Category Archives: Forex Trading Articles

Forex Trading Articles

Fx Trading Hours – Three Advantages Of Forex Trading Hours

Forex trading hours give investors three wonderful advantages. These investors can work any time from Sunday afternoon through Friday afternoon. Because the market is always open somewhere, the market instantly reacts to worldwide events 24 hours a day. Best of all, investors make money while they are sleeping. Successful investors understand what Forex is and how it works.

As the largest financial market in the world, Forex trading, which is short for foreign exchange trading, cannot be manipulated by any one country or industry. Every trading day between 1 billion and 1 1/2 billion dollars is exchanged in this active marketplace. The commodities are the values of different countries money and are traded in pairs. The seven most popular currency pairs are Euro/US dollar, US dollars/Japanese yen, Great Britain Pound/US dollar, US dollar/Swiss franc, Australian dollar/US dollar, US dollars/Canadian dollar and New Zealand dollars/US dollar. Currency investing is simple; good news for one country is usually bad news for another. When the price of oil rises, oil-producing countries make more money causing their currency to be worth more.

Investors can work any time with the expanded Forex trading hours. Part-time traders working around a full-time job enjoy the flexibility and freedom. For example, the Australian market opens at 5 PM Eastern Standard Time, followed by Tokyo at 7 PM, Singapore/Hong Kong at 9 PM, Frankfurt at 2 AM and London at 3 AM. New York City, of course, opens at 8 AM and closes at 5 PM.

No matter what happens in the world, the market is ready to react. If war erupts in an oil-producing country, all of the countries affected have changes in the value of their money. Good economic news in the United States increases the value of the US dollar while higher than expected unemployment claims reduces this commodity.

The most exciting advantage to Forex trading hours is investors can make money while they sleep. Because the market is actively trading around the clock, the value of the currency pair changes from minute to minute. Investors able to correctly forecast the value of money reap great rewards as the market rolls from one time frame to another without shutting down.

As Forex trading hours allow people to choose when they work, they can work any time from Sunday afternoon until Friday afternoon. Because the market does not close during this time, this marketplace responds quickly to anything that happens. Finally, investors make money while they sleep.

Forex Trading Articles

How Profits Are Earned In The Forex

Not having the right risk management skills might make you lose in the trading industry. Profits from the forex can be big but it can also involve a lot of risks. More than 90 per cent of novice forex traders are said to lose money, usually because they are ill prepared for the challenges of trading currencies.

The leverage offered to traders will determine how much they earn or lose. The amount of returns the clients will be having will depend on where the money will be invested by the broker. Most traders get left behind due the fast pace currency movement. These days it is normal that the market move about 100 pips in a few minutes.

For those with limited capital to invest in the first place, rapid swings can present a serious problem. Forex trading platforms will often automatically close a position that moves into a loss that can’t be covered by the funds in a trader’s account, crystallizing those losses even if markets start to move back in a trader’s favor. Still, it is possible to eliminate the very real risk of being wiped out by following several tried and tested techniques for moving the odds in your favor.

Firstly what you need to do is obvious. When it comes to the Trading spot forex, it can be hard to learn it. With understanding the technicalities of how the market works and how to trade in currencies, you’ll need to understand how to reach a trading decision, be it based on technical or fundamental analysis, and develop a trading strategy that suits your style.

So, regardless of whether you use charts or economic data to inspire your trades, you will need to make sure you keep yourself informed of the latest market developments. Always note that in forex trading learning is always happening. If you want to get a feel for what forex trading is like, you can get cracking straight away using one of the currency trading simulators that many brokers now offer. This system will help you with seeing what trading techniques and strategies will suit you, and make mistakes without risking any of your own cash, until you feel that you’ve come up with a system that will allow you to win more than you lose.

Losing money is always something that goes on in the market. It is important that traders know how to look forward and respond to this types of occurrences. It is important that you still keep an open mind when you experience losses.

People can get emotional when it comes to losses and this can affect them negatively. Fast moving markets can create the fear that you’re missing out. One should keep in mind that the market will have its time to offer positive results so it will just be a matter of time.

Your emotions should also be normal when you win big. Greedy traders will quickly lose what they have won. Forex trading and any investment really involves Psychology.

Before a person can truly trade in the forex, they should always gain more knowledge about it. Managing your finances will help you lessen the chances of risk. See to it that your account has the necessary finances for trading.

Forex Trading Articles

You Too Can Make Big Profits in Forex Trading

Currencies are traded in the Forex market relative to other countries currencies. This unique interaction results in currency being exchanged in pairs. For example, the Euro can be traded against the Dollar. Therefore you can buy a currency pair of EUR/USD (more on that later), which represents how many US Dollars one Euro is worth. Forex markets do not have a physical site, meaning there isn’t a big building on Wall Street where a bunch of people yell and waive dollar bills in an attempt to get other people to buy them. Instead, the Forex Market is considered an Over-the-Counter (OTC) market as it is run entirely through a continuous network of banks and brokers. This does not mean you purchase currency at your local drugstore, it just means that there isn’t a centralized location for exchange like many of the famous commodities markets.

The basic goal of Forex trading is to swap one currency for another currency then cross your fingers and hope the currency you bought will increase in value relative to the one you sold. Then once it increases in value you sell it back in order to receive more of your original currency in exchange.

