Forex Trading: Learn How To Read A Forex Quote

By: Gregory DeVictor

Forex is an abbreviated name for "foreign exchange." The Forex market is a non-stop cash market where the currencies of nations are bought and sold, typically via brokers. For example, you buy Euros, paying with U.S. Dollars, or you sell Euros for Japanese Yen.

The value of your Forex investment increases or decreases because of changes in the currency exchange rate or Forex rate. These changes often result from economic and political factors, such as the price of oil or political unrest. To better understand how the exchange rate can affect the value of your Forex investment, this article shows you how to read a Forex quote.

Forex quotes are always expressed in pairs. In the following example, your "pair" of currencies are the U.S. Dollar (USD) and the Euro (EUR). The Forex quote, USD/EUR = 265.50, means that one U.S. dollar is equal to 265.50 Euros. The currency to the left of the / (USD in this case) is referred to as base currency and its value is always 1. The currency to the right of the / (EUR in this case) is referred to as the counter currency. In this example, one USD can buy 265.50 EUR, since it is the stronger of the two currencies.

Because the U.S. dollar is regarded as the central currency of the Forex market, it is always treated as the base currency in any Forex quote where it is one of the pairs. Incidentally, the U.S. Dollar is involved in nearly 90% of all Forex transactions.

[Read full article]

A Forex Signal That Is Absolutely Critical For Success

By: Michael A. Jones

Support and resistance is such a powerful Forex signal that without understanding its impact on the market, a trader will probably never master the skills necessary to make profits on a consistent basis.

This Forex signal simply registers where price reached a peak or a low. On a higher time frame these price levels can have huge significance. Why?

Getting Behind The Scene

We need to understand what is going on behind candle patterns and price movements. Imagine thousands of traders coming to their desks each day all around the world and processing orders involving billions of dollars worth of currency.

The price at which they bought the currency now represents a key level for them. They do not want to see price go in the opposite direction or they will be at a loss. So what happens? They do everything possible to protect that price level.

The daily chart is of particular importance when considering support and resistance as a Forex signal. Traders associated with big institutions often refer to the daily chart rather than lower time frames. So price highs and lows on a daily chart can represent key, strategic price levels.

If price reached a high within the last few days, you can be sure a number of traders have millions or even billions of dollars worth of currency tied up at around that level or below it. For price to go above that high there is going to have to be considerable buying pressure from the bulls. Obviously the converse is true when price reaches a new low.

So look at the higher time frames like the daily, and 4 hour charts and identify these key levels of support and resistance. They form a major Forex signal.

[Read full article]

What is Forex Trading?

By: T. Houser

Trading has taken a lot of routes in the modern world as more and more avenues open up for earning money. However, there are always certain trading methods which remain a mystery to people. One such trading method is the Foreign exchange trading, where each transaction seems to be a new kind.

Even for a well versed stock market trader, forex market poses great challenges. Therefore extra care has to be taken in forex trading. For playing safe and making money or atleast to ensure that the loss is minimal, what is important is to have adequate forex trading information.

An international market called the forex market exists where people can trade i.e. buy or sell foreign currency at prices determined by demand and supply conditions. Speculations made in the forex market are a means to make maximum profits if one is equipped with proper Forex Trading Information.

The first thing to know about forex trading is the requisites for purchase or sales. In today's technically developed market scenario, one needs to have only a computer, a small initial investment and an analytical ability to watch and perceive movements in forex prices.

[Read full article]

Forex Low Cost Options Available

By: Elby Tineo

This interesting article addresses some of the key issues regarding forex. A careful reading of this material could make a big difference in how you think about the forex market.

There are discount commission brokerages, charting resources, free news, and free analysis packages concerning Forex. This has become a downright scary situation in which securities regulators are in over their head. Many brokers have different types of accounts to match the needs of individual investors. Ultimately a measure of market psychology is needed to achieve success.


