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When you are searching out an online forex trading broker, it is worth making sure that you get a broker who will send you forex alerts. This is simply an email or cellphone text message alerting you to the latest developments in the forex market. Often the broker will recommend a particular course of action in the message, which you can follow or not as you like.
Until you get into foreign exchange trading, you may not see the value of this. It's simple to explain. Forex is a 24/7 trading platform because currency trading happens in all 24 time zones across the world. This means massive opportunities for traders with billions of transactions happening every day. But it also means that, unlike stock market traders whose day ends when their national market closes at 5 or 6 pm, forex traders have to keep track of a constant flow of information.
Nobody can be watching markets 24/7. Brokers and companies can do it, of course, by employing staff on shifts, but a sole trader has to take time out. Even if you stick with just the top five markets -- US, Euro, Britain, Australia, Japan and Switzerland -- you have 15 pairs of currencies to monitor in 4 different time zones. And sometimes big money can be made on the more volatile minor currencies. If you want to have any kind of life away from your computer without missing out on the majority of opportunities, see your kids and save your marriage, the best way to manage this is by receiving alerts.
Wednesday, November 12, 2008
Currency Trading Investment Techniques
I wanted to take the time and talk to you about currency trading investment techniques. There is a lot of money to be made in this $3 trillion dollar a day market, but if you don't have a strong knowledge of investing than you're really jumping into rough waters without a life jacket. It is estimated that an overwhelming majority of people that enter this market are losing money and they lose for the simple reason that they jump right in without knowing how to protect themselves from a loss. I've been doing this for a few years now, so I'll share a little of what I learned.
Your broker is the most important part of trading. It is the middleman. It holds your money and it is the gatekeeper. Having the best quality broker will take a lot of headaches and anxiety away. The first point I want to make is that all brokers are not equal. There are a lot out there that are of poor quality and some which are just scams. You need to do the necessary research to find a broker that is of quality and meets your needs. The best thing you can do is use online forex forums to read about brokers. These forums are typically full of currency trading investment talk, but there are a lot about brokers.
Your broker is the most important part of trading. It is the middleman. It holds your money and it is the gatekeeper. Having the best quality broker will take a lot of headaches and anxiety away. The first point I want to make is that all brokers are not equal. There are a lot out there that are of poor quality and some which are just scams. You need to do the necessary research to find a broker that is of quality and meets your needs. The best thing you can do is use online forex forums to read about brokers. These forums are typically full of currency trading investment talk, but there are a lot about brokers.
Forex Brokers – What you Want From Them and What you Don’t
Choosing a forex broker is simple and there are services that you want and don’t want so let’s look at how to choose a forex broker that can increase your chances of forex trading success.
Your broker’s role
Your forex broker’s role is simply to transact your forex trading signals in the market smoothly and efficiently. Many traders however think they can learn forex trading from their broker or their broker can give them advice – This is NOT their function.
If brokers were good at trading and had currency trading systems that made money they would not be brokers!
Forget getting trading advice or help from a broker concentrate on the cost of doing business with them.
Spreads
You see a lot of brokers who say they deal commission free and technically they do but you pay a cost for doing business and that’s the spread. You need to keep this as tight as possible - 2 – 3 pip spreads are common now, so look for a broker who will charge at this level
Other fees
Many brokers slip in “other fees” look at these closely and never pay an additional commission to the spread.
The trading platform
If you are trading via an online forex trading platform make sure it works and is flexible, reliable and secure. A broker will normally let you test drive a forex trading platform via a demo account which is useful in terms of judging it for yourself.
Support
Look for a broker who provides around the clock support 24 hours a day 7 days a week just in case you do run into problems.
Margin and Leverage
Look at the leverage your broker will give you. A level of 200:1 is ample for most but you can get up to 400:1 with many brokers should you require it.
Guaranteed Stops
Many novice traders are nervous about trading with a forex broker sue to the unlimited losses that trading on margin can cause. With these traders in mind many forex brokers will provide guaranteed stops and negative balance protection for peace of mind.
Minimum Deposits
A few years ago it was hard to open an account for under 10,000 today you can open one online with as little as $100.00. If you are new to currency trading and simply want to dip your toe in the market then shop around.
Look for forex brokers with online payment methods as these will enable you to fund quickly and also get your profits back quickly too.
Size and standing
There are many brokers that look big but are small and don’t offer the support or service of the bigger brokers. As a general rule look for bigger brokers and see how long they have been in business and look for a minimum of 3 – 5 years.
Your FX partners
Your broker is an important part of your forex trading strategy, not from the point of view of providing trading guidance but making sure your cost of business is low and the order process is smooth.
If you follow the above tips when choosing your forex broker you will find one that right for you and who can help you maximize your FX profits.
Your broker’s role
Your forex broker’s role is simply to transact your forex trading signals in the market smoothly and efficiently. Many traders however think they can learn forex trading from their broker or their broker can give them advice – This is NOT their function.
If brokers were good at trading and had currency trading systems that made money they would not be brokers!
Forget getting trading advice or help from a broker concentrate on the cost of doing business with them.
Spreads
You see a lot of brokers who say they deal commission free and technically they do but you pay a cost for doing business and that’s the spread. You need to keep this as tight as possible - 2 – 3 pip spreads are common now, so look for a broker who will charge at this level
Other fees
Many brokers slip in “other fees” look at these closely and never pay an additional commission to the spread.
