Investing in forex trading

FOREX TRADING

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What are Forex
by Bill Poulos

1. Forex Basics : A brief overview of the basics of Forex?
Unlike stocks and futures that trade through exchanges or the NASDAQ, Forex trading is done through market makers that include major banks as well as small to large brokerage firms located around the world who collectively make a market on a 24/7 basis.

2. Forex Market : How do the Forex markets operate on a 24 hour basis?
Active trading sessions in each country’s’ financial centers around the world take place from Sunday 5:00PM EST to Friday 5:00PM EST. For the major financial centers, trading starts in Sydney, then moves to each financial center in this order: Tokyo, London (and Europe), New York.

3. Forex Trading : A typical forex trade scenario
Let’s say the current bid/ask quote for EUR/USD is 1.3802/05 and you want to buy the pair because you think the Euro is going to gain on the US dollar. So you buy 1 standard lot.

4. Forex Orders : How much can one expect to make with Forex trading?
It is very important to have realistic expectations. The truth is that Forex trading is not a get rich quick proposition

6. Forex Risks : Forex seems to be quite different from trading stocks. Benefits and risks in comparison and would a much bigger account be needed?
In addition to the Forex attributes explained in the “basics of Forex question” above, the Forex markets are indeed different from the stock markets in that their price behavior is different with usually more abrupt price swings.

7. Forex Broker : How to find a reliable Forex broker?
Unlike stock and futures brokers, not all Forex brokers are regulated. It is very important to open an account with a regulated broker or bank that is a registered member of a regulating body.

8. Forex Currency Pairs : What are the best Forex pairs to trade?
Not all Forex pairs are suitable for trading. What we should be looking for as traders are liquid markets that have sufficient price movement to make a trade worthwhile. With that in mind, the following pairs are the most widely traded, most liquid pairs and the only ones that I would consider trading: EUR/USD – Eurodollar / US dollar

9. Forex Software : What is the best trading platform and charting software for both beginners and more experienced traders alike and where should one obtain the most reliable data?
The answer to this question starts with your broker. Open an account with a registered broker. Having said that, most Forex brokers provide, “free of charge”, an online trading platform that is integral with decent charting software.

10. Forex Techical & Fundamental Analysis : Is it better to use fundamental or technical analysis with Forex trading?
The answer to this question depends on your trading method. The markets are indeed moved by fundamentals (balance of trade data, money supply, interest rates, economic and financial reports, etc.) but only through the prism of human psychology.

11. Forex Charting : How is it possible to trade the Forex markets on an end‐of‐day basis using daily bar charts when the markets are always open?
Most good charting software and trading platforms provided by a good broker or bank include the ability to plot daily bar charts where the daily bar “closes” at 5:00PM EST.

12. Forex Trading Methods : What are the attributes of a good Forex trading method?
A good trading method should be as simple as possible to provide a powerful edge to the disciplined trader that is based upon specific setup conditions, entry rules, initial stops, and exit strategy.

13. Forex Technical indicators : What are the best technical indicators to use?
There are at least over 100 technical indicators available in most charting software packages. There is no magic in the indicators themselves as they all strive to tell you something about how the market is behaving at a point in time.

14. Forex Strategy : What simple strategy to use to find good entry points?
The general approach use is to develop specific setup conditions that, when present in the market, indicate that should be consider entering into a new position.

FOREX ARTICLES
Five Characteristics of the Prosperous Forex Trader

MORE ABOUT FOREX TRADING

The forex market
The Foreign Exchange market, or the Forex (FX) market as it's more commonly known, consists of many major world currencies. These currencies are traded worldwide, around the clock, over a facility known as the Forex/FX Spot Market.The currency trading (FOREX) market is the biggest and fastest growing market on earth. Its daily turnover is more than 2.5 trillion dollars. The participants in this market are banks, organizations, investors and private individuals, just like you. [ click here to read full market background by Easy-Forex ].

The goods (merchandise)
The U.S. Dollar is one of the largest foreign exchange (FX) currencies traded on the Forex markets across the planet. Other foreign currencies, or spot currencies as they are commonly called, traded on the Forex (FX) markets are the Australian Dollar, the Japanese Yen, British Pound (CABLE) and the European Union Euro. The Euro, British Pound, and Yen are three of the major four foreign exchange currencies traded. The fourth of the major currencies, and arguably the largest of all Forex trading currencies, is most certainly the U.S. Dollar. Markets are places to trade goods, and the same goes with FOREX. The Forex goods are the currencies of various countries. You buy Euro, paying with US dollars, or you sell Japanese Yens for Canadian dollars. That's all.

How does one profit in Forex?
Obviously, buy cheap and sell for more! The profit potential comes from the fluctuations (changes) in the currency exchange market.
The nice thing about the FOREX market, is that regular daily fluctuations, say - around 1%, are multiplied by 100! (in general, Easy-Forex offers trading ratios from 1:50 to 1:200).

How risky is Forex trading?
You cannot lose more than your "margin" (your initial investment)! You may profit unlimited amounts, but you never lose more than what you initially risked. However, risk only what you can afford and is not vital for your well-being.

How do I start trading?
Register (Easy-Forex™ offers the simplest and quickest registration process, no obligation); deposit your first trading "margin" amount (credit cards are welcome, only by Easy-Forex); start trading.

How do I monitor my Forex trading?
Online, from anywhere, anytime. You have full control to monitor status, check scenarios, change some terms in the deal, or close it.

Want to know more? Want to get on-line training? Register here (quick, no obligation), we'll be glad to guide you, every step of the way.

Get started on your forex trading education here

MORE FOREX TRADING RESOURCES

Forex trading
Forex trading guide with many articles, tips, forex brokers comparison and many more. Learn to trade like the pros with Forex Trading Plus.

Currency Converter
- Discount-Currency-Exchange.com offers discount foreign exchange, and historical foreign exchange rates