By using several non-correlated systems. By using numerous automated strategies. You don't need a lot to get started with forex trading. Make sure that you get your financial goals.

This has become a "trader's market" but only for the adroit. There are dealers who will quote currencies. Many brokers have found that their customers can benefit from following live trading accounts. It is true that they will tell you that a one or 2 pip spread exists on a specific currency pair. However some traders do forex-trading strategies that trade short term on the reactions to different news releases.

Be sure you are in touch with reality as far as your expectations and goals and other practical considerations. This trading method is so effective that your broker will think you can see the future. The majority of traders lose because they cannot control their emotions. Even though this market trades twenty four hours there are better times to trade.

[Read full article]

Keep Your Shirt On- Skirt Those Forex Scams

By: Joseph Plazo

Whenever there is an opportunity to make large amounts of money, there will be people who are eager to jump right in and start making money. And where there are people who are eager to get rich quick with a minimum of effort on their part, there are fraudsters waiting to take their money. Experienced traders are wise enough to avoid the frauds - it's the new traders who are most vulnerable to the forex scams that are slipping into the currency exchange market.

The U.S. CFTC (Commodity Futures Trading Commission), which regulates futures and commodities trading, warns new investors to be wary of frauds and scams that promise huge profits from your investments, in and out of the Forex market. The CFTC has issued several Consumer Fraud Alerts in connection with foreign currency trading. They offer the following tips to help you avoid being scammed.

Be skeptical of high-profit-low-risk come-ons.

"I made $1900 in one minute!" touts one sidebar ad for a Forex trading company. Ads that promise high returns on small investments with little or no risk to you are tempting bait. The fact is that while there are certainly big profits to be made in forex, there are correspondingly large losses. And most novice traders drop out of active trading by the end of their first year because they can't afford the risk.

Be suspicious. Period. Before you part with a penny, thoroughly check out the company or trader you're planning to do business with. Check the CFTC's consumer fraud alert page. Check to see if the company is registered with the CFTC, or is a member of the National Futures Association. Check to see if there's any disciplinary action against the firm or company. Get even more basic. Get a valid address and telephone number, and verify that it belongs to the company. Check to be sure the person you're dealing with actually works for the company. Especially if you're doing business on the Internet, it's very easy for a scammer to fake credentials.

[Read full article]

Forex Managed Accounts Explained

By: Dean Forster

Do you want to trade in the highly liquidated and extremely profitable foreign exchange market, but don't want to learn all those terms, charts, indicators, and technical details that you need to be successful on your own? Then maybe you're looking for forex managed accounts. Don't know what that is? Then keep reading; maybe you'll learn a thing or two after all.

Forex managed accounts are as simple as they sound: accounts in the foreign exchange market which are managed by a trader, paid for by an investor, and result in lots of good money. There are two kinds of forex managed accounts, and each has its own advantages and disadvantages when it comes to trading in the market. It's up to you which you pick.

The first type of forex managed accounts is the robot, or the automated account. This completely automatic program is designed by experienced traders in the forex market and supplied to the investor for simplicity. This is clearly the most efficiently managed account available to you, as it takes into consideration all indicators and statistics open to it. When the time comes, the robot receives a signal--and trades. It's that easy. However, robots do lack an instinct--which can be a good thing, if you're hoping to avoid emotional trades, or a bad thing, if you want someone who'll take advantage of a huge opportunity.

[Read full article]

Choosing The Right Broker: The First Step To Forex Success

By: Hugh Gordon

As the online Forex trading market becomes increasingly saturated and the choice of brokers becomes wider, the decision of which broker to run with becomes increasingly important for the trader. Although the majority of brokers provide the same basic trading platform, there can be a vast difference in what they offer their clients, both in terms of trading conditions as well as customer support. By simply visiting a company's homepage it may be hard to separate the second-rate firms from the professionals, therefore this article will examine the main parameters that should be taken into consideration before creating an account and depositing.

