Forex Trading
What is Forex and why should I get involved?
Forex, is the international exchange market where currencies are bought and sold. Unlike the stock exchange, Forex trades 24 hours a day from 5:00 p.m. ET Sunday until 4:00 p.m. ET Friday. Also, there is no central hub like the New York Stock Exchange or Nasdaq. In its place, trade is carried out between investors through electronic communication networks (ECNs) and phone networks in various markets around the world.
So, when you learn that the US dollar has “closed” at a certain value, it simply means that was the rate when the market closed in New York. However, currency will continue to be traded in other countries long after New York is close.
Why Trade Forex?
- Forex is the world’s largest market. No one can corner the market. It has a trading volume of around $3.2 trillion dollars a day (Bank for International Settlements April 2007), no single entity can control the market for an extended period of time.
- You can make money when the market is going up or down.
- Forex markets trade 24 hours a day. There is no waiting for the opening bell. Technical analysis works very well and the market trends well. Forex offers up to 100:1 leverage but it is wise to avoid very high leverage if you can afford it. Stocks offer 1:1 or 2:1. Futures offer 15:1 leverage. The Forex market is the most liquid in the world. Traders can almost always open or close a position at a fair price.
- You can make money working only a few hours a day or week on your computer.
- You can trade from anywhere in the world where there is an internet connection.
- You can gain experience without risking your own money by using a free demo account. When trading stocks, there are over 40,000 stocks to choose from. In Forex, you can choose one or two currency pairs and focus your analysis.
Are you considering some trade in the Foreign Exchange Markets, but the process seems a bit too foreign to you? Fear not, as there are many online resources that will help newcomers. You should start with the following:
Free Email Course on Forex – The Automatic Forex Trading System.
Free Demo account to get the hang of things. Trade for Free on a Practice Account for at least one month, Highly Recommended.
Forex Glossary – You will need to understand the Forex lingo in order to start trading wisely.
School of Pipsology – Learn all about Forex trading with this online tutorial.
National Futures Association (NFA) – The NFA describes itself as “the premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the derivatives markets.” Their site will provide advice and news on Forex trading.
GoCurrency – You will need to have access to a free, accurate currency converter and this one is highly recommended.
The Forex Project – Learn about Forex trading from someone who has lived it. This site features many helpful articles for both newcomers and seasoned traders.
Forex Factory Forum – Speak directly with other traders on this free message board.
Forex Charting 101 – You will need to understand and use charts when you become a Forex trader. Some charts are easier to comprehend than others, but this guide will get you started.
Free Forex Charts – Need some charts to get yourself started? There are many free ones available here, as well as tips and tricks on how to use them.
Live Forex Rates – Watch the currency rates change before your very eyes on this site.
Earn Forex- This is a directory of Forex sites, just in case you need more information than the above sites gave you.
With the help of the sites above, there is no reason why you can’t get into the Forex market and start making money today.
Watch this video that describes Forex Trading in very simple terms:
Automated Trading System
The FOREX market can be a very dangerous to your hard earned savings if you don’t know what you are doing. Just ask the 95% percent of the people who lose money trading the FOREX market. There is a huge learning curve and it can take several years and thousands of dollars in losses (unless you are only trading a demo account) before a trader may start to see a profit.
With the onset of the computer age and sophisticated trading software, novice traders can drastically shorten the time it takes to profit from FOREX trading. One great way to do this is by using a FOREX trading robot. A good choice is Forex Robot Trader. It is not very expensive and is rated the highest in returns and consistency.
A FOREX trading robot is a completely automated currency trading system which identifies trends in the market and make trades for you automatically. The better FOREX trading robots will be able to maximize profits for you by picking entry/exit points based on sophisticated algorithms. Some come complete with money management tools that will compound your account automatically for you while minimizing risk.
What should you look for if you are interested in purchasing a FOREX trading robot?
1. Make sure the product has been created and tested by an experienced currency trader. Seek qualifications, testimonials and proof that the creator of it actually knows what they are doing.
2. Make sure the product does what it says it does. If the seller claims the Robot averages 10 to 30% per month in profit, look at actual trades the FOREX trading robot has made over a several month period. The proof is in the pudding.
3. Make sure it is already set-up with the best out-of-box settings. There is no sense in using a FOREX trading robot if you can’t figure out how to use it.
4. Don’t rely on just a back test since it is far more important to see actual forward trading results. If you do see a back test make sure the modeling quality is at least 90% accurate or the back test is meaningless.
5. Demo Account. Ideally the FOREX trading robot should have the ability to create a demo account, so you can test the capabilities of the product without risking any of your own capital. Demo accounts are an ideal starting place for beginner’s to foreign currency trading to gain a feel for the FOREX marketplace.
So, if you are interested in making money in the FOREX market, but don’t have the time to really learn it’s in and outs, a FOREX trading robot may be right for you.