The trading platform
If you are trading via an online forex trading platform make sure it works and is flexible, reliable and secure. A broker will normally let you test drive a forex trading platform via a demo account which is useful in terms of judging it for yourself.
Support
Look for a broker who provides around the clock support 24 hours a day 7 days a week just in case you do run into problems.
Margin and Leverage
Look at the leverage your broker will give you. A level of 200:1 is ample for most but you can get up to 400:1 with many brokers should you require it.
Guaranteed Stops
Many novice traders are nervous about trading with a forex broker sue to the unlimited losses that trading on margin can cause. With these traders in mind many forex brokers will provide guaranteed stops and negative balance protection for peace of mind.
Minimum Deposits
A few years ago it was hard to open an account for under 10,000 today you can open one online with as little as $100.00. If you are new to currency trading and simply want to dip your toe in the market then shop around.
Look for forex brokers with online payment methods as these will enable you to fund quickly and also get your profits back quickly too.
Size and standing
There are many brokers that look big but are small and don’t offer the support or service of the bigger brokers. As a general rule look for bigger brokers and see how long they have been in business and look for a minimum of 3 – 5 years.
Your FX partners
Your broker is an important part of your forex trading strategy, not from the point of view of providing trading guidance but making sure your cost of business is low and the order process is smooth.
If you follow the above tips when choosing your forex broker you will find one that right for you and who can help you maximize your FX profits.
Forex and Forex Brokering - The Cheapest Way to Transfer Money Overseas
The foreign exchange market exists wherever one currency is traded for another. This is an international exchange market where simultaneous buying of one currency and selling of another is done. Currencies are traded in pairs, for example Euro/US Dollars (EUR/USD) or US Dollars/Japanese Yen (USD/JPY). It is by far the largest market in the world, in terms of cash value traded and includes trading between large banks, central banks, multinational corporations, governments and other financial market and institutions.
The foreign exchange market is unique because of its trading volume, the extreme liquidity of the market (i.e. price stability even with the fastest buying or selling), the large number and variety of traders in the market, its geographical dispersion, its long trading hours (24 hours a day - except weekends) and the variety of factors that affect exchange rates.
The minimum trading size in this market is usually $1 million, with an overall trading volume of about $1.9 trillion per day worldwide. Buying and Selling of currencies is basically for two reasons. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency. The other 95% is mostly for profit. In fact, this market has the potential to earn almost $100,000 with an initial capital of only $500!
The ten most active traders account for almost 73% of trading volume. These are Deutsche Bank (17%), UBS (12.5%), Citigroup (7.5%), HSBC (6.4%), Barclays (5.9%), Merrill Lynch (5.7%), J.P. Morgan Chase (5.3%), Goldman Sachs (4.4%), ABN AMRO (4.2%), Morgan Stanley (3.9%). These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually only 1-3 pips. One pip is the smallest measure of price move used in forex trading and refers to 1/10,000 of the bid/ask spread. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203 (i.e. 3 pips difference).
Although the banks get the least and most stable bid/ask spread they never offer the same rates to their customers, since their key purpose of participating in this market is for profit.
Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the international three-letter code of the currency into which the price of one unit of XXX currency is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar. According to April 2004's BIS (Bank for International Settlement) study, the most heavily traded products were: EUR/USD (28 %), USD/JPY (17 %) GBP/USD (14 %). The US currency was involved in 89% of transactions, followed by the euro (37%), the yen (20%) and sterling (17%) - (Note that volume percentages should add up to 200% - 100% for all the sellers, and 100% for all the buyers). Although trading in the euro has grown considerably since the currency's creation in January 1999, the foreign exchange market is thus still largely dollar-centred. For instance, trading the euro versus a non-European currency ZZZ will usually involve two trades: EUR/USD and USD/ZZZ. The only exception to this is EUR/JPY, which is an established traded currency pair in the inter-bank market.
According to the BIS study, 53% of transactions were strictly inter-dealer (i.e. inter-bank), 33% involved a dealer (i.e. a bank) and a fund manager or some other non-bank financial institution, and only 14% were between a dealer and a non-financial company. The inter-bank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account.
On the other hand, retail forex brokers handle a minute fraction of the total volume of the foreign exchange market, estimated at $25-50 billion daily, which is about 2% of the whole market. In the retail forex industry market makers more often than not run two separate trading desks- one that they use to actually trade foreign exchange (essentially serving as a proprietary trading desk or "non-dealing desk") and one that is set up for the expressed purpose of off-exchange trading with retail customers (called the "dealing desk" or "trading desk"). The dealing desk operates much like the currency exchange counter at a bank. Inter-bank exchange rates, those coming in from the inter-bank system and displayed at the non-dealing desk, are adjusted to incorporate spreads that safeguard the bank's (in this instance the market maker's) profit before they are displayed in the lobby (at the dealing desk) to the retail customer. Dealing desk pricing is, therefore, not a direct reflection of the currency exchange but artificial pricing created and controlled by the originating broker.
The foreign exchange market is unique because of its trading volume, the extreme liquidity of the market (i.e. price stability even with the fastest buying or selling), the large number and variety of traders in the market, its geographical dispersion, its long trading hours (24 hours a day - except weekends) and the variety of factors that affect exchange rates.
The minimum trading size in this market is usually $1 million, with an overall trading volume of about $1.9 trillion per day worldwide. Buying and Selling of currencies is basically for two reasons. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency. The other 95% is mostly for profit. In fact, this market has the potential to earn almost $100,000 with an initial capital of only $500!
