Glossary.add a comment
Here are some of the most common terms used in FOREX trading.Ask Price ¨ Sometimes called the Offer Price, this is the market price for traders to buy currencies. Ask Prices are shown on the right side of a quote ¨C e.g. EUR/USD 1.1965 / 68 ¨C means that one euro can be bought for 1.1968 UD dollars.
Bar Chart ¨ A type of chart used in Technical Analysis. Each time division on the chart is displayed as a vertical bar which show the following information ¨C the top of the bar is the high price, the bottom of the bar is the low price, the horizontal line on the left of the bar shows the opening price and the horizontal line on the right of bar shows the closing price.
Base Currency ¨ is the first currency in a currency pair. A quote shows how much the base currency is worth in the quote (second) currency. For example, in the quote – USD/JPY 112.13 ¨C US dollars are the base currency, with 1 US dollar being worth 112.13 Japanese yen.
Incredible Forex Leverage Ratios April 29, 2008
Posted by fxpath in Forex Market.add a comment
So why does Forex trading offer such incredible earning potential? Well firstly the currency exchange market operates through brokers who offer some significant leverage ratios to their traders.
For example, you decide to purchase 10,000 US Dollars against Japanese Yen at 125.00. Next day you sell 10,000 US dollars and buy Yen at 126.00 making a profit of approximately $79. To fund this position you need a deposit of $100 not $10,000 since the rest of the amount is leveraged to you by your Forex broker.
If you were to try and trade without any form of leverage you would make very minimal profits and it would not be worth your time trading.
This is the beauty of Forex trading, any individual trader, no matter what their starting capital, can experience the thrill ride of trading large amounts of currency and making big profits without depositing thousands of dollars.
Massive Earning Potential April 29, 2008
Posted by fxpath in Forex Market.add a comment
Another factor that lends itself favorably to the earning potential of Forex trading is the fact that the market is open 24 hours a day. As one market is closing another is opening, Forex literally follows the sun around the earth – where the sun is shining the Forex is trading! This means you can be making profit 24 hours a day on Forex, particularly if you make use of an automated trading system.
The speed at which things change in Forex is also a major factor behind why currency exchange can be so profitable. Barely a second goes by without currency changing in value.
Unlike stocks are shares where you can be sitting on a trade for month, even years, waiting for the price to move favorably, currencies can make you a substantial profit within minutes or even seconds of you commencing a trade.
There are also no expensive commission fees to pay anyone in Forex. Brokers make their money from the difference between the buy and sell price of a currency. This means you never need to concern yourself with the thought that you will lose some of your profits to your broker – whatever you earn you can keep!
Forex is the world’s largest and most liquid trading market. You can consider it as the most sophisticated home business you can ever venture in. The trading instruments of this market are the currencies of different countries, so the fluctuation of currency’s rates allows you gaining a real profit.
Forex information can help you in making substantial gain from your trading. As any other business you would require to do the groundwork for preparing yourself with a sound knowledge base.
You can seek the forex information from the traditional sources like books and magazines. But as the Internet is fast becoming the major source of forex information as well. Technical analysis, charts, electronically generated trading signals etc. make your forex information a full proof one.
WHAT YOU NEED April 29, 2008
Posted by fxpath in Getting Started.add a comment
Here are some of the basic forex information that you require for maximizing your profit:
- The market is open round-the-clock facilitating to trade for 24 hours a day;
- The market works with huge money and gives you complete freedom to open or close the position of different volume
- With leverage of say 1:100 you can trade for $1 000 000 with an initial deposit of $10 000
- The currency rate establishes in accordance with current supply and demand on the market
- You can work globally as it requires only your skills and Internet access.
You must have the right kind of forex information to develop a trading plan. It should consist of a position, why you enter, stop loss point, profit taking level, and a sound money management strategy. A good plan based on forex information will remove all the emotions from your trades.
You can also find the forex information on the trend of the market. When the market is bullish, go long, otherwise if it is bearish, you short.
You must focus on capital preservation based on the forex information. Your main goal should be to preserve the capital. Therefore do not trade more than 10% of your deposit in a single trade.
Candlesticks and Forex Trading April 29, 2008
Posted by fxpath in Candelsticks.add a comment
As an investor in the forex market, you must know the importance and impact of a methodology involving technical analysis.
Candlesticks and forex should therefore sound as inseparable phrase because it is perhaps the oldest and proven method for successfully predicting the future price trends from available price and volume data.
The Fundamentals Of Forex Fundamentals April 29, 2008
Posted by fxpath in Forex Fundamentals.add a comment
Those trading in the foreign-exchange market (forex) rely on the same two basic forms of analysis that are used in the stock market: fundamental analysis and technical analysis. The uses of technical analysis in forex are much the same: price is assumed to reflect all news, and the charts are the objects of analysis. But unlike companies, countries have no balance sheets, so how can fundamental analysis be conducted on a currency?
A Primer On The Forex Market April 29, 2008
Posted by fxpath in Forex Market.add a comment
by Jason Van Bergen
Getting Started in Foreign Exchange Futures April 29, 2008
Posted by fxpath in Getting Started.add a comment
by Justin Kuepper
The spot foreign exchange (forex or FX) market is the world’s largest market, with over one trillion U.S. dollars traded per day. One derivative of this market is the forex futures market, which is only 1/100th the size. This article examines the key differences between forex futures and traditional futures and looks at some strategies for speculating and hedging with this useful derivative.
Forex Futures versus Traditional Futures
Both forex and traditional futures operate in the same basic manner: a contract is purchased to buy or sell a specific amount of an asset at a particular price on a predetermined date. (For an in-depth introduction to futures, see Futures Fundamentals.) There is, however, one key difference between the two: forex futures are not traded on a centralized exchange; rather, the deal flow is available through several different exchanges in the U.S. and abroad. The vast majority of forex futures are traded through the Chicago Mercantile Exchange (CME) and its partners (introducing brokers). OTC per se; they are still bound to a designated ’size per contract,’ and they are offered only in whole numbers (unlike forward contracts). It is important to remember that all currency futures quotes are made against the U.S. dollar, unlike the spot forex market
However, this is not to say that forex futures contracts are
Profiting From Interventions In Forex Markets April 29, 2008
Posted by fxpath in Forex Profit.add a comment
by Justin Kuepper
How would you like to make US$1,287 in 10 minutes? Well, if you had purchased a $100,000 lot of US dollar/Japanese yen on Dec 10, 2003 at 107.40 and sold 10 minutes later at 108.80, you could have!
