Understand the Risks For a Money Making Second Income

Forex Trading - Understand the Risks For a Money Making Second Income

What is The Foreign Exchange trades market (also known by the acronym FOREX) is sometimes called the Spot market. Every day the value of trades made on Forex is anything up to $2 trillion. There are no physical goods or stocks traded in Forex: the currency is, quite simply, hard cash money.

Traders in the Forex market buying one currency at the same time as they are selling another, using a Forex broker to make the trade. This paired form of trading means you might be selling US Dollars (USD) at the same time as you are buying GB Pounds (GBP). The trading of currencies is a barometer of current confidence in a country and its economic prospects. The strength of one currency is a demonstration of its position against other competing nations' economies.

Newcomers to Forex might want to know where the hub of the market is situated: the answer is - it has no physical location. The Trading in the Forex market operates electronically through the Interbank network. Unlike other markets, there are no opening or closing prices on Forex, as the market runs 24 hours a day, from Sundays to Fridays.

It is now easy for any individual to start trading in Forex as the high entry thresholds, which served to restrict Forex trading to financial institutions, no longer apply. No longer do you need to have millions of dollars to enter this market, so individuals can start trading online from their homes.

Unlike traditional stock markets, there are no commissions payable to brokers: they receive a bid-ask payment instead. The bid-ask spread value varies: usually 0.1 per cent of much lower depending on the dealer and the lot or contract size.

Why is Forex trading becoming more popular with private investors?

Here are some of the attractions of getting involved in Forex trading:

• You pay no commissions, clearing fees, exchange fees, government fees, or brokerage commission.
• You deal direct in your chosen currency market, you cut out the middle man.
• The minimum trade is low, so it is easy to start trading in Forex.
• Transaction costs are not excessive.
• The market is open 24 hours a day between Sunday evening and Friday afternoon so you can star Forex investing even if you have a full time job.
• Traders compete on equal terms because nobody can corner this vast market.
• Huge capital reserves are not necessary, and investor can start with less than $1000.
• Your investment is instantly available so your money is not tied up if you need it.

How you can get started in Forex trading from home

All you actually need to get started is a computer with a high-speed Internet connection. Most of the reputable Forex trading sites have helpful step by step instructions to help you, and you can even start out with 'dummy' trades where you do not even risk any of your own money.

The cost of trading in Forex

You can open an account with a deposit of around $250 in your account - this is called your margin. To get a true feel of the market, it would be better to allocate around $1000 if you can afford it - remember you should only deposit this money if you are ready to risk losing it!!

How you can make money in Forex trading

The key is to buy low and sell high, of course - but easier said than done. Any currency that is fluctuating is a potential candidate for a trade, and you can profit well from a change as low as one per cent in the value of a currency.

How you can get started Have a look at any of the major Forex websites on a Business Opportunity Review website where you can check how they are rated, deposit your initial margin and you are ready to become an international Forex Trader. Think of me when you make your first million.

Automated Forex Trading Programs Review

Automated Forex Trading Programs Review

Automated Forex trading programs serve different purposes and can do very different things. I believe that trading softwares serve 3 specific functions. Choosing the best software for you depends on what you wish to get out of it. Of course, some softwares do more than one thing, but it's still important to make sure that the software you choose meets your purpose exactly.

3 Types of Automated Forex trading Programs

1. Analysis Software - This is basically an information display software with a twist. You can usually view a graph of the various currency pairs and also see different technical trading indicators on the graph itself. The Analysis Software doesn't make any trading decisions for you, but it simplifies your trading and can help you make better decisions and to make more money.
2. Pricing Software - This kind of automatic forex software doesn't do the trading for you, but it tells you what you need to do. You need to feed market information into it or allow it to take the information from the market automatically. It then supplies you with two sets of prices: Stop Loss and Take Profit. You give these prices to your broker and, hopefully, turn a profit.
3. Automatic Trading - The Automatic Trading program actually does the trading for you without you being involved. Some people don't like these softwares because they like to be in control. Others love them since they provide you with a lot of freedom and can basically trade for you in your sleep.

Whichever software you choose to get, make sure to not relinquish your forex education. It's highly important that you know the most you can about the market. The more you know the better you will work with any software you get.

Forex Education - 10 Novice Trader Mistakes That See Them Wiped Out Quickly

Forex Education - 10 Novice Trader Mistakes That See Them Wiped Out Quickly

Here as part of your forex education are 10 common reasons new traders get wiped out. Make any of these mistakes and you will lose too. So avoid these common mistakes...

