Friday, February 26, 2016

An Introduction to Forex Currency Pairs

An Introduction to Forex Currency Pairs

If you plan on getting involved in the Forex market, you will need to understand what currency pairs are and how they work. Here are the basics of currency pairs and how to use them in Forex trading.
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Currency Pairs
When trading Forex, you will immediately notice that currencies are grouped into pairs. Each pair is made up of a base currency and a counter currency. The first currency that is listed in the currency pair is always the base currency. The second currency listed is always the counter currency.
Buying and Selling
When you work with currency pairs, you will always be simultaneously selling one and buying the other. However, you will deal with these pairs as an individual unit. For example, you will say that you are buying the EUR/USD pair. What this really means is that you are purchasing euros and selling dollars. By contrast, if you said that you were selling the EUR/USD pair, you would be selling euros and buying dollars. 
Profiting from Trades
When trading currency pairs, you will be able to profit by taking advantage of changes in the exchange rate between the two currencies. Money is made in these transactions when the value of one currency goes up against the other. For example, if you are purchasing the EUR/USD pair, you are hoping that the value of the euro goes up and the value of the dollar goes down.
The Majors
When talking about currency pairs, there are certain groups of pairs that are called the majors. This group of currency pairs makes up the vast majority of what is traded in the Forex market. This group consists of EUR/USD, GBP/USD, USD/JPY,  USD/CHF, AUD/USD and USD/CAD. In some cases, the NZD/USD pair is also considered one of the majors.
Lots
When trading currency pairs, you will be working with standard lots of the currencies. A standard lot is represented by 100,000 units of the base currency. Therefore, when you buy one lot of EUR/USD, you are essentially buying 100,000 euros and selling 100,000 Dollars. You can do this by using large amounts of leverage in your Forex trading account. For example, most brokers will allow at least 100:1 leverage when trading currency pairs. In some cases, you can get leverage as high as 500:1. 
Working With Brokers
In order to be able to trade currency pairs, you will need to open an account with a Forex broker. There are many different Forex brokers for you to choose from in the marketplace. Different brokers will offer different currency pairs for you to trade. Nearly every broker should provide you with access to the major currency pairs. However, if you want to trade some of the less popular currency pairs, you will have to shop around between the brokers. Most of the larger brokers will have a wide array of currency pairs for you to choose from for your trading.
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Friday, February 19, 2016

Stay in the Mix with FOREX Trading News

Stay in the Mix with FOREX Trading News

The FOREX trading news is one of the most important tools that a FOREX trader can use. The economic news is a very important indicator in what the market is going to do. You can sometimes avoid devastating losses in your account by avoiding trading directly before and after a major economic news announcement. Here are a few things to consider about the FOREX trading news. 
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Impact of News
With a number of economic news websites out there, you can look at the upcoming news releases that will impact currencies. You will also be able to see exactly what the expected impact of an announcement is. Some of the popular news sites use a color coding system with each announcement. For example, red announcements are high impact, orange are medium, and yellow are low impact. Many traders disregard the low-impact announcements and focus only on the high-impact announcements. 
Big Movements
After a high-impact news announcement has taken place, the markets can move significantly. If the news was big enough, the market could move hundreds of pips in a very short period of time. Many brokers will not honor stop losses or take profits during a news announcement. Therefore, there is a huge risk associated with trading directly before and after news announcements in FOREX. You need to make sure that you understand the risks involved and trade accordingly. 
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Thursday, February 18, 2016