The ten most active traders account for almost 73% of trading volume. These are Deutsche Bank (17%), UBS (12.5%), Citigroup (7.5%), HSBC (6.4%), Barclays (5.9%), Merrill Lynch (5.7%), J.P. Morgan Chase (5.3%), Goldman Sachs (4.4%), ABN AMRO (4.2%), Morgan Stanley (3.9%). These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually only 1-3 pips. One pip is the smallest measure of price move used in forex trading and refers to 1/10,000 of the bid/ask spread. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203 (i.e. 3 pips difference).
Although the banks get the least and most stable bid/ask spread they never offer the same rates to their customers, since their key purpose of participating in this market is for profit.
Currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the international three-letter code of the currency into which the price of one unit of XXX currency is expressed. For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.2045 dollar. According to April 2004's BIS (Bank for International Settlement) study, the most heavily traded products were: EUR/USD (28 %), USD/JPY (17 %) GBP/USD (14 %). The US currency was involved in 89% of transactions, followed by the euro (37%), the yen (20%) and sterling (17%) - (Note that volume percentages should add up to 200% - 100% for all the sellers, and 100% for all the buyers). Although trading in the euro has grown considerably since the currency's creation in January 1999, the foreign exchange market is thus still largely dollar-centred. For instance, trading the euro versus a non-European currency ZZZ will usually involve two trades: EUR/USD and USD/ZZZ. The only exception to this is EUR/JPY, which is an established traded currency pair in the inter-bank market.
According to the BIS study, 53% of transactions were strictly inter-dealer (i.e. inter-bank), 33% involved a dealer (i.e. a bank) and a fund manager or some other non-bank financial institution, and only 14% were between a dealer and a non-financial company. The inter-bank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account.
On the other hand, retail forex brokers handle a minute fraction of the total volume of the foreign exchange market, estimated at $25-50 billion daily, which is about 2% of the whole market. In the retail forex industry market makers more often than not run two separate trading desks- one that they use to actually trade foreign exchange (essentially serving as a proprietary trading desk or "non-dealing desk") and one that is set up for the expressed purpose of off-exchange trading with retail customers (called the "dealing desk" or "trading desk"). The dealing desk operates much like the currency exchange counter at a bank. Inter-bank exchange rates, those coming in from the inter-bank system and displayed at the non-dealing desk, are adjusted to incorporate spreads that safeguard the bank's (in this instance the market maker's) profit before they are displayed in the lobby (at the dealing desk) to the retail customer. Dealing desk pricing is, therefore, not a direct reflection of the currency exchange but artificial pricing created and controlled by the originating broker.
Find the Best Broker of Foreign Exchange
Foreign exchange refers to exchanging of money in one currency for another which is traded on foreign exchange market or forex. Having an average daily trade of US$ 2 trillion and above, forex is the largest trading market in the world. Everyday new investors are jumping in forex to earning substantial profits. It’s good till they garner high return on investment but what if they tumbled down in the very first effort? Well, it may happen; especially when one is not at all exposed to the odds and calculated risks of foreign exchange. Therefore, it is suggested to move with a broker of forex, who knows foreign exchange more than him. Now how to hire an honest broker of forex? You may get the answer below:
Before hiring a forex broker make sure you know his job well i.e., for what he is assigned and how much he can do for you. Your expectation should be in tune with the experience of your broker. You may find a broker of the forex market, who is chic and cool with a long list of satisfied customers. But it’s not what you want from him. Before hiring a broker of forex, you should check out the spread of the forex broker. Go through his terms and agreements. Have an insight into the stipulations of service.
Embracing a broker who promises no risk may lead you to loss. You should not go after words of such brokers as forex involves certain amount of risks because of the nature of the market. Add to this, while selecting a broker of forex or foreign exchange market, see whether the broker has mini account or not. Mini account is designed for newcomers in the online currency trading and those who have limited investment capital.
Before selecting a broker of forex market, check out the leverage option. Leverage can be expressed as a ratio that held between total capital which is available to be traded and your actual capital. Also try to find out a broker of forex market, who has expertise in offering best resources and information about foreign exchange. A good broker of foreign exchange should offer real time news, website support, meticulous data interpretation service, updated charts, technical analysis to name a few.
Forex is the largest market marked for its geographical dispersion and 24 hour activity. Your broker should also offer you 24 hour support. He should know the demand of foreign exchange and need of urgent trade agreements of forex. Check out all possible support systems offered by the broker of the forex market.
Before hiring a forex broker make sure you know his job well i.e., for what he is assigned and how much he can do for you. Your expectation should be in tune with the experience of your broker. You may find a broker of the forex market, who is chic and cool with a long list of satisfied customers. But it’s not what you want from him. Before hiring a broker of forex, you should check out the spread of the forex broker. Go through his terms and agreements. Have an insight into the stipulations of service.
Embracing a broker who promises no risk may lead you to loss. You should not go after words of such brokers as forex involves certain amount of risks because of the nature of the market. Add to this, while selecting a broker of forex or foreign exchange market, see whether the broker has mini account or not. Mini account is designed for newcomers in the online currency trading and those who have limited investment capital.