Account type

The decision of which type of account to open will most likely depend on the amount of capital you have to invest. Most brokerages offer two main account types: a "Mini" ($100-$200 minimum deposit) and a "standard" account ($1,000-$2,000 minimum deposit). Mini accounts are best suited to new or amateur traders looking to gain market experience and confidence with a smaller investment, and offer higher leverage, which you'll need in order to make money with such a small amount of initial capital. "Standard" account holders can expect to enjoy a wider variety of leverage options, but will have to invest a greater sum of money for the privilege. Although not as commonly advertised, many brokers provide a premium service for large investors (perhaps $100,000 - $250,000+), including additional VIP services, such as a dedicated fund manager and tailor made conditions.

Common to nearly all online brokers is the offer of a demo account, which allows users to get a feel for the software and gain trading experience without the risk of market exposure. Such simulations are undoubtedly beneficial to potential clients wishing to test the waters, but caveat emptor: they are not always representative of real-market, real-platform conditions, despite claims of full functionality. Do not be afraid to question a brokerage on this matter - an honest, reliable broker will admit the downfalls of a demo account.

[Read full article]

An Example Of A Forex Trading Plan

By: Jovan Vucetic

Forex currency trading is a zero sum game and those traders with a trading plan and the necessary discipline to stick to it will succeed over those that trade without one. If you want to be on the positive side of this game, start with your trading plan. Here is an example of what a Forex Trading Plan should look like:

Goal

My goal is to make 20 ticks or $200 per day over the 20 day trading period.

Market

My target market is the EUR/USD spot market. Trading style is day trading with all trades taking place between 8:30 am and 11:00 am on class days. On certain occasions I will attempt to start trading at 7:20 am due to the fact that a majority of economic data is released at 7:30 am CST. All positions will be closed at the end of class.

Research and Fundamentals

Each day before trading I will fill out a trading plan for the day. I will also research fundamental data related to the markets before I start trading. This is to get a market feel such as overall macro trends, world events, upcoming economic data. I will also look into technical data over the past several days to figure out what technical movement has been present.

[Read full article]

Technical Indicators: Why Forex Traders Should Understand Their Limitations

By: Jovan Vucetic

Forex traders often look at indicators such as Bolinger Bands, Pivot Points, MACD, Moving Averages and the such to help them determine where to enter or exit trades. Using technical indicators is fine, however many traders overemphasize their importance or just plain misunderstand them.

Many forex traders think that they can simply download an indicator and then mechanically apply it into their trading and do so profitably. This is just a plain illusion. Successful traders realize that there is a lot more to using indicators than just asking them to generate buy/sell signals or pin-point exact entry points. Technical indicators for them represent just one part of their trading strategy.

Let s take a look at some of the reasons why you should not put all your faith into those sometimes confusing little indicators.

Take Moving Averages (MA s) for example. They are supposed to show the direction of the trend. The most common and often used are the simple 200day MA, 100day MA, 50day MA, 35day MA and the 21day MA but they are only valid on daily graphs. Some forex day traders say that a good signal is when the 50day MA is crossed by the 13day MA and that when this occurs you should trade in the direction of the cross.

[Read full article]

7 Tips For Choosing Forex Brokers

By: Milton Ziegler -

The more we live the more we find out that we are dependent on many things besides our wits. Smartness will only get us so far, but unless we make use of systems set up for our convenience we are apt to fail. This is so with the Forex market. The way how the market works means we have to work through a broker or a market maker to get our trades started and completed. You can find Forex brokers in every part of the world just as you will find currencies traded in almost every corner of the globe. However, you should consider a few points when you go out shopping for the right broker to help you with your trades.

1. Qualifications. Probably the most important thing of all is ensuring the Forex broker you use has the correct qualifications. Therefore, choose a broker registered with the Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant (FCM). This means that you have legal protection against any abusive trading practices and scams that may arise.


2. Is the broker regulated? This means that when you sign up to use their services you will have protection and insurance against any internal fraud. Also, your funds will remain separate from the broker's operating funds.

