THE EASY WAYS TO FOREX

What are the easiest ways to trade FOREX?
Where should I start digging up?

The easiest way known to me is: "Monkey see, monkey do".
If you want - walk away from the screen so you can see a general slope or a move-up in the market.

Yeah, you may laugh about walking away, but this is a very efficient trick. It prevents your eyes from seeing the individual candles and thus opens your mind to get the whole pic of the price direction.

Now, that you come closer to the screen again, simply open your order in the direction you've identified from the distance.

That's it. The mighty simplest Forex trading!

LEVERAGE: THE DOUBLE EDGED SWORD

Fully understand that leverage–that is, trading on margin–will work for you when you are making a profit, but will also work against you when you predict a market move incorrectly. It is key for a trader to understand the difference between the required margin and the trade size. A margin requirement of $1,000 might actually mean a trade size of $100,000. This means that a 2% movement in the price of the instrument is actually a 2% move on $100,000, rather than $1,000.

THE RULES OF THE GAME, OR, TERMS OF BUSINESS

Also worth mentioning is the fact that different brokers have different trading rules, or “Terms of Business.” Take time to read these, and truly understand them, before making any decisions on using one broker over another. Easier said than done, we know. However, ignorance is rarely a defense. It is pointless to read your new broker’s Terms of Business when the inevitable trade query appears, as they so often do, so be proactive and grab yourself a big cup of coffee, a red pen and hide yourself away from distraction and get reading (and, no, in bed before you fall asleep does not count­–treat it as you would any important business document).

GLOBAL ECONOMIC CALENDARS AND THE PENNIES IN YOUR ACCOUNT

Many governmental and economic bodies around the world publish various economic indicators. Be aware of these; such indicators are closely monitored almost all professional traders worldwide. Why? Well, with currency markets reflecting the relative performances of the national economies of the world, such indicators can significantly impact the value of a currency, often within seconds of the announcement of the indicator.

Failure to pay attention to upcoming announcements have led many novice and unprepared traders to wake to see their trading accounts in significantly different states from the prior trading session.

WHEN YOUR WRONG, YOUR WRONG AND WHEN YOUR RIGHT, YOUR RIGHT!

Learn to be disciplined when trading, but take action when appropriate. If a trade that you have placed is clearly going against you, uncross your fingers, and get out of the position rather than praying that it comes back in your favor–as the saying goes, it’s never too late to turn back on a wrong road. Likewise, when your position is making money, hesitate before jumping out to take a quick profit. Consider using a Trailing Stop Loss to lock in gains as your position moves further into profit territory

KNOWING WHAT YOU DON’T KNOW ABOUT FOREX^^

That headline may sound like a strange way to start a tutorial, but when it comes to something as complex as trading, it is important to acknowledge the preconceived notions you may have about trading and to understand that you probably have much to learn about this complex subject, especially if you intend to master what could be the most difficult undertaking you will ever attempt.

First and foremost, despite what you may have heard or read about trading being an easy, get-rich-quick scheme, the truth is that there are no trading secrets and no easy paths to quick success in trading markets. Beware of anyone who tries to tell (or sell) you such. Its no coincidence that trading markets is similar to most other human endeavors: Hard work and experience are required to achieve notable success. By the same token, understanding the process of trading can be achieved with perseverance and a willingness to continue to learn.

Ironically, a major advantage of being an experienced trader is knowing what you dont know about markets and trading. There are certain elements of trading that you may never know nor understand, like knowing for sure what a market is going to do in the future. Market analysis and trading is not a business of bold predictions but one of exploring market probabilities based upon market knowledge, price history, human behavior and trading experience.

Knowing that you don’t know

exactly what a market will do actually gives you a trading edge because it means you probably will exercise more caution and think about and plan for what could happen if a trade turns against you. Successful traders know that some trades will turn against them and that they need to take steps to preserve capital to trade another day.

Anyone who plans to trade for a while absolutely must respect the markets. Most people do not like to be wrong but only the market is 100 percent right. Traders who think they know exactly what a market will do are not showing the markets respect.

WHY DO YOU TRADE?