1. Buying a Forex Robot With a Simulated Track Record

If you want to win ignore the vast number of forex robots - they cost very little, promise a lot and wipe you out. There gains are all simulated going backwards knowing the data and this does not help going forward!

2. Day Trading and Scalping Systems

Day trading doesn't work as all volatility is random and you can't win. If anyone shows you a track record where they have won, it's normally just a simulation. Don't fall for the hype of day trading.

This applies to both points 1 and 2, there is no expert who can give you success, as success comes from within and having confidence in what you are doing.

3. Using to Much Leverage

You can get 200 or even 400:1, in terms of leverage but to use all of this is madness on a small account. Use maybe 10 - 20:1 - that is enough for most traders.

Leverage up to much and Volatility will get you.

4. Starting with a small amount

You get traders starting with $50 - 100, this is not really an investment at these levels, it's a gamble. Look to start with $500 -1000 minimum and preferably $5,000.

5. Believing You can Trade With low Risk

If you believe many people online, you would think you can trade with the odd loss here and there - but you can't! You will face many consecutive losses and they can last for weeks on end ( this happens to the best traders ) and you need to have the confidence and discipline, to take them until you hit a home run.

6. Predicting Market tops and Bottoms

Try and predict and you are hoping and guessing and your prediction will be as accurate as your horoscope. You can't predict in advance, so don't try, trade the reality of price change only.

7. Trading News

Those stories on CNN, CNBC and on all the other news channels are great stories but that's all they are stories and opinions. They reflect the majority who lose, follow them and you will lose to.

8. Trading too Much

You understandably want to be in on the action but most traders' trade to much and end up trading all the time - this will wipe you out, so have patience.

9. Trying to be too complicated

While some traders don't do any preparation and learn the basics and lose another major set think that being complicated and putting in effort means success - it doesn't. Forex trading is simple and you need to have a simple system and the discipline to apply it and that's all.

Make a system to complicated and it will break, in the brutal world of trading.

10. Know Your Trading Edge

You need to know what your trading edge is. Specifically, the reason you will win while the vast majority 95% lose and you need to have the confidence to apply it with discipline for success. If you don't know what your edge is, you don't have one and you need to continue your forex trading education until you do.

You can win at forex trading but you need to do the basics and get a simple system with an edge you can apply for huge gains. If you do this, then currency trading success can be yours.

Forex Spot Trading A Simple Guide!

Forex Spot Trading - A Simple Guide!

What is Forex spot trading?

Spot Forex trades are very short term trades on the Forex markets. The term 'spot' is believed to come from the term 'on the spot' (abbreviated to spot) representing the time period for 'settlement' of a foreign exchange transaction, usually no more than two working days.

Forex spot trading, therefore in its simplest form is the short term, short settlement delivery of traded currencies.

Spot traders take advantage of price variations in currencies and do not generally take positions in the market longer than on a same day basis. Most spot conditions are settled within minutes of a trade. However, spot trading in its truest sense shouldn't be confused with scalping.

The method that traders use to trade the Spot currencies differ according to whether trading is done on an 'interbank' basis or whether it's done on personal account (usually leveraged trades). Interbank spot traders will set up their book to run a short or long position depending on where their intra day view of the market is and then they will trade the spreads trying to maintain that position.

What this effectively means is that the interbank dealer is making money on the buy/sell spread if he's a market maker in that currency while at the same time looking to square his/her position at the appropriate time.

However, many spot traders will trade the movements on a square book and just 'job' the currency. This is usually done when there is uncertainty in the market. The beauty of spot trading is that the trader does not get stuck in a bad trade.

Traders who trade personal account can trade spot through their Forex broker. However personal account traders can and often do hold positions for longer than a day which takes them out of the realm of spot traders as their position now becomes an open position that is usually covered by a 'forward' ( forwards will be explained later in my course). The vast majority of personal account traders will usually day trade but it is useful to be aware of the exceptions.

What currencies are spot traded?

There are 7 major currencies traded these are the USD, GBP, CHF (Swiss Franc), CAD, AUD (Australian dollar), JPY and EUR. Each currency is traded as a pair for example GBP/USD, USD/CHF, AUD/USD. The reason for this is simple - if you have JPY and you want to buy USD then you have to sell 105 JPY to get 1 USD - hence the USD/JPY (dollar yen) rate is 105.00.

I have tried to give you some basic information on the operation of the Forex markets. If you want to learn more about Forex spot trading and many more aspects of the Forex market.

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