Before selecting a broker of forex market, check out the leverage option. Leverage can be expressed as a ratio that held between total capital which is available to be traded and your actual capital. Also try to find out a broker of forex market, who has expertise in offering best resources and information about foreign exchange. A good broker of foreign exchange should offer real time news, website support, meticulous data interpretation service, updated charts, technical analysis to name a few.
Forex is the largest market marked for its geographical dispersion and 24 hour activity. Your broker should also offer you 24 hour support. He should know the demand of foreign exchange and need of urgent trade agreements of forex. Check out all possible support systems offered by the broker of the forex market.
Forex Brokers - 9 Essential Points to Consider When you Open an Account
Here are 9 points to consider when choosing a Forex broker.
1. Pip Spreads Offered
Spreads between brokers vary dramatically and the difference can be as much as double so first and foremost when trading FX you need a tight spread
Transaction costs mount up - especially if you are trading frequently and impact on your profits and add to your losses. The tighter the spread, the more profits
you will make.
Today, many brokers offer 3 - 5 pips - and this is what you should look for.
2. Deposit Online & ease of account operation
Look for a broker who will take online payments to your Forex account via and secure online payment method. This is great for funding your account quickly - and getting your trading profits back to.
3. Negative Balance Protection
Leverage or gearing is one of the main reasons that people are attracted to online currency trading. Of course, leverage is a double-edged sword - and where there are high rewards, there is high risk.
With this in mind many Forex brokers now offer guaranteed stops and negative balance protection which is a big comfort to those traders who are new to the market or want to have a finite risk.
Fees for the service tend to be quite competitive and their a popular option with many traders
4. Leverage Offered
The leverage brokers will give you varies from broker to broker, but today 100 – 200:1 leverage is common and some brokers will go as high as 400:1 meaning you have the potential to leverage your account for greater FX profits
5. Other Charges & Broker assist accounts
Your only transaction cost should be the currency spread - you should NOT pay other commissions.
Avoid broker assisted accounts where a broker supposedly will help you make money from Forex trading they wont! If brokers were good traders they wouldn’t be brokers!
If you trade in this way you will lose and you will extra commissions to.
You are responsible for your FX profits so accept this fact and go with an execution only broker.
6. Investment Minimum
Today, currency trading is not just the preserve of wealthy individuals and banks - anyone can get involved and minimum deposits have dropped dramatically.
You can open a trading account online with some Forex brokers with as little as $100.00.
This means that novice traders can start off with small amounts.
7. Trading Platform
If you are trading online, you will go through a Forex trading platform.
You want ease of use and reliability – Many brokers offer demo accounts so try them out.
8. FOREX Trading Education
While you should always make your own investment decisions, it’s good to get some freebies that can help you with your Forex trading strategy such as:
• FREE trading guides
• Forex trading seminars
• Trading news and charts
• Trading recommendations & ideas
• Forex trading systems
• Trading books etc
9. Look at the overall package
When choosing a Forex broker you have a lot of choice and the above tips will help you while there are a lot of small brokers around and many are good go for someone who has been around for a while and is established.
1. Pip Spreads Offered
Spreads between brokers vary dramatically and the difference can be as much as double so first and foremost when trading FX you need a tight spread
Transaction costs mount up - especially if you are trading frequently and impact on your profits and add to your losses. The tighter the spread, the more profits
you will make.
Today, many brokers offer 3 - 5 pips - and this is what you should look for.
2. Deposit Online & ease of account operation
Look for a broker who will take online payments to your Forex account via and secure online payment method. This is great for funding your account quickly - and getting your trading profits back to.
3. Negative Balance Protection
Leverage or gearing is one of the main reasons that people are attracted to online currency trading. Of course, leverage is a double-edged sword - and where there are high rewards, there is high risk.
With this in mind many Forex brokers now offer guaranteed stops and negative balance protection which is a big comfort to those traders who are new to the market or want to have a finite risk.
Fees for the service tend to be quite competitive and their a popular option with many traders
4. Leverage Offered
The leverage brokers will give you varies from broker to broker, but today 100 – 200:1 leverage is common and some brokers will go as high as 400:1 meaning you have the potential to leverage your account for greater FX profits
5. Other Charges & Broker assist accounts
Your only transaction cost should be the currency spread - you should NOT pay other commissions.
Avoid broker assisted accounts where a broker supposedly will help you make money from Forex trading they wont! If brokers were good traders they wouldn’t be brokers!
If you trade in this way you will lose and you will extra commissions to.
You are responsible for your FX profits so accept this fact and go with an execution only broker.
6. Investment Minimum
Today, currency trading is not just the preserve of wealthy individuals and banks - anyone can get involved and minimum deposits have dropped dramatically.
You can open a trading account online with some Forex brokers with as little as $100.00.
This means that novice traders can start off with small amounts.
7. Trading Platform
If you are trading online, you will go through a Forex trading platform.
You want ease of use and reliability – Many brokers offer demo accounts so try them out.
8. FOREX Trading Education
While you should always make your own investment decisions, it’s good to get some freebies that can help you with your Forex trading strategy such as:
• FREE trading guides
• Forex trading seminars
• Trading news and charts
• Trading recommendations & ideas
• Forex trading systems
• Trading books etc
9. Look at the overall package
When choosing a Forex broker you have a lot of choice and the above tips will help you while there are a lot of small brokers around and many are good go for someone who has been around for a while and is established.
Currency Exchange Concerns
One of the country's leading economists, and Investment Editor of the Financial Times, John Authers says, "That the chances of an acute recession have receded significantly..."
