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Forex
| Forex Trading | Advice
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Look out buddy !, You have stumbled into a
Goldmine
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Overview
| In this day and age,
Forex market has become the world's largest financial market ever
existed. Literally trillions of dollars worth traded on a daily
basis around the clock. with roughly 30 hours break every weekend.
Players in the market ranging from multi-billion dollar institutions
to individuals with deposits as little as few hundreds. This year
after the impact of the world financial crisis, Forex markets gained
more power and more fans. This is a market that prospers in such
conditions.
Forex trading is very risky, do not fall into the trap: If you are
new to the forex perils I suggest you read and tweet this important
Forex advice article by
Maya Ebasi.:
Learn how to Protect Yourself from Financial Ruin in Fx trading
The FOREX term
comes from Foreign Exchange. where you buy one currency with
another, or sell a currency to buy dollars. Currencies come in pairs
so each one has a value attached to it like EURUSD which means the
value of EUR in US dollars. If you buy EURUSD then you will profit
when this pair goes up in the chart which is known as heading north,
and you will be losing if EURUSD goes south. If you sell this pair
then the exact opposite is true.
Trading Foreign Exchange: A Changing
Market in a Changing World ,
Structure of the Foreign Exchange Market ,
Forex Market Hours, in this page
below
The above links are provided in case
you would like to do some reading about Forex trading.
To the right you can read recent
trading news and view up to the second Forex quotes, you can also
covert between the major currencies and view upcoming events that
will have a great effect on currency prices.
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The whole idea of Forex currency
trading is to buy cheaper and sell at a higher price which will
result in profits. You may also start by selling first and later
buying at a lower price. Most Forex brokers allow hedging which
means that you can have opposite trades running at the same time. So
the act of selling will not close an already open position that you
bought the same currency pair. Otherwise, without hedging enabled a
sell position would close an open buy position and vise versa. You
can open a Demo Account and practice all
you want with virtual money until you learn all you can about market
behavior and amounts of orders before you go live with Forex
trading. Forex Trading can fully automated via the use of
Expert Advisors on
Metatrader 4 trading Platform
In order to make substantial profits
on momentary or daily changes in currency prices, Forex trading is
done with high leverage provided by the broker. Leverage of 1:100 is
the most common for average size accounts ranging from $1000 to
$100000. Higher leverage is available up to 1:500 but not recommended
since it presents a much greater risk.
Most beginners and losers press hard
on leverage and when the market goes against them, they can not stay
long before a margin call occurs in their account and eats up their
deposits. Successful traders are very careful with leverage usage
and usually they do not use more than 5% of their buying power which
is known as Free margin.
Read my
Forex
Market Blog post about using the right leverage |
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Currency Trading online | forex
learning |
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On the above chart, The
GBPUSD pair went up for 1 hour as shown by the 60 candle sticks
above. a move from 1.6400 to 1.6500 or exactly 100 pips which
translates to the following in your account:
| 1.Buy 10
000 EURUSD at green signal and close order at red Signal =
Profit $100 |
| 2.Buy 100
000 EURUSD at green signal and close order at red Signal =
Profit $1000 |
| 3.Buy
1000 EURUSD at green signal and close order at red Signal =
Profit $10 |
| 4.Sell 10
000 EURUSD at green signal and close order at red Signal =
Loss $100 |
| 5.Sell
100 000 EURUSD at green signal and close order at red Signal =
Loss $1000 |
| 6.Sell 1000 EURUSD at
red signal green close order at red Signal =
Loss $10 |
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| 7.Buy
1000 000 EURUSD at green signal and close order at red Signal =
Profit $10000 |
| 8.Sell
1000 000 EURUSD at green signal and close order at red Signal =
Loss $10000 |
| So, what is the proper
size of a forex account to perform any of the above
operations? First,
let us see the range of the market above, in 2 hours a 100
pip change occurred, so an account of $100 deposit would
have been wiped out with $10k lot losing trade and same
account would have grown to $200.00 with $10k winning trade.
In the above example, I
consider this currency price change over 1 hour period of
time to be very moderate as I experienced much more violent
changes occurring in a much shorter periods of time over the
past weeks.
