Monday, February 22, 2010

What is Forex?

Foreign Exchange or Forex is a globally trusted market used for the trading or exchange of currencies of different countries. It is the world’s largest financial market. Millions of people from different walks of life are an active part of Forex or foreign exchange market. With the passage of every year, the Forex market is growing in size and becoming more accessible to common people. It is the market of 21st century and million of people from all over the world are relaying on it to achieve their financial goals. With the advancement in the technology and communication science, Forex has become a huge market but still it has more potential of growth and rise. In the years to come, it may become the trade of choice for many traders. The new generation of traders and investors is seeking exciting opportunities in Forex trade.

Forex or Foreign Exchange Education
Forex or foreign exchange trading is a very tricky and risky task. Without having proper training and education, one has very limited chances of success. The most important cause for the failure of Forex traders is their lack of Forex training. A quality Forex Education or Training helps the Forex traders to improve their trading abilities and skills. Only a well educated or trained Forex trader understands the complexities and subtleties of Forex trade. Proper Forex training teaches the trader a sound trading strategy and an effective approach to currency trading. A qualified Forex trader can explore the opportunities much easily and extensively.

What should be done before London open?
A quality Forex training focuses on the market timing effect on trading and liquidity. The time when London market starts its proceedings is the busiest time of the market. The London market’s startup time has a great effect on Forex market. No education or training system can neglect the importance of analyzing the effect of London’s Forex market’s opening and closing. There are some key points which are very handy to analyze the effect of London market on Forex market. These should be checked, half an hour before the startup of the London market. They are given as below:

Key Points before London open
• if the MACD (Moving Average Convergence / Divergence) indicators are not on the 4 hour and 1 hour then a careful or cautious approach is the better strategy.
• Divergence of the security price from the MACD is a clue that current market trend is going to over.
• A Fibonacci calculation on the last up and down trend help to know if price is going backwards to its initial position or it is heading towards an extended level.
• It is necessary to have knowledge about expected economic reports as they greatly influence the market.
• if the candle nears on the fifteen minute chart at London startup, try to observe the tweezers or doji’s patterns or hammers which indicates the fall of price
• Risk analysis and defining a proper stop is also essential to check


Before a few minute of London startup, the above factors can help to make decision of trading or holding back. Performing a daily analysis on London open is a handy way to improve the Forex trading skills. There is no hard and fast rule for Forex education. Success with Forex trading comes with experience, practice and learning new skills. With getting experienced, a trader get more disciplined and controlled in his emotions which is a must trait for Forex trader.

What is Forex (Foreign Exchange)?

Foreign Exchange (FOREX) is the arena where a nation's currency is exchanged for that of another. The foreign exchange market is the largest financial market in the world, with the equivalent of over $1.9 trillion changing hands daily; more than three times the aggregate amount of the US Equity and Treasury markets combined. Unlike other financial markets, the Forex market has no physical location and no central exchange (off-exchange). It operates through a global network of banks, corporations and individuals trading one currency for another. The lack of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one zone to another in all the major financial centers.

Traditionally, retail investors' only means of gaining access to the foreign exchange market was through banks that transacted large amounts of currencies for commercial and investment purposes. Trading volume has increased rapidly over time, especially after exchange rates were allowed to float freely in 1971. Today, importers and exporters, international portfolio managers, multinational corporations, speculators, day traders, long-term holders and hedge funds all use the FOREX market to pay for goods and services, transact in financial assets or to reduce the risk of currency movements by hedging their exposure in other markets.

MG Financial, now operating in over 100 countries, serves all manner of clients, comprising speculators and strategic traders. Whether it’s day-traders looking for short-term gains, or fund managers wanting to hedge their non-US assets, MG's DealStation™ allows them to participate in FOREX trading by providing a combination of live quotes, Real-Time charts, and news and analysis that attracts traders with an orientation towards fundamental and/or technical analysis.

Saturday, February 20, 2010

Forex Business Learn All About it


I have seen some people in different forums who advertise their EBook or some other thing where they offer to tell the secret of making lot of money via doing forex business.

I would like to tell you that: forex business is one of riskiest businesses that you can find on the internet these days.

If someone tells you that: forex business is a one way road to becoming a rich man and there are only profits and no losses: then I am afraid to tell you that this person is not telling the truth.

People lose lot of money in this business. You can either earn money or you can lose it.

Also, this business is not free to start: that is, you will be required to invest some amount of money, in order to start this business. In case you are only interested in free online money making opportunities, then you can go here to find more information:

Money Making Opportunities

What Is Forex Business?