Plus to the advantage of our economy and unstable currency is benefited by the chances of a recession in the US falling. Although the market isn't stable, varying prominent economists have all suggested there are suggestions of a slight improvement. In previous times leading up to a recession there has been different signals. In 2000 the ISM has fallen to 41 and a decade previous to 39.2.
Such credit squeezes on the banking systems affect our currency exchange rates; and therefore any subsequent overseas spending.
In business, such a poor exchange rate means that exports become so much more expensive. However individual clients on a personal level will find that there are two downfalls, either of which is when we exchange our money into other currencies.
For those who travel there is an upside and a downside. For those choosing to travel to Europe will find a downside as their purchase of holiday spends into Euros will be drastically reduced if compared to previous years. Those traveling to the US will discover the upside and their pound will get them more dollars.
The other downside is for those individuals choosing this year to re-locate into Europe, more especially those countries that have adopted the euro. Imagine for one moment those with a £100,000... In July of 2007 they would get around 142,000 Euros; today however they would only get 122,000 euros. That's a difference of 20,000 Euros. That of course could be the difference between 2nd or a third bedroom, or a finca and a small apartment.
Currency Brokers have seen an upsurge in business, in a natural way, as people find a need to work harder in getting the best out of their money. Our High Street Banks, although they do change large amounts of currency, cannot compete with the Currency Broker. Lower overheads and fewer staff help to trim off their costs.
Currency Brokers charge less than 1% as opposed to the hefty 3 to 4% charged by the banks. This may not sound much until you consider exchanging £100,000; that would be a nice 'shareholders meeting bubbly session' costing almost £4,000, if you catch my humour.
Plus to the advantage of our economy and unstable currency is benefited by the chances of a recession in the US falling. Although the market isn't stable, varying prominent economists have all suggested there are suggestions of a slight improvement. In previous times leading up to a recession there has been different signals. In 2000 the ISM has fallen to 41 and a decade previous to 39.2.
Such credit squeezes on the banking systems affect our currency exchange rates; and therefore any subsequent overseas spending.
In business, such a poor exchange rate means that exports become so much more expensive. However individual clients on a personal level will find that there are two downfalls, either of which is when we exchange our money into other currencies.
For those who travel there is an upside and a downside. For those choosing to travel to Europe will find a downside as their purchase of holiday spends into Euros will be drastically reduced if compared to previous years. Those traveling to the US will discover the upside and their pound will get them more dollars.
The other downside is for those individuals choosing this year to re-locate into Europe, more especially those countries that have adopted the euro. Imagine for one moment those with a £100,000... In July of 2007 they would get around 142,000 Euros; today however they would only get 122,000 euros. That's a difference of 20,000 Euros. That of course could be the difference between 2nd or a third bedroom, or a finca and a small apartment.
Currency Brokers have seen an upsurge in business, in a natural way, as people find a need to work harder in getting the best out of their money. Our High Street Banks, although they do change large amounts of currency, cannot compete with the Currency Broker. Lower overheads and fewer staff help to trim off their costs.
Currency Brokers charge less than 1% as opposed to the hefty 3 to 4% charged by the banks. This may not sound much until you consider exchanging £100,000; that would be a nice 'shareholders meeting bubbly session' costing almost £4,000, if you catch my humour.
Forex Scalping
There are many day traders who go in for FOREX scalping trading several times a day and trying to get out with small profits which will add up over time.
This form of hit and run trading is more popular than ever.
Let’s look at how it works.
Well firstly, it doesn’t work at all and will doom your trading to failure – Any trader who day trades or tries to scalp profits loses – PERIOD.
Here we will explain why.
Data is meaningless.
If you are studying charts you need to get the odds in your favour.
This is of course not possible in day trading as all volatility is random and prices can and do go anywhere.
This is obvious when you have millions of people trading trillions of dollars daily.
If you don’t have data that can help you get the odds in your favour then it is pointless applying any technical indicator.
Moving averages, support and resistance and pivot points which are useful tools for longer term trading simply don’t work in day trading.
There only good tools if you feed them with the right data! And day trading doesn’t do that.
Scalping the market is doomed to failure and it’s made even worse by the fact it ignores the fundamental rule of investing:
Run your profits to cover your inevitable losses.
You are going to have losses even the top traders have them, but you must keep them small and day trading or scalping FOREX markets does this and it of course has a lot of them!
FOREX scalping by its very nature doesn’t run profits.
So what do you end up with?
This form of hit and run trading is more popular than ever.
Let’s look at how it works.
Well firstly, it doesn’t work at all and will doom your trading to failure – Any trader who day trades or tries to scalp profits loses – PERIOD.
Here we will explain why.
Data is meaningless.
If you are studying charts you need to get the odds in your favour.
This is of course not possible in day trading as all volatility is random and prices can and do go anywhere.
This is obvious when you have millions of people trading trillions of dollars daily.
If you don’t have data that can help you get the odds in your favour then it is pointless applying any technical indicator.
Moving averages, support and resistance and pivot points which are useful tools for longer term trading simply don’t work in day trading.
There only good tools if you feed them with the right data! And day trading doesn’t do that.
Scalping the market is doomed to failure and it’s made even worse by the fact it ignores the fundamental rule of investing:
Run your profits to cover your inevitable losses.
You are going to have losses even the top traders have them, but you must keep them small and day trading or scalping FOREX markets does this and it of course has a lot of them!