You may be comfortable accepting the fact that you don’t know everything there is to know about trading yet, but you definitely should have a good idea about several things when you get into trading. The first is why you want to trade in the first place. People have a number of motives for trading, all of which have merit, but you should be clear what it is that is driving you into trading. Your reasons for trading may go a long way in determining your trading style.

Profits

Probably every trader’s goal is to make money. But if that is your main reason for trading, are you willing to do what it takes to achieve this goal? It will mean you have to provide the seed money and other resources you need to be successful, and it will involve a commitment to learning to gain trading experience.

If trading is going to be your business, you obviously have to put making money high on your list of goals. That requires consistent, strong discipline and the ability to control your emotions as none of the experience or success you have gained in other areas will guarantee that you will be a success in trading. Your trading approach may even be boring, but if your real goal is making money, you will have to have the discipline to stick with a trading plan.

Being ‘right’

Are you a person whose greatest satisfaction comes from being right about

things? Traders generally love to compete and be better than everyone else in whatever they do. Just having the opportunity to crow a little about their prowess is their biggest reward.

However, trading may be one of the worst places to look to feed an ego. Whatever success you have had in other aspects of your life may not transfer very well to the trading arena, which has been known to humble even the strongest ego. Of course, traders have to have a strong sense of ego to have enough confidence to trade, but you’ll have to keep that ego in check whenever you enter a market position if you want to survive as a trader.

Excitement

Trading certainly can provide plenty of excitement, both highs and lows, and that may be reason enough for trading. But expect to pay an entertainment tax. Just being in a market position can be exhilarating and can inspire you to keep up with what’s happening in the market and in the world’s news events.

However, to be successful over a longer term – unless you have deep pockets – you usually will have to forego the excitement and emotion generated by trading, just as you have to keep a lid on your ego trip. You naturally will experience some excitement whenever you are trading, but it is a factor you must control. If excitement is an objective of trading for you, perhaps the solution is to have one account you trade conservatively and another account where you get a little wilder.

ARE YOU READY FOR FOREX RESOURCES?

In addition to your goals for trading, you also should be well aware of the resources you bring to the trading table. They will play a big part in the markets you can trade and in the way you trade them. If you think you can be a big-time bond trader with a $5,000 account or a day-trader while working a full-time job, you’ll soon get a dose of reality when it comes to trading.

Here are some resources you have to consider as you ponder what and how to trade:

Money

There’s that word again, but the fact of the matter is that you can’t trade without sufficient capital – your trading stake that you need to guard carefully. You may be able to begin trading without having enough time or knowledge, but you won’t be able to begin trading without money. You have to have money to make money.

Your trading account will have to meet minimum requirements set forth by the trading industry. How much money you need depends on what you intend to trade. If you are buying stocks, you have to have at least half of the purchase amount in your account. If you are trading futures, you usually have to have a minimum of about 3 percent to 7 percent of the value of the contract in your account.

Those are the regulatory requirements, and there is no negotiating the amount. If you plan to trade the full-size S&P 500 Index futures contract, for

example, you have to have about $20,000 in your account for each contract. If you are trading the e-mini version of the S&P 500, the requirement is about $4,000. The key point is that the amount of money required to trade limits what you can trade and the number of contracts you can hold.

In addition to the minimum regulatory requirements, you should also have a cushion above that to withstand the fluctuations of the marketplace. That suggests you should always have enough extra cash in your account to cover possible worst-case scenarios. At any one time, you may not want to have more than 50 percent of your account tied up in active positions.

If you are not adequately capitalized and the market makes even a slight adverse price move, you may either be forced to put up more money to hold your position or you may be forced out of the market. Having extra money in the account also relieves the pressure of having to be right about your position from the start, pressure that is not conducive to making wise trading decisions.

You also do not want to have the pressure of having the funds for trading come from money you need to pay the rent or buy groceries or from funding the account with your credit card. Your trading money should come from discretionary funds that you can afford to lose without affecting your lifestyle.

Time

Everyone has 60 minutes in an hour and 24 hours a day, but how much of your time can you devote to market analysis and trading? If you have a full-time job, it will be difficult to be a day-trader, no matter how well you think you might do with that style of trading.