The Benefits of Managed FOREX Trading

The Benefits of Managed FOREX Trading

With managed FOREX trading you can take potentially make a great return on your investment. Managed FOREX trading is when you invest your money with an experienced trader, or group of traders, to trade in the FOREX market. They take your money, put it into a pool of funds and then use that money to invest in the FOREX market. This type of trading can present you with several benefits as a trader. Here are a few benefits of managed FOREX trading that you will want to consider. 
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Benefits
  • Hands off- One of the great things about managed FOREX trading is that you do not have to spend a lot of time trading. You simply invest your money at the beginning with the managed fund and they take care of the rest. They trade the money in the market and they grow your deposit. You do not have to spend hours upon hours in front of the computer screen watching charts. You just give them your money and let them do it for you.
  • Performance- Another great aspect of going with managed FOREX trading is that it can provide you with a phenomenal performance for your investment. The kind of returns that you can get from good FOREX trading is unlike anything else in the world. You can make much more with FOREX as compared to stocks, bonds or mutual funds. The returns that you can get might seem unbelievable and unrealistic at first glance. However, there are some traders making phenomenal returns with the FOREX market. As long as you can find a good managed trading fund to get involved with, you can make a lot of money.
  • Experience- When you invest with a managed FOREX fund, you are relying on the experience of the traders. Trading the FOREX market successfully usually takes years in order to master. Therefore, if you did not go with a managed FOREX trading fund, you would have to learn all of the information yourself. By using a fund like this, you can just let someone that does it for a living handle it for you. You are leveraging their experience in the industry and it saves you quite a bit of time in the long run. It gets you into the market before you are actually ready to trade on your own.
  • Leverage- When you trade in a managed FOREX account, you are pooling your money together with many other people. Therefore, the money that the trader is controlling is usually quite a bit. Additionally, the FOREX market allows traders to trade with huge amounts of leverage. This makes the potential returns on your investment much higher than if you were just allowed to trade with regular leverage. It also allows regular people to get involved in the FOREX market, without needing millions of dollars to get started, which opens the door for a lot of people to get in. 
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Tuesday, February 16, 2016

How Develop Your FOREX Education Skills?

How Develop Your FOREX Education Skills?
Develop Your FOREX Education Using These 3 Tools
There are many different FOREX tools that you could potentially use to your advantage. The FOREX market is a very complex thing to grasp and when you get involved in it, you want to make sure that you know what you are doing. Otherwise, you could lose your entire account in a few minutes. This is definitely not a game for novices and you need to make sure that you learn everything that you can about it. Developing your FOREX education level is essential if you want to succeed. Here are a few tools that you can use to increase your knowledge in the FOREX market. 
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1. FOREX Seminar
There are many FOREX gurus out there that have seminars that will teach you how to trade. A FOREX seminar can help you get a good feel for the market and give you a few strategies that you can use. However, before you get involved, you need to make sure that you are dealing with a reputable teacher. There are many unscrupulous people that are associated with the FOREX market. Some people claim to be experts and do not know enough to teach you anything. You will want to stay away from these people at all costs. However, once in a while, you can find a legitimate teacher to teach you the ropes in FOREX. 
You will want to do some research on the person or company that is giving the seminar. Check various online sources and find out if they have made others happy in the past. If you find someone good, pay the tuition and go listen to them.
2. Online Coaching
Another great resource that you can use is online FOREX coaching. This is often done by the same people that offer FOREX seminars, except it is done over the internet. You can get one-on-one help from a real FOREX trader from your computer. They will take you by the hand and show you exactly what to do and when to do it. They will show you some of their tried and true strategies to trading FOREX. 
The great thing about this method is that you have someone there that can answer your questions. They will often give you materials to study and exercises to do. You can use this information to practice on your own and then use them as resource for your questions. This can be a fantastic way to learn FOREX, if you find a teacher that knows what they are talking about. 
3. Demo Account
Another essential tool in learning how to trade FOREX is a demo account. You can get a demo account at any FOREX broker. They will give you access to their trading platform and then will establish a fake account or money to trade with. You get real-time pricing information and can test out your strategies. This is essential before you start risking your own money in a live account. 
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Tuesday, February 2, 2016

Do Free FOREX Charts Really Help You

Do Free FOREX Charts Really Help You?