FOREX scalping by its very nature doesn’t run profits.
So what do you end up with?
Tips For Selecting A Forex Broker
Would you like a piece of the largest market in the world? What is it and how do I get it? It is the Currency of Forex Market. To actually start trading Forex one of the first things you will need to commence is select a forex broker. Selecting a forex broker will be a key decision in your future forex trading success. Getting it wrong now may lead to problems down the road.
Before you select an online Forex broker, you as a new investor should carry out your due diligence and carefully check the services offered by a broker and the operational policies by which they conduct themselves.
It is important that you are aware that as with any business there are scammers out there looking to trick you into handing over your money without providing the service they advertise. Do some research into the broker you are looking to use.
There are at least 20 online foreign exchange brokers nowadays. When deciding on who to choose you should try the demos of around 6-8 to get a feel for their trading platform.
Using the demo platform is also a valuable learning tool as is most cases the forex broker's demo uses live data. The only difference is that you are using a paper account and not real money.
Some things to consider when selecting a forex broker include:
* The broker's hours of operation
* the minimum trading unit size
* the bid/ask pip spread on major currency pairs
* the reliability of the forex trading software
* is there a phone line backup to the forex trading software?
To execute trades you will need software that allows you to place by or sell orders. Other forex related software is used for either providing forex trading signals or providing graphical information (charting), which is used to analyse data. The forex trading software provided by your broker is normally free. The forex signal software would typically come on a subscription basis. With forex charting software there are both free and subscription options.
Once you have your trading account opened and have installed the forex trading software you will be ready to place some orders. They would include some of the following:
Market orders - this is an order to buy or sell at the current market price
Limit orders - this order is placed to buy or sell at a certain price as the market price moves up or down
Limit entry orders - this order is executed when the exchange rate touches a specific level without breaking that level
Stop-loss orders - this is a type of limit order linked to a specific order aimed at stopping the order when a loss level is reached
Before you select an online Forex broker, you as a new investor should carry out your due diligence and carefully check the services offered by a broker and the operational policies by which they conduct themselves.
It is important that you are aware that as with any business there are scammers out there looking to trick you into handing over your money without providing the service they advertise. Do some research into the broker you are looking to use.
There are at least 20 online foreign exchange brokers nowadays. When deciding on who to choose you should try the demos of around 6-8 to get a feel for their trading platform.
Using the demo platform is also a valuable learning tool as is most cases the forex broker's demo uses live data. The only difference is that you are using a paper account and not real money.
Some things to consider when selecting a forex broker include:
* The broker's hours of operation
* the minimum trading unit size
* the bid/ask pip spread on major currency pairs
* the reliability of the forex trading software
* is there a phone line backup to the forex trading software?
To execute trades you will need software that allows you to place by or sell orders. Other forex related software is used for either providing forex trading signals or providing graphical information (charting), which is used to analyse data. The forex trading software provided by your broker is normally free. The forex signal software would typically come on a subscription basis. With forex charting software there are both free and subscription options.
Once you have your trading account opened and have installed the forex trading software you will be ready to place some orders. They would include some of the following:
Market orders - this is an order to buy or sell at the current market price
Limit orders - this order is placed to buy or sell at a certain price as the market price moves up or down
Limit entry orders - this order is executed when the exchange rate touches a specific level without breaking that level
Stop-loss orders - this is a type of limit order linked to a specific order aimed at stopping the order when a loss level is reached
When Searching for a Forex Broker
Forex brokers are valuable to those that wish to enter into a forex currency trading. With the advent of online businesses assisted by the technology of the Internet, online forex brokers are popping up like plants in the World Wide Web because of the ease and inexpensive ways of establishing a corporate appearance. If you are a novice forex trader, you need a very good broker at your side. However, with so many of them to choose from, what should you look for in a broker?
First, brokers should offer competitive spreads, or the difference between the selling and buying prices of a certain currency. Good forex brokers offer anywhere between 3 and 5 pips, the ideal spreads that can make sure you are gaining from your investment. Avoid as much as possible those brokers that offer variable spreads, as you may find a spread that suddenly widens during a busy market, which is where you would gain money, but only if the market is bullish.
Another good indication of a reliable broker is one who uses a secure online connection to take payments and funding for your forex currency account. This ensures smooth trading, because you don’t have to make time-consuming e-commerce transactions just to get money into your account, and another transaction to transfer profits to your bank account. Remember, you don’t only trade, but you also have to look at forex brokers’ data in order to make decisions. You don’t have the time to make time-consuming transactions in between.
Next, as a way to maximize your potential profits when engaging in the trade, you need to have a broker that will grant a leverage of about 200:1. This is the ideal leverage that forex brokers should have; however, there are some that offer higher leverages. These leverages even reach 400:1 as a maximum, offering your higher potential profits from your forex currency trade.
Of course, you should not be paying brokers extra charges beside the forex currency spread. This is where brokers earn money, and nothing else. Avoid those brokers that charge brokerage commissions because by law, these brokers are not allowed to make charges such as these commissions as well as anything else. You should only be paying for the information they give you, and that is the currency spread.
Of course, there is the unspoken rule of verifying the legitimacy of your broker. By law, all brokers are required to register with the Futures Commission Merchant. Check with this agency if any potential brokers you have in mind have a record in their database. You can also check if there is any derogatory information in the Commodity Futures Trading Commission, the agency regulating forex brokers, before you entrust your forex currency trading with any of them.
