Questions and Answers

Posted by atha

If you’re a potential investment player who’d like to make it big in the business and financial world, then you go for forex trading. The FOREX, also known as the foreign exchange market is one of the largest financial markets in the world with and estimate of $1.5 trillion turn-overs every day. Here are a few strategies on how to make it big in the forex market.

Strategy One: Know your market. The best way to get advantage, earn profit and minimize losses is to familiarize yourself with the market and how the whole system works. In the forex market, the players are usually commercial banks, central banks and firms involved in foreign trade, investment funds, broker companies and other private individuals with large capital. With the speed and high liquidity of asset, most companies engage in this business than in any other trading venture. Transactions are done in a jiffy; there are no membership fees and there is always the allure and promise of big, big profit.

Trading is done in pairs. The most commonly traded currencies are usually the US Dollar, Japanese Yen, Euro, British Pound, Canadian Dollar, Australian Dollar and the Swiss Franc. The more commonly traded currency pairs are the US Dollar and the Japanese Yen, the Euro and the US Dollar, the Swiss Franc and the US Dollar. In Forex trading, everything is speculative and virtual. There is no actual product being sold or bought. The activity mostly consists of computed entries made on the value of one currency against another. Say for example, you can buy Euros with US Dollar, hoping that the Euro will increase it value. Once its value rises, you can sell the Euro again, thus earning you profit.

Strategy Two: Learn the language. There are three concepts you need to know in the currency market. Pips refer to the increase of one hundredth of a percent of the value of the currency pair you are trading. Usually each pip has a value of $10 or $1. Volume is the quantity or amount of money being traded at one particular time in the market. Buying is the acquisition of a particular currency. A trader buys with the hopes that the price of the currency will increase. Selling is putting a currency up for grabs in the market because of a potential or possibility of a decrease in its value. There are also two techniques of analysis usually used in this business – the fundamental and the technical analysis. Technical analysis is usually used by small and medium players. Here, the primary point of analysis revolves on the price. Fundamental analysis, on the other hand, is used by bigger companies and players with higher capital as it involves looking at the other factors affecting the value of a particular currency. In this type of analysis, the player also looks at the situation of the country, particularly issues like political stability, inflation rate, unemployment rate, and tax policies as these are seen to have an effect on the currency’s value.

Strategy Three: Develop a sound trading strategy. Your trading strategy would depend on what kind of trader you are. The basic thing with developing a trading strategy is to identify what kind of forex trader you are. A good trading strategy should lessen, if not, eliminate losses. Plan also the size of your transactions. It is better to conduct many different trades than one huge transaction. Not only does it develop discipline, but it also lessens any possible loss as only a fraction of the capital is affected. Part of a trading strategy is developing the values of discipline and proper money management.

Strategy Four: Practice. Try paper trading, a great way to practice your skills, see how the market works and get acquainted with the software and tools being used. There are online brokers who allow free paper trades, which allows practice and experience before doing it with real money.

Strategy Five: Choose the right forex dealer. Make sure that they are regulated by the law. Take not of dealers with investment schemes that give out too-good-to-be-true-just-false-hopes promises. Look at investment offers before getting started.

Forex trading may seem easy and manageable. But the emotional stress, the demands and challenges of being a forex trader requires more than just the knowledge of the market. It requires more than just a keen and sensible head for business. It’s all about a gameplan, a strategy.

Can u tell me some good,free website to learn day trading for beginers?also dwmload fre ebook on the same.

I am a beginer in this field and would like to learn about it before carrying out trade. Please guide me to some good sites that give free basic and other necessary information on day trading. Also i want to download free ebook on this topic. Thanks.

First, if you are clueless about stocks, day trading is the last thing you should consider. That is like someone saying they are clueless about medicine and asking if they should consider a career in emergency room medicine since they hear you can make a lot of money.

Day trading is a strategy in which you buy and sell stocks during the day and close out all positions by the end of the day and make money on the volatility. Stocks are up and down all day. The idea is that you identify a trading range for certain stocks, buy when they fall into the low end of the range and sell when they get to the high end. There are many strategies, but you have to be on top of it minute by minute. If news comes out about a stock, your trading range will change and you will have to change your strategy for that stock quickly.

One of the ideas behind day trading is that news often comes out over night and if you close all your positions by the end of each day, you avoid the risk of overnight news.

However, there are two sides to every trade so for every body who makes a good trade, there is someone who makes a bad trade. This is a zero sum game. For every winner there is a loser.

How much you can make, depends on how good you are. You can make a lot or lose a lot depending on your skill. If you are clueless about stocks, you are likely to lose. Although some would argue that day trading is all luck anyway and if that is true, you might do as well as anyone.

Sometimes people make a lot of money over a period of time because they pick up on a trading pattern that persists for a period of time. However, it can end as quickly as it appears and you can lose a lot of money in a hurry.

You also need siginificant capital to make a living at this. How much capital depends on how successful you are and how aggressive a trader you are.

You do not make a salary unless someone hires you to day trade their money. Obviously no one is going to hire someone who is clueless about stocks to day trade their money for them.

Generally the same stocks are available at all online brokers. The only exception would be obscure exchanges and foreign exchanges some brokers may not participate in.

Since this strategy involves a lot of trading, you are going to have to pay very close attention to trading cost. For day trading, you may want to consder a deal that allows unlimited trading for a set fee.

If you go down this road, make sure you know what you are doing. Do a lot of research. This in not a game for beginners.

Forex Profit Matrix Review