A number of different sources provide free FOREX charts for your use at any time. You can access these charts via the internet through any web browser. The charts have up to the second price data about all the major currency pairs in the FOREX market. You can keep up to date with all of the latest pricing information on each pair. If you are a currency trader, these charts can come in very handy. Here are a few things to consider about free FOREX charts and how they can help you. 
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Why Are They Free?
Companies provide free FOREX charts as a service to traders to learn about the market. Reasons for providing free FOREX charts may vary. However, most of the time, they are provided by someone that has something else to offer. Many times they are provided by FOREX brokers that would like you to open a trading account with them. If you get used to visiting their site for FOREX charts, you might be inclined to open an account with them. 
If they are not a broker, then they most likely have some other FOREX product to sell. They may be selling FOREX signals, an expert advisor or something along those lines. Regardless of what they have, they will almost always have something else that you can take advantage of if you want. 
How Reliable Are They?
As a rule, they are fairly reliable. They are not on the same level as if you are looking at a trading platform from a real FOREX broker, however, they are pretty good overall. They are usually feeds from a FOREX broker anyway, so they stay with the market pretty well. There might be a slight lag between what the market actually is and what is represented on these free charts. However, most of the time, they are a pretty good indication of the market. 
How They Can Help
The main way that they can help you is to give you access to the market when you do not have another way to access it. For example, let's say that you are a FOREX trader and you trade from your home computer. You have a desktop trading station that is a piece of software that you download. When you are at home, you can just pull up your trading platform and look at the charts as you want to. However, if you are away from your computer, you might still want to look at the charts and see what the market is doing. 
Let's say that you are a long-term trader and you opened a trade first thing in the morning. Many long-term trades take several days to play out. Therefore, you know at what price you opened the trade and which direction you want the market to go. Then you have to leave the house and you are away from the computer. You could get on another computer and pull up free FOREX charts to see how your trade is doing. 
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Monday, February 1, 2016

Dealing with the FOREX can be Devastating to the Unprepared

Dealing with the FOREX can be Devastating to the Unprepared
In the world of FOREX, dealing with losses can be quick and devastating. Although the opportunity for reward is there, there is also a huge opportunity for losses as well. At any given moment, the market could swing and leave your account showing a zero balance. If you are not properly prepared for the market and how it operates, you could find yourself in deep trouble. 
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High Leverage
The unique thing about the FOREX market is the high amount of leverage that every trader uses on a regular basis. Some common examples of leverage on a FOREX account are 100:1 and 200:1. This means that for every dollar in your account that you trade with, you are actually controlling $200. A currency pair only moves a small amount each day. Therefore, you are betting on these small moves in the prices of the currency to bring you large returns with leverage. Only a small movement in the currency pair can provide you with a large return. However, a small move in the wrong direction can actually hurt you. 
Fast Movement
When you deal in the FOREX market, you have to be prepared to make quick decisions. The market at seconds speed and if you want to succeed, you have to get used to the pace. You could potentially place an order and it has moved hundreds of pips within a few minutes. This does not happen all the time, but it does happen from time to time. If you do not take the proper precautions before you place a trade, it could end up costing you a lot of money. 
Stop Losses
Stop losses are a tool that you can use to help protect your account. When you place a trade, you should get in the habit of placing a stop loss on it. When you place a stop loss, the broker will close out your trade when it gets to that specified point. When you open the trade, you will place the stop loss at a certain point below where you got into the market at. As the trade moves, you can move the stop loss up or down to preserve some of your profits. This is really the only way to protect your account while a trade is open. 
Proper Education
When you get involved in the FOREX market, you need to make sure that you take the time to properly educate yourself. The FOREX market is very complex and requires a lot of knowledge and a large influx of information. If you just jump into the market, you could potentially lose a lot of money along the way. Many traders will blow out their entire account with only a few  trades because it is difficult to grasp quickly. You should not trade with money that you can not afford to lose completely. Also, there are accounts that you can establish to practice first. You should practice your trades extensively before investing your own money to avoid losses.
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