The Forex markets involve a web of currencies from around the world, and currencies fluctuate in value frequently. A Forex trader will try to make a profit in the foreign exchange market by taking advantage of these market movements.

There are hundreds of currencies throughout the world (most of which are tradable) but there are several key currencies which account for the majority of Forex volume. The most popular currencies are referred to as the major currencies. The majors are as follows:

* Dollar (USD) – United States
* Euro (EUR) – European Union Members
* Yen (JPY) – Japan
* Pound (GBP) – Great Britain
* Franc (CHF) – Switzerland
* Dollar (CAD) – Canada
* Dollar (AUD) – Australia
* Dollar (NZD) – New Zealand

Types of Forex Markets

There are three potential markets for a Forex investor to Trade currency. These markets are: the spot market, the forward market, and the futures market. The spot market is currently the largest market for exchange, however in the past the futures market was popular since investors could hold currency for long periods of time.
The spot market is where currencies are bought and sold according to their current price. A particular currency is exchanged for another currency based on the currently agreed upon exchange rate. These exchanges are typically facilitated by either a broker or a bank.
In the futures market, contracts are bought and sold based upon a standard size and settlement date on public commodities markets. Investors agree to buy or sell a fixed amount of a specific currency at a fixed exchange rate on a fixed date in the future.

Forwards markets are similar to futures markets; however the terms of a contract between two parties are determined by solely by the parties involved and don’t have to be based on a public commodities market.
Forwards and futures markets are often used to hedge against trades made in the spot market. Some investors will specialize in one type of market while others will try and use all of them to their advantage.

Forex trading is an exciting and fast-growing marketplace. Exciting opportunities exist as Forex trading continues to evolve and grow.

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Forex Trading Articles

Swing Trading Strategies – How You Use It

A swing trader usually has his trades open from days to weeks. Keeping a position open for that long can be quite risky, especially in forex market where the market movement is really volatile, thus you’ll need solid swing trading strategies. These strategies can be applied by all traders, but it’ll be easier if they match your trading style.

Identifying the Trend

The purpose of swing trading is entering trades in the direction of the major trend. Thus, identifying the trend is an extremely essential initial step to master for a swing trader. The sooner you can identify the trend, the higher your chance to get massive profits.

The problem is aside from identifying a trend, you have to be able to avoid whipsaw (a condition where a sharp price movement is quickly followed by sharp reversal) too. It can be misleading and looked just like the market is trending, so make sure you can avoid it. These are several common methods to discover trends:

– Making use of indicators: probably the most widely used indicators are Moving Averages and Relative Strength Index.
– Price Action Trend
– Pivot Point Trend
I recommend using 15 minutes and 4 hours charts for this.

Look Forward To Pullback

As soon as you identify the main trend, don’t rush and place your order. Wait for some kind of pullback first to get a good entry point. By waiting for a good price level before truly entering the market, you’ll enter at a great price and have much better opportunity to score winning trades.

Stop Loss Order

Every good trader implements strict risk management and stop loss is one of it. For stop loss, just use the latest swing high or swing low. Make sure you place your fund in a trusted broker that won’t ignore your stop loss.

Exit Point

The easiest way is to shoot for exactly the same quantity of the pips you are risking. Illustration: if your stop loss is twenty pips below your entry point, then just set 20 pips above your entry point as the exit point (take profit order). Needless to say, it’s possible to aim higher than the amount of pips you risk; it’s completely up to you.

This is just one example as there are a lot of swing trading strategies out there. A few of them may need you to learn more advanced strategies or making use of more sophisticated software; nonetheless, if you’re still learning, it is advisable to stick to one currency pair and get used to it. Also, know the best time to trade for that specific currency pair.

There are hundreds of strategies variation for swing trading, but the fundamental is the same: finding a trend and ride on it to get as much profit as you can. Just like that. People just discover a lot of different way to do that, so just go with one that suits you the best.

Forex Trading Articles

Forex Trading Swinging in a Toddle

There are situations, which has the potential to act in a very short span of time and in such cases the trader need to take quick steps. This kind of trading is used at home and by the day traders.

The big trading institutions make big trades and they put big amount of capital in and out of the market whenever they feel better and find the best opportunity to fetch the returns in big proportion.

The individual trader trade with short-term trading plans and does not have to face any competition from the major traders.

The traders who use swing trading for making trading positions do lot of technical analysis of the market trends and have an insight into the short-term price fluctuations.

The swing traders are not interested in the value of currency pairs but are more concerned about the price actions and the trading chart patterns.

If you are finding ways to make triple gains at the trading platform in just thirty-minutes trade than don’t go anywhere just move on to swing trading.

In order to understand the concept of swing trading let’s take an advantage of swing trade in an upturn moving trend to put before you the complete image of the Forex trade.

The prices of the currencies are very volatile and sudden gush in the trends take place and the upward trending price movement occurs.

This is the time to find out the short swing trading point and find the closer resistance level at the chart pattern. Next move in this regard is to check the price thrust at the trading chart and locate the peak point of the price movement.

For inculcating, the price actions traders need some indicators to determine the trading rapidity and the pace with which the price moves. It’s the time to wait for the point where the price moves down and you can go short at the trading.

The indicators that you can use to identify and study the trading patterns comprise RSI and Stochastic indicators or combination of both can be a good idea to implement for analyzing the trade.

The trick that can prove to be very effective in swing trading stage refer to as place your position and pull the trading move at the appropriate moment.