The priority you place on the use of your time will play a big role in selecting the type of trading resources you need and the style of trading you can do. Time may be an important trading constraint for you.

Trading Help

*Electronic connection. Today’s active trader almost needs to have a connection to the internet, both to have access to information resources quickly and easily and to enter orders.

*Data/price quotes. Today’s active traders also need real-time quotes as well as access to historical market data for their analysis. Brokers may provide sufficient data, but many traders want to subscribe to a source that will provide the most accurate, reliable data possible.

*Analytical software. Another requirement for many active traders is software that can turn data into charts and technical indicators deemed necessary to analyze markets. All you need to do is specify the type of software you want, and some vendor is likely to have it.

*Advisory services. In general, it’s probably advisable to do your own research, but your lack of time or knowledge may limit what you can do, causing you to turn to other more expert sources for information, analysis and perhaps trading recommendations.

DEVELOPING A TRADING MENTALITY

Much has been written about what type of personality it takes to be a successful trader. What makes this question particularly difficult is that there is no definitive answer about the characteristics a trader should have to be successful. If you assess your personal traits honestly and realistically, you can probably develop a trading program that fits your personality more easily than you can adapt your personality to a particular trading program.

But what provides a common thread among many successful traders is that they all have a trading mentality. That doesn’t mean just shifting from the traditional buy-and-hold mindset of the past to jumping into and out of positions readily, however. That is part of it, but a trading mentality includes several other factors related to attitude that may be somewhat different from what you have heard and believed in the past.

Speculation Is Okay

You may have heard complaints about how speculators are to blame for all kinds of price distortions and how they manipulate prices, even when they are responding to perceptions of supply and demand. None of today’s economic developments or technological advances would have been possible without speculation. No one would have started a company without speculation. Speculation is simply a part of growth.

“Speculating” is not the same as “gambling.” Speculating can turn into a crapshoot, but successful speculating means two things: You always limit your risk, and you always try to have favorable probabilities.

Gambling creates risk. A bet in a casino or at a racetrack creates a risk to your money that did not exist before.

In trading (speculating), the risk already exists. Someone is carrying that risk, and a trader/speculator is willing to assume the risk that someone else wants to pass along because they do not want it. Trading is all about transferring risk from those who want to insulate themselves from adverse price moves to those who are willing to take on the risk in exchange for the possibility of profiting from a price move that would be favorable to them.

Speculators play a vital role in this process by always being available to take the other side of these trades and providing liquidity to the marketplace to make prices flow efficiently. Without speculators, prices for many stocks and products would be much more erratic and uncertain and potentially much more detrimental to the development of a sound economy. Trading allows both producers/consumers and speculators and to achieve their goals. As a trader, you are “speculating” on what will happen, not “gambling.”

Losing Is Okay

Nobody likes a “loser,” especially if it means money, but in trading you can be a winner by liking to take losses. You expect all of your trades to work or you wouldn’t have taken them. But because of the uncertainties of the marketplace, the reality is that many successful traders have built outstanding track records with only 40% or fewer winning trades.

One of the most important market adages is, “Cut your losses short.” When the market tells you that you are wrong, get out of your losing position quickly so the loss doesn’t grow and wipe out your trading stake, the key to staying in the trading game. If your analysis was wrong, the sooner you find out, the better off you usually are.

The Market Is Not ‘Against’ You

You may not believe this when the market seems to be gunning for your stops or reaching a certain price level just to take your money. The market does try to confuse most participants most of the time, but don’t take it personally if you are the victim of an adverse price move. The market is not out to “get” you but is just flowing along, and your position just happens to be carried along with it.

It’s okay To Sell What You Don’t Own

Many newcomers to trading have a difficult time comprehending this fact. That’s understandable if your experience has been limited to buying stocks, but with trading instruments such as futures or options, it is as easy to sell as it is to buy. In fact, selling means no difference in the amount of money required or in the trading procedure other than saying “Sell” instead of “Buy.” So you can “Sell high, buy low,” even if you have never bought the instrument in the first place.