Just few months ago when the
feds announced USD quantitive easing I was sitting in front
of my monitor managing my 25k live account on some bitching
brokerage firm that I do not want to mention here, just when
I had 500k buy positions and 500k sell positions, about to
open another buy position on the EURUSD so I break the
balance and make money if the pair goes up, something
totally unbelievable happened, the pair opened 5 cents
higher in the very next minute, this never happened ever
before, but now it did and it could happen again.
So what went wrong with my
all balanced trades? I got a margin call instantly even
though I had 90% available free margin in the minute before,
and the margin call with this particular broker means
liquidating all open positions without exceptions. They
return money laid out for open positions which I mentioned
it account to 10% of total account.
Why did I get a margin call
with all perfectly hedged trades, as I discovered later, I
had assigned profit limits to my up trades, and the trades
were closed profitable allowing the sell trades losses to
mount to eat up all usable margin in the account.
the second minute the price
dropped one entire penny, the third minute the price went up
2 entire pennies, but what can you do after the broker
freezes the platform for a full 3 minutes !, and this was
the occasion that made me go back to MT4 trading platform,
and I will never trade with another broker not allowing MT4.
The above story shows that a
700 pip price change in one day is quite possible and this
is called market volatility. To be protected against such
occasions, account sizes should be as follows:
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| $500 to trade 5k lots one
order at a time or 3 trades 2 in opposite directions |
| $1000 to trade 10k lots one
order at a time or 3 trades 2 in opposite directions |
| $10 000 to trade 100k lots
one order at a time or 3 trades 2 in opposite directions |
| $100 000 to trade 1000k lots
one order at a time or 3 trades 2 in opposite directions |
| Of course, if you traded for
a while and have doubled your deposit already you can take
bigger chances with money you already made, otherwise
you should stick to the above rule so you won't be sorry.
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Forex
Signal Software by Forexbody |
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You can get forexbody accurate
SELL
in red and
BUY
in Green Signal and Suggested target for
each signaled trade. More |
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Best Forex Trading Advice
you can get anywhere ! |
| Got thousands of dollars? do not shove it
into a Forex account right away, First Learn in
Forex Demo trading
Mode, better yet, open a live mini account for under $300
and trade mini lots, Look at your numbers this way: When
you make $50.00 Profit in your live-practice account, think
of it as $500 in your standard account
When you lose $100.00 in your live-practice account,
think of it as $1000.00 you could lose with a standard
account.
When you Double your multi hundred account think of it as
You could double your standard Forex account
When you drain the entire mini account you could think of
it as if You have drained a multi thousand Forex account
Continue practicing your mini live account until it
either turns to a standard account, or become too small to
make the smallest order size which is a micro lot of NZDUSD.
at that time you either have to add funds or quit the entire
idea, but by doing this the right way you could have saved
yourself thousands of dollars in possible losses. |
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Forex Market Hours
Forex Market Hours :
just move mouse between vertical bars to view times |
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Simply move mouse cursor between the bars to see time on
Eastern, GMT and Dubai Time zones. |
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The Forex market is open 24 hours, 5 days a week. Monday
thru Friday business hours of the above cities |
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Recommended Forex Websites |
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Online
Forex Trade |
ForexMobiCom |
Reliable Forex |
Forex Online Center |
Demo Forex |
Worlds Forex |
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There is considerable exposure to
risk in any off-exchange foreign
exchange transaction, including, but
not limited to, leverage,
creditworthiness, limited regulatory
protection and market volatility
that may substantially affect the
price, or liquidity of a currency or
currency pair.
More over, the leveraged nature of
forex trading means that any market
movement will have an equally
proportional effect on your
deposited funds. This may work
against you as well as for you. The
possibility exists that you could
sustain a total loss of initial
margin funds and be required to
deposit additional funds to maintain
your position. If you fail to meet
any margin requirement, your
position may be liquidated and you
will be responsible for any
resulting losses. To manage
exposure, employ risk-reducing
strategies such as 'stop-loss' or
'limit' orders. |
