Forex Tips & Tricks For A Beginner:
>> Monday 11 May 2009
Concept of Forex:
The medium used by the governments from different countries and businesses in conducting their transactions are known as foreign exchange or Forex. Foreign exchange can be defined as instruments such as currency and notes that are used in business or economic transactions between governments and businesses of different countries. Apart from being used as instruments in transactions between governments and businesses from different countries, foreign exchange or Forex also provides income opportunities for different entities. Participating in the foreign exchange market you can earn money. If you are a novice Forex trader you have to gather a lot of fundamental knowledge, tips & tricks regarding this business.
There is no specific location for the market (although there are major trading centers around the world in a number of cities such as London, Frankfurt, New York and Tokyo) but it is essentially an 'over-the-counter' market with the vast majority of trading being conducted by telephone and on the internet.
How Do You Begin:
Many learning styles are available for beginners at all levels: books, CDs, online courses are also very helpful. A practice account is an ideal gateway for any beginner in the world of Forex. Practice account can help you become familiar with all the features and special offers. You will need charting software to practice reading the Market. Charting is an essential tool that shows you in real-time data what the market is doing moment by moment and also what the market has done in the past. Since you are learning to analyze these charts you can find out what trades to enter and exit, where to set your stop losses, limits etc. There are several good charting software services that you can subscribe to online monthly. Just download the trading platform and record in the "Trade for Fun" mode. Do not let the title mislead you get the same real-time trading and at the same resource as you would if you logged into the "Trade in Goods" mode, the only difference is that it allows trade with virtual money. Enjoy this unbelievable opportunity to learn and practice the trade.
There are millions of traders worldwide, but only some of them are able to make some money; and even fewer people are able to make the big amount. The majority of traders are left with nothing but empty pockets and wasted time. This is mostly because trading in the Forex market proves to be difficult. There are a lot of things to learn and doing it right may not even be enough.
Technical Analysis:
Technical analysis assumes that all known fundamentals are going to show up instantly in price action. Technical analysis therefore is simply a short cut way of taking into account the fundamentals and more importantly takes into account human psychology.
The equation for market movement is:
Supply and demand factors + Human perception (investor psychology) = Price action
Forex Trading:
The futures trading allow traders to hedge against fluctuations in exchange rates that could make vulnerable their transactions. However, most traders use this type of contract to speculate, and so can take advantage of variations of the same exchange rate. Futures contracts require participants to buy or sell at the agreed date, which allows them to cover their operations.
The investor's goal in Forex trading is to profit from foreign currency movements. Forex trading or currency trading is always done in currency pairs. For example, the exchange rate of EUR/USD on Sep 26th, 2003 was 1.0857. This number is also referred to as a "Forex Rate" or just "rate" for short. If the investor had bought 1000 euros on that date, he would have paid 1055.70 U.S. dollars. One year later, the Forex rate was 1.2033, which means that the value of the euro (the numerator of the EUR/USD ratio) increased in relation to the U.S. dollar. The investor could now sell the 1000 euros in order to receive 1208.30 dollars. Therefore, the investor would have USD 122.60 more than what he had started one year earlier. However, to know if the investor made a good investment, one needs to compare this investment option to alternative investments. At the very minimum, the return on investment (ROI) should be compared to the return on a "risk-free" investment.
Risks On The Internet:
These are the risks associated with the use of Internet-based processing system implementation, but not limited to, failure of hardware, software and Internet access. GFM is a signal from the reception or direction of the Internet, and the composition of your equipment or reliability of communication, we can not be responsible for communication error, error or delay in the trade on the Internet. The GFM systems in cases of emergency and contingency plans and the possibility of system failure, and trade via telephone are always available.
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How Do You Begin:
Many learning styles are available for beginners at all levels: books, CDs, online courses are also very helpful. A practice account is an ideal gateway for any beginner in the world of Forex. Practice account can help you become familiar with all the features and special offers. You will need charting software to practice reading the Market. Charting is an essential tool that shows you in real-time data what the market is doing moment by moment and also what the market has done in the past. Since you are learning to analyze these charts you can find out what trades to enter and exit, where to set your stop losses, limits etc. There are several good charting software services that you can subscribe to online monthly. Just download the trading platform and record in the "Trade for Fun" mode. Do not let the title mislead you get the same real-time trading and at the same resource as you would if you logged into the "Trade in Goods" mode, the only difference is that it allows trade with virtual money. Enjoy this unbelievable opportunity to learn and practice the trade.
There are millions of traders worldwide, but only some of them are able to make some money; and even fewer people are able to make the big amount. The majority of traders are left with nothing but empty pockets and wasted time. This is mostly because trading in the Forex market proves to be difficult. There are a lot of things to learn and doing it right may not even be enough.
Technical Analysis:
Technical analysis assumes that all known fundamentals are going to show up instantly in price action. Technical analysis therefore is simply a short cut way of taking into account the fundamentals and more importantly takes into account human psychology.
The equation for market movement is:
Supply and demand factors + Human perception (investor psychology) = Price action
Forex Trading:
The futures trading allow traders to hedge against fluctuations in exchange rates that could make vulnerable their transactions. However, most traders use this type of contract to speculate, and so can take advantage of variations of the same exchange rate. Futures contracts require participants to buy or sell at the agreed date, which allows them to cover their operations.
The investor's goal in Forex trading is to profit from foreign currency movements. Forex trading or currency trading is always done in currency pairs. For example, the exchange rate of EUR/USD on Sep 26th, 2003 was 1.0857. This number is also referred to as a "Forex Rate" or just "rate" for short. If the investor had bought 1000 euros on that date, he would have paid 1055.70 U.S. dollars. One year later, the Forex rate was 1.2033, which means that the value of the euro (the numerator of the EUR/USD ratio) increased in relation to the U.S. dollar. The investor could now sell the 1000 euros in order to receive 1208.30 dollars. Therefore, the investor would have USD 122.60 more than what he had started one year earlier. However, to know if the investor made a good investment, one needs to compare this investment option to alternative investments. At the very minimum, the return on investment (ROI) should be compared to the return on a "risk-free" investment.
Risks On The Internet:
These are the risks associated with the use of Internet-based processing system implementation, but not limited to, failure of hardware, software and Internet access. GFM is a signal from the reception or direction of the Internet, and the composition of your equipment or reliability of communication, we can not be responsible for communication error, error or delay in the trade on the Internet. The GFM systems in cases of emergency and contingency plans and the possibility of system failure, and trade via telephone are always available.