It’s Okay To Be A ‘Bear’

Generally, a market that is going up or is “bullish” is perceived as “good,” and a market that is going down or is “bearish” is called “bad.” But, as the previous item about going short suggests, being a bear and watching prices decline may be a good thing for your account. In reality, you should always have a two-sided view, neither bullish nor bearish but reacting to what you see the market doing. When you see an opportunity arise, being a bear or shorting the market works no differently than being long or bullish.

It’s Okay To Be Emotional About Trading

Most advice about trading suggests taking the emotion out of trading, and it is true that you should not let emotions rule your trading decisions. But if you want to be a successful trader, you have to have a passion for trading – a passion that will push you to learn about the markets and trading, force you to study price action to become a well-versed expert in whatever method you choose and give you the desire to stick with trading when things may not be going so well. Passion drives people in many successful endeavors, and trading is no exception

THE LANGUAGE OF FOREX TRADING

As with many other fields, traders have their own arcane terms and phrases to describe various conditions. Trading newcomers may be frustrated by a lingo they do not understand and which seems to make no sense at all.

A glossary of terms on this site provides the meaning of many words used by traders, but here are some of the more widely used trading terms and their explanations so you won’t be confused when you see or hear them used to describe some basic trading concepts.

“Dead-cat bounce.” Many times a market will experience a modest rally (a bounce) from depressed price levels. But most of this price rise is due to short-covering or weak long positions getting back into a market that very likely will exert little or no upside power.

“The trend is your friend.” This simple sentence is a very powerful one and is important for most traders. If you trade with the market’s trend, your odds for success are higher than if you trade against the trend. Most successful traders employ some type of trend-following trading strategy.

“Buy the rumor, sell the fact.” This is a frequently occurring phenomenon whereby a market makes a price move in anticipation of an expected result of a fundamental event. Then, when the event does actually occur and the result was as expected by traders, the market price will move

TOP 10 MYTHS ABOUT FOREX ?

Forex is a market where exchange of one currency with another currency takes place. It’s the market which provides accessibility and liquidity to the traders to buy and sell one foreign currency in exchange of another.

Forex traders seek profit in buying currencies low and selling them high. This kind of trading became more popular with the widespread of the on-line Forex brokers. There is a lot of information available about Forex on the web. However there also many myths surrounding the foreign exchange market:

Forex trading is easy. Many people that want to dive into the world of the foreign exchange market believe that the Forex trading is easy — you just read a book or two and then you will be able to earn daily profits with just 2-3 hours trading daily. Others think that they can buy a profitable strategy and it will make them rich in Forex. In reality that’s just a myth. Succeeding in Forex isn’t easier than mastering any other profession — it takes time, money and a lot of practice.

"I will make money in Forex, if I can trade stocks successfully." Success in stock market doesn’t imply that you will get success in Forex market — there are many differences between trading stocks and the spot currencies. First of all, Forex market requires a lot of hard work and dedication as this market is open for 24 hours a day. You cannot just sit in front of your computer for the whole day and night, so the best way is that you should find the most suitable time periods for trading. Second, “buy&hold„ strategy simply won’t work in Forex market. Third, you don’t have that much information about currencies as you can get from the companies’ reports and statistics.

"I can make profit whenever I want if Forex market is open 24 hours a day." Once again, you won’t be sitting in front of your PC for the whole day to be able to trade 24 hours. You’ll have to develop automated trading software to get the advantage of 24 hours a day working schedule.

"I can be a successful Forex trader just following someone else’s signals." Many beginning traders get burned by the blind signal-following. That’s like putting away the whole responsibility for your actions to someone else. That may sound cool, but in reality you end up with the huge losses. Learn to rely on your own knowledge and skills. Remember that there were no great signal-followers in any financial market.

No commission is to be paid in Forex market. You only have to pay the spread, but you don’t have to pay the commission. And what’s spread? It is the difference between the buy and sell price of the currency pair at the same moment. You may end up with the major part of your profits in the broker’s hands if you plan to rely on the short-term trading.