First, brokers should offer competitive spreads, or the difference between the selling and buying prices of a certain currency. Good forex brokers offer anywhere between 3 and 5 pips, the ideal spreads that can make sure you are gaining from your investment. Avoid as much as possible those brokers that offer variable spreads, as you may find a spread that suddenly widens during a busy market, which is where you would gain money, but only if the market is bullish.
Another good indication of a reliable broker is one who uses a secure online connection to take payments and funding for your forex currency account. This ensures smooth trading, because you don’t have to make time-consuming e-commerce transactions just to get money into your account, and another transaction to transfer profits to your bank account. Remember, you don’t only trade, but you also have to look at forex brokers’ data in order to make decisions. You don’t have the time to make time-consuming transactions in between.
Next, as a way to maximize your potential profits when engaging in the trade, you need to have a broker that will grant a leverage of about 200:1. This is the ideal leverage that forex brokers should have; however, there are some that offer higher leverages. These leverages even reach 400:1 as a maximum, offering your higher potential profits from your forex currency trade.
Of course, you should not be paying brokers extra charges beside the forex currency spread. This is where brokers earn money, and nothing else. Avoid those brokers that charge brokerage commissions because by law, these brokers are not allowed to make charges such as these commissions as well as anything else. You should only be paying for the information they give you, and that is the currency spread.
Of course, there is the unspoken rule of verifying the legitimacy of your broker. By law, all brokers are required to register with the Futures Commission Merchant. Check with this agency if any potential brokers you have in mind have a record in their database. You can also check if there is any derogatory information in the Commodity Futures Trading Commission, the agency regulating forex brokers, before you entrust your forex currency trading with any of them.
Online Forex Brokers - for Novice Traders
Will you make money at currency trading? This is a question most traders try and answer by trading a demo account - but the problem with demo accounts is there is no pressure, i.e no money on the line and it proves nothing.
Most traders who make money with demo account lose when they open an account with a forex broker. Now there is a fantastic way for traders to see if they have what it takes. There is a new account called a protected account and it acts as a bridge between a demo and a full trading account. The concept is:
The Protected Account works as a funded demo account in which the client pre-determines their risk level. Among its features are:
-Trade up to 100 times your initial deposit, even with a negative balance.
- Make as many trades as desired, 24 hours a day, using any currency pair.
- At the end of the a set period, (normally two weeks) any positive balance is the clients to keep the broker covers the losses.
This has significant advantages over a demo account, as it simulates the feeling of trading real money on the Foreign Exchange and let's face it when money is on the line we feel and act differently.
Trading is probably 20&% method and 89% mindset and it's a fact that most traders fail because they don't trade with discipline.
The Protected Account acts as a bridge between a demo account and a real one, providing an authentic trading experience, but of course the risk is managed and a huge advantage is - even if you go debit on the first day you can still keep trading so you get plenty of trades and plenty of practice.
Most traders who make money with demo account lose when they open an account with a forex broker. Now there is a fantastic way for traders to see if they have what it takes. There is a new account called a protected account and it acts as a bridge between a demo and a full trading account. The concept is:
The Protected Account works as a funded demo account in which the client pre-determines their risk level. Among its features are:
-Trade up to 100 times your initial deposit, even with a negative balance.
- Make as many trades as desired, 24 hours a day, using any currency pair.
- At the end of the a set period, (normally two weeks) any positive balance is the clients to keep the broker covers the losses.
This has significant advantages over a demo account, as it simulates the feeling of trading real money on the Foreign Exchange and let's face it when money is on the line we feel and act differently.
Trading is probably 20&% method and 89% mindset and it's a fact that most traders fail because they don't trade with discipline.
The Protected Account acts as a bridge between a demo account and a real one, providing an authentic trading experience, but of course the risk is managed and a huge advantage is - even if you go debit on the first day you can still keep trading so you get plenty of trades and plenty of practice.
Online Forex Brokers . Checklist for Choosing One
Here you will find a checklist so that you can find a broker that will maximize your trading experience.
1. Execution Only
Your broker is only there to help you transact your orders and make sure your account runs smoothly – they should NOT give trading recommendations.
Many novice traders think this is a good idea and their broker knows best, however if he could make money trading he wouldn’t be a broker!
Brokers are there to transact orders and that’s all.
If you don’t take responsibility for your trading you won’t win.
2. Look for tight spreads
This is your cost of doing business and the less you pay the more of your profits you get to keep.
Look for spreads from your forex broker of 3 – 5 pips for trading the majors.
There should be no other commissions or fees - make sure the spread is all you pay.
3. Leverage
Look fro leverage of at least 200:1, although many brokers will offer you more and some go as high as 400:1.
4. Trading platform
Check it out and see how useable and reliable it is and that you get 24 hour support, if you need it at anytime for any problems you may encouter - not all brokers offer 24 hour service so beware.
5. Ease of funding and minimum investment
Today, many forex brokers will let you fund an account online with as little as a $100.00.
If you are a novice starting small is a good way to get your feet wet.
These companies also allow small minimum trades.
If there are online payment facilities, you can fund your account quickly and equally get your profits back quickly.
6. Guaranteed stops
If you are a novice trader and worried about the unlimited liability that margin trading presents, you may want to guarantee your stop and there are many brokers who will provide this comfort for a fee.
