Why You Should Trade FOREX Over Other Investments

The conventional trading was only being focus on the stocks or shares that we all well understood. Actually the Forex (foreign currency exchange) trading has more advantages compared to the old fashioned financial markets.

Forex was the backbone and only traded by the banking (who trade billions of dollars daily), governments and companies. But now Forex trading is possible to ordinary people like you and me by just open an account with the best online forex brokers around. The advantage of using online trading platform enabled electronically.  Trading is far easier and less risky than either the futures or the stock markets. Money can be made both on a rising and falling market, unlike the stock market, which relies on shares increasing in price to create profit.

You can learn Forex trading by signing up the free Forex Demo Account before going live. Many part time traders still can earn from Forex market which open 24 hours a day and keeping their day job. With the daily trading volume of 3 trillions worldwide, you can easy make some dollars out of it.
Forex market is traded globally and, unlike the stock market, which has fixed hours, it is a market that never sleeps. Somewhere in the world, at any time of day or night, Forex is open for business, six days a week. The market starts each day in Sydney and moves around the globe as other Forex financial centers open: first to Tokyo, then London and New York.

Currencies are traded in pair, for an example the Euro and the US dollar (EUR/USD). The first currency – in this case the Euro – is known as the base currency; the second currency (here, the US dollar), is the counter-currency. All trades result in the simultaneous buying of one currency and the selling of the other. Thus, in this example, if you place an order to buy the EUR/USD, you are buying the Euro and selling the US dollar. If you were to sell the pair, you would be selling the Euro and buying the US dollar. There are many other currency pairs, such as USD/JPY, GBP/USD, EUR/GBP, USD/CHF and so on.

What makes trading FOREX an incredible way to make money online, is that price movements are highly predictable, creating trends that can be anticipated when it comes to decide when to buy and sell. Contrasting with stocks and shares, FOREX trading through brokers is commission free. It is also possible – and definitely recommended – to open a demo (practice) account with a broker first, where you can learn to trade and gain experience before you part with a cent of your own money.

Winning Strategies With Forex Charts

There are two fundamental approaches for online Forex trading namely fundamental analysis and technical analysis. The fundamental Forex analysis do not rely on charts. IT merely depends on the political and economic indicators to move the prices up or down.

On the other side the technical analysis much more about predicting price movements based on the historical price activity. The economists use technical analysis to study the relation between price and time. In this blog, we are going to discuss about the winning strategies with Forex charts

In any of the trading sessions; the most actively traded currencies pair is the Euro and the US dollar. There are divided into left hand side and right hand side which forming a pair. Forex charges will always display how much of the currency on the right hand side is necessary to buy a unit of the currency on the left side.
For you to know when the best time to buy or sell a currency, the traders observes the price and time movement on the chart. The charting tools could be a bars, lines or a pivot point.

By using a Japanese candle stick. Longer candles will have had more price movement during the time that they were open. The top of a candle wick is the highest price for that currency while the wick’s bottom is the lowest price. A currency is bullish when the close of the candle is higher than the open. In simple terms this means that there were more buyers than there were sales during the opening time period. Sometimes the candles will not have wicks. The price opened and it dropped off until it closed.

However the Forex charts do not offer a bullet proof trading hints but they can help trader to understand the previous price for decision making. It would be good to use a combination of fundamental and technical analysis to gauge better and precise information in relation to pricing.

In conclusion the technical analysis helps you to predict the price movements and its not guaranteed. Hence better to use both the technical and fundamental analysis. The best online trading platform usually having both  in a single screen to help better decision making.

Forex trading and world events

Forex prices is very sensitive to the world news and events happening everyday. The more chaotic the event the more higher the risk a Forex trader must face, or the better the rewards

There are advantages when comes to Forex trading and or course the obvious one is the reward in term of money or profits. But Forex trading is always not an easy task, you need to first acquire knowledge to trade in Forex market.

In general there are two kinds of analysis you can perform on the Forex markets. They are known as technical analysis and fundamental analysis. Generally you need both of them if order to be successful.

Technical Forex traders base their trading on the analysis of the charts and indicators, while fundamentalist are based on the fundamental numbers and economical indicators of the countries to gauge the actual currency value compared to the other.

This risky situation is that when unprecedented  chaotic world events start to develop as the trading day goes on. The power of the media (tv, internet, printed) can magnify and sometimes it may even distort the events taking place and impacting the trading journey in a significant manner. The result of this magnification and rapid diffusion of the news about the series of unfavorable events taking place is an increased atmosphere of fear, confusion and uncertainty in the trading world. And fearful traders are not prone to make the best trading choices because they have given themselves to panic and emotional reactions instead of reasoned and intelligent decisions.

If you need to have more specific examples of these kind of events you can search a bit inside your memories and consider the impact of just a few types of unfavorable chaotic world events as the political upheavals or corporate scandals of companies as; Enron, WorldCom, or of people as the case of Martha Stewart trial, etc. There is also the example of the terrorist attacks on  Sep 11 in New York, March 11 in Spain, etc.  Also natural disasters: tsunamis, earthquakes, floods, freezes, droughts, hurricanes  along with wars can cause great disruption in a trading journey.

In short, every forex trader should be totally sure that his method of trading has built-in safe guards (stops, limit orders) to prevent a major financial loss from his trading account in case any of the unfavorable events I mentioned above ever  takes place. And being realistic, many of those events will surely happen in the future.

Free Forex Trading with best online forex broker

The best online Forex brokers are usually offering free demo account to beginner to test and experience the Forex market as real. They walk through the same process from making decisions based on news, tracking performance like a professional Forex traders to reacting to trading patterns

All this is for free and thanks to the state of are software and Internet. You can start trading for fun without putting any real money as deposit to start. You gain experience about how Forex transactions are placed once you start placing demo trades. The demo Forex trading account allows you to become familiar with the trading rules and procedures such as placing an order, limit order, good till date and many other functions in order to become a professional

You won't lose anything but making a big gains from the free Forex trading account by learning all the skills and terms. Usually the best online Forex brokers offering state of art software such as latest Metatrader platform with the best charting software. All the critical indicators and tools that you need should be also included and possibly an automated trading

In summary, practice using the demo account provided by these online Forex brokers. Make sure you are really comfortable before placing a real trade with you hard earn money.

Foreign exchange Buying and selling Philosophy

Most of the people are being captured by the so call best forex brokers that offer "high returns" with low investment. Forex trading is not an easy task that required complicated financial skills.

Mistakes Of The Beginning Trader

The most common mistakes that many beginner traders make is without a strategy and letting emotions rule their trading decisions. Most of the time, once the trading account is approved they dive right in and started the trading. Without a discipline when comes to online Forex trading is guaranteed to lose money.

Understanding Market Movements
A trader must be well educated in market movements in order to make rational trading decisions. This including the ability to apply technical studies from plot out entry to exit points, to take the full advantage of all orders placed to minimize risk

Money Management

Money management is an integral part of any trading strategy other than knowing which currencies to trade and how to recognize entry and exit signals. Successful trader has to manage his resources and integrate money management into his trading plan to avoid further losses and maximize profits

For an example, when entering a position try to limit your risk to 1% to 3% of each trade. This means that if you are trading a standard lot of $100,000 you should limit your risk to $1,000 to $3,000. You do this with a stop loss order 100 pips (1 pip = $10) above or below your entry position.

In conclusion, forex traders must have self discipline in order to be a successful forex trader.