Forex is a scam. Some skeptics and disappointed traders think that Forex is just some new fad to scam people for their hard earned money. Although there are many scams that are hiding behind the "brand" of Forex, that doesn’t mean that the Forex itself is a scam. There are many institutional Forex brokers, regulated Forex account managers and other solid companies in the market to whom you can trust.

"I need to exactly predict the market outcome to be profitable in Forex." There is no scientific method to know something in advance in the market with a 100% certainty. There would be no Forex market if you could know the exact currency rates beforehand. Trading is not the game of certainties; it’s a game of odds. One of the first things that new traders learn is to think in the terms of probabilities and risk-to-reward ratios.

"I need to use a very complex strategy to be successful in Forex." It’s a popular myth, in which many on-line sellers would want you to believe. The main requirement to be successful in Forex is a self-discipline and money management. There are many traders that make consistent profits with rather simple and old strategies.

"I need to have a lot of starting capital to get profit in Forex." Big capital investment won’t help you in Forex. You don’t need a lot of money to diversify in currencies and you can’t move the currency rates with your trading orders (you’d need billions of dollars to do that). Actually you can trade with a very a little capital, because Forex trading is almost always leveraged with the broker’s money.

Forex is gambling because it’s completely random. Although there is no certainty in Forex (as in any financial market) it doesn’t mean that it’s completely random. And it’s certainly not a gambling, since your success in this market depends mostly on your skills and experience, not on your luck.

Knowledge is power — so it’s better for you to learn distinguishing some stereotypical myths from the real thing. Don’t fall for the promises of getting some easy profits in Forex, but don’t be afraid of the market just because some people think it’s not possible to earn there. Be rational — this quality will help you either if you are going to trade in Forex or not.

WHAT IS FOREX?

The term “FOREX” stands for Foreign Exchange

FOREX (or FX as a short abbreviation) is a global currency exchange market where foreign currencies from all over the world are bought and sold for profit.

Forex is the largest and most liquid market in the world

Forex is the largest and most liquid market in the world where around three trillion dollars exchange take place every day. That’s an enormous money flow. No stock market exchange in the world come close to these numbers.

Currencies in the Forex market are traded 24 hours a day 7 days a week. Market literally follows the sun around the world. Trading moves from major banking centers of the United States to Australia and New Zealand, then to the Far East, gets to Europe and finally returns back to the States.

Trading Forex is all about exchanging currencies

Trading on Foreign exchange market simply means buying of one currency and selling another at the same time. In other words, the currency of one country is exchanged for currency of another country at the current exchange rates.

Foreign currencies are always traded in pairs - EUR/USD, GBP/USD, EUR/JPY etc. Around 70% of all transactions made with major currencies like U.S. dollar, Australian Dollar, British Pound, Swiss Franc and Japanese Yen.

Nowadays Forex is available to small investors

While in the past Forex market was not available to small investors (individuals) due to large minimum transaction sizes, today Forex brokers are able to break those large sizes into a smaller unit lots and thus offer small investors an opportunity to buy or sell currencies side by side with regular core Forex market investors such as large banks, central banks, multinational corporations and other financial markets and institutions.

Being incompetent in Forex can be expensive

Forex market is huge and plunging into trading without knowing its rules will be equal to swimming in the pool with ocean sharks. The dominant investors like banks and governments have a power to influence market moves and currencies exchange rates. For inexperienced traders investing own money in such game is as risky and uncertain as gambling. It could turn into a million fortune only in a couple of weeks or become a disaster for those who was ignorant in learning.

Forex brokers offer very big leverage to individual investors. A trader can trade at huge leverage as much as 300 to 1, meaning that for every dollar trader puts in for trading he can trade 300. For example, having an account equal to $1,000 trader can trade as much as $300,000.
It is a huge opportunity, but it also is very dangerous. No experienced trader would trade with such big leverage unless they have really strong argument for a particular trade, and even after that it is an enormous risk.

Is trading Forex profitable?

Trading in the Forex market is profitable, but only for 5% out of all beginner traders who start trading Forex. New traders need to learn the basics of trading well, and practice a lot on demo accounts before going real.

Like in every business, when trading money in Forex, trader gets paid depending on his knowledge and trading experience.

Learn and achieve your goals with Forex!