7. Extras
A forex broker is not there to give you trading advice but it is nice to get extras such as demo accounts, free newsletters, reports and other educational material, which can help you improve your trading – You will find many brokers who offer a lot of extras and if you are new to trading they are well worth having.
1. Execution Only
Your broker is only there to help you transact your orders and make sure your account runs smoothly – they should NOT give trading recommendations.
Many novice traders think this is a good idea and their broker knows best, however if he could make money trading he wouldn’t be a broker!
Brokers are there to transact orders and that’s all.
If you don’t take responsibility for your trading you won’t win.
2. Look for tight spreads
This is your cost of doing business and the less you pay the more of your profits you get to keep.
Look for spreads from your forex broker of 3 – 5 pips for trading the majors.
There should be no other commissions or fees - make sure the spread is all you pay.
3. Leverage
Look fro leverage of at least 200:1, although many brokers will offer you more and some go as high as 400:1.
4. Trading platform
Check it out and see how useable and reliable it is and that you get 24 hour support, if you need it at anytime for any problems you may encouter - not all brokers offer 24 hour service so beware.
5. Ease of funding and minimum investment
Today, many forex brokers will let you fund an account online with as little as a $100.00.
If you are a novice starting small is a good way to get your feet wet.
These companies also allow small minimum trades.
If there are online payment facilities, you can fund your account quickly and equally get your profits back quickly.
6. Guaranteed stops
If you are a novice trader and worried about the unlimited liability that margin trading presents, you may want to guarantee your stop and there are many brokers who will provide this comfort for a fee.
7. Extras
A forex broker is not there to give you trading advice but it is nice to get extras such as demo accounts, free newsletters, reports and other educational material, which can help you improve your trading – You will find many brokers who offer a lot of extras and if you are new to trading they are well worth having.
Forex Brokers - Helping to Maximize Your Success
A Forex broker is a broker dealing in foreign exchange, just like real estate broker who deals in real estate and properties. Simply, a Forex broker is an advisor who advises you about the forex market. However, the Forex market is not the perfect place to play with as a novice and beginner as there are many criticalities involved along with much risk bearing capacities. Novices can very quickly get their fingers badly burnt. But inexperience is not the only reason to consider using a Forex broker to trade in the high-risk international currencies market.
So, the Forex broker is an advisor who advises you about the forex market and allows you to work for 24 hours a day with major currencies like EUR, JPY, GBP, CHF etc against the US dollar on the spot, i.e. according to the current prices on the forex international exchange market. But the level of profits depends only on your abilities as well as your timely decision.
Although the role of the Forex broker is relatively redundant as a result of technological advancement and increased awareness, we cannot completely underestimate his role. The new paradigm shift has had something of a democratizing effect on the financial markets, and in the years that have followed a plethora of banks and brokerages have extended the range of their services to a new market by packaging up their online trading systems for the retail market, enabling the more modest investor to trade from their own computer screen - even on the previously out-of-reach currency markets. This is where the real role of Forex broker starts.
PIP is nothing special but Price Interest Points. In the forex market, currencies are always priced in pairs. The quoted price is the level where we, acting as the market maker, are willing to buy/sell the currency pair.
Let’s see some more information about Spread. As with all financial products, forex quotes include terms like 'bid' and 'ask”'. The 'bid', in its simplest terms is the price at which a dealer is willing to buy (and clients can sell) the base currency in exchange for the counter currency. The 'ask' is the price at which dealer will sell (and clients can buy) the base currency in exchange for the counter currency. The difference between the bid and the ask price is referred to as the spread. The spread defines the trader’s cost, which can be recovered with a favorable currency move in the market. The value of a pip is determined by the pair of currencies being traded, the rate at which the currency pair is trading and the size of the position being traded.
Real-time streaming prices
Price certainty on market orders
Competitive pricing
Fixed 3-5 pip spreads
So, the Forex broker is an advisor who advises you about the forex market and allows you to work for 24 hours a day with major currencies like EUR, JPY, GBP, CHF etc against the US dollar on the spot, i.e. according to the current prices on the forex international exchange market. But the level of profits depends only on your abilities as well as your timely decision.
Although the role of the Forex broker is relatively redundant as a result of technological advancement and increased awareness, we cannot completely underestimate his role. The new paradigm shift has had something of a democratizing effect on the financial markets, and in the years that have followed a plethora of banks and brokerages have extended the range of their services to a new market by packaging up their online trading systems for the retail market, enabling the more modest investor to trade from their own computer screen - even on the previously out-of-reach currency markets. This is where the real role of Forex broker starts.
PIP is nothing special but Price Interest Points. In the forex market, currencies are always priced in pairs. The quoted price is the level where we, acting as the market maker, are willing to buy/sell the currency pair.
Let’s see some more information about Spread. As with all financial products, forex quotes include terms like 'bid' and 'ask”'. The 'bid', in its simplest terms is the price at which a dealer is willing to buy (and clients can sell) the base currency in exchange for the counter currency. The 'ask' is the price at which dealer will sell (and clients can buy) the base currency in exchange for the counter currency. The difference between the bid and the ask price is referred to as the spread. The spread defines the trader’s cost, which can be recovered with a favorable currency move in the market. The value of a pip is determined by the pair of currencies being traded, the rate at which the currency pair is trading and the size of the position being traded.
Real-time streaming prices
Price certainty on market orders
Competitive pricing
Fixed 3-5 pip spreads
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