Forex business involves selling/buying of different currencies. People invest money in banks, stock market etc, forex business is just like that.

You should not trade until you have done lot of research about the currency you want to buy.

One political statement can have a big impact on a particular currency.

You have to be aware of political events: look at the economy and other things that can influence currency rates.

You can either buy or sell a currency. If you buy a currency, then you will get profit if this currency rate increases and if you sell [go short] a currency, then you will gain profit if the rate goes down.

We all know that political scenarios and economic situations can change very quickly. One bankruptcy announcement from a major company can have a big influence.

You can never be sure that the trade you are doing will give you profits in the end.

Have I done any forex business myself?

Yes, I have done this business a little bit myself. But I did not traded currencies online: instead, I have done the trades at a foreign exchange companies.

What I traded?

I had few thousand Pounds which I traded with Pakistani Rupees when the rate was:

1 British Pound = 118 Pakistani Rupees

After few days, I saw the Pound rate down at about Rs.113. At this level, I thought maybe I should invest my money back in Pounds. There was no guarantee that the rate of pound will go up again.

The rate could go further down or could go up again.

So I decided to do this investment and was willing to take this risk.

After few weeks, the rate of pound reached approximately Rs.118 again. That is when I again traded pound with Pak rupee.

I am currently monitoring the market and I think I will invest my money in the currency which will be weaker against US dollar. And when/if that currency gets stronger against US Dollar, I will trade that currency to get some profit.

But it is very much possible that the currency I buy will get further weaker against US Dollar instead of getting stronger. And if I will need my money for some reason, then I will have to trade it and will lose money instead of gaining any profit.

If you want to make money with forex business, then it is possible if you are willing to properly understand all the factors involved in this business and also understand that this work is extremely risky.

Do not invest money until you have done proper and thorough market analysis.

I have seen some online companies that offer a free forex practice account. You can join such program in order to see if you really can do this business or not.

You will be able to trade in forex, 24 hours a day and 5 days a week.

Sunday, February 7, 2010

Important Terms For Online Forex Trading

When it comes to online forex trading it is very important that you are sure of the many of the terms associated with forex, for without knowing the different terminologies in forex you will not be able to carry out your trade in a better way. Here are the important forex terms that you might have to know when dealing in foreign exchange trading

* Appreciation- The currency’s value gets increased in the forex trading.

* Ask- The price demanded by the trader. This more often than not, points out the smallest price that a seller will take over.

* Base currency- The currency that the depositor trades (i.e. EUR in EURUSD)

* Bear - Someone who thinks prices are decreasing. A bear market is one in which there has been a continual fall in prices and which does not look like it will make progress quickly.

* Bid - The charge offered by the trader. These generally indicate the peak price a client will pay.

* Bid/Ask - The Bid rate is the rate at which you can sell. The Ask (or offer) rate is the rate at which you can buy.

* Bull - Someone who is positive about the market activity. A bull market is characterized by enthusiastic and nonstop buying.

* Cross - When trading with currencies, the depositor buys one currency with the help of another. These two currencies form the cross: for example, EURUSD.

* Cross rate - An exchange rate that is estimated from two other exchange rates.

* Depreciation/decline - A drop in the cost of a currency.

* Exchange rate - What one currency is worth in terms of another, for example the Australian dollar might be valued 58 US cents or 70 yen.

Advantages Of Online Forex Trading

No fees or dealing costs

A foreign currency exchange naturally acquires no fee or transaction charge in addition to the quoted spread. This is in great difference to the equity market, where fees for stock trades choice from 8 to 70 USD or yet higher, as well as the quoted spread.

Profit possible in spite of forex market direction:

An investor with an open position is by meaning long one currency and shorts one more. If a trader trusts a foreign currency is about to decrease in value, he or she sells that currency short and goes long a new currency. In the foreign exchange market, selling or shorting is an essential part of carrying out a foreign trade. Profit possible survivals in the Forex market in spite of whether a trader is buying or selling and in spite of whether the market is going up or down. In the US equity markets, short-selling is fewer general and harder to carry out because of dissimilar regulations and market rules. This creates it harder to create a profit.

No limits in foreign currency exchange:

No limits are relevant to the foreign exchange and there are extremely small account balances. This denotes that traders can take pleasure in profit chances in all market situations.

A foreign exchange rate is the comparative value among two currencies. More especially it is the needed amount of one currency to buy or sell one unit of one more currency. This is as well named a pairing; Euro to dollar at 1.3250 denotes that one Euro can be exchanged for 1.3250 US dollars.