3. What business model does the broker use? Some brokers are market makers while others are ECN brokers, providing a dealing desks for many traders.

[Read full article]

Forex Trading Training: Rules For Placing Orders

By: Michael A. Jones

If you have started your Forex trading training you may initially have a challenge with understanding how orders are placed. I remember when I first started reading about the Forex and practicing in a demo account, it took me a while to understand how stops and limits worked in relation to price.

This article sets out the main rules governing the placement of orders with a free graphic download in the resource box at the end which you can keep on your desktop and refer to at anytime until the rules have 'sunk in'. You will find this lesson extremely important if you are in the early stages of your forex trading training.

Here are the basics:

1. In each currency pair, the first currency is the base currency which you either buy or sell. For example, in the case of EUR/USD, if you believe the euro is going to strengthen against the US dollar you would place a BUY order (go long). If you believe the dollar will strengthen against the euro, you would place a SELL order (go short) for the EUR/USD currency pair.

2. In your dealing station you will notice two prices quoted for each currency pair, a BID price and an ASK price. The difference in the two prices is known as the pip spread the dealer takes from every trade. For the major currency pairs this can be between 3-5 pips. NOTE: When you place a BUY order you will enter the trade at the ASK price. When you place a SELL order you will enter the trade at the BID price.

[Read full article]

Forex Trading - An Introduction

By: Michael Kerr

Forex is an abbreviation for Foreign Exchange, the system by which one currency is exchanged for another. For such reasons, an exchange rate needs to be established between currencies of all countries. Generally, all currencies are expressed in terms of U.S. dollars, while the U.S. dollar itself is commonly quoted in the Japanese yen, British pound and the Euros.

Here is an example to depict why foreign exchange service is required. A person traveling from the U.S. to Australia would require the Australian currency during his stay there. He would then be required to go to a money exchanger and get dollars exchanged for Australian Dollars at the exchange rate existing on that day.


How Forex Trading Works

All trades related to foreign exchange are based on purchasing one kind of currency against another. This gives rise to the concept of pairs like the Euro/U.S. Dollar. The first currency in the pair is referred to as the base currency (the one that provides a baseline for the purchase or sale) while the second one is termed as the counter or quote currency. While buying, an exchange rate specifies how much should be paid in the counter or quote currency to obtain one unit of the base currency whereas selling involves how much shall be received in counter or quote currency upon selling one unit of the base currency. The 15 important currency pairs are EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, EUR/JPY, EUR/GBP, EUR/CHF, GBP/JPY, AUD/JPY, CHF/JPY, EUR/AUD, GBP/CHF, and NZD/USD . Foreign exchange quotes are a relation between currencies. For example, quote USD/JPY 108,91 would mean that 1 U.S. Dollar costs 108,91 Japanese Yens. The forex market is considered the largest and most liquid market in the world, trading around $2 trillion on an average every day. It is larger than all equity markets combined.

[Read full article]

Technical Indicators: Why Forex Traders Should Understand Their Limitations

By: Jovan Vucetic

Forex traders often look at indicators such as Bolinger Bands, Pivot Points, MACD, Moving Averages and the such to help them determine where to enter or exit trades. Using technical indicators is fine, however many traders overemphasize their importance or just plain misunderstand them.

Many forex traders think that they can simply download an indicator and then mechanically apply it into their trading and do so profitably. This is just a plain illusion. Successful traders realize that there is a lot more to using indicators than just asking them to generate buy/sell signals or pin-point exact entry points. Technical indicators for them represent just one part of their trading strategy.

Let's take a look at some of the reasons why you should not put all your faith into those sometimes confusing little indicators.

Take Moving Averages (MA s) for example. They are supposed to show the direction of the trend. The most common and often used are the simple 200day MA, 100day MA, 50day MA, 35day MA and the 21day MA but they are only valid on daily graphs. Some forex day traders say that a good signal is when the 50day MA is crossed by the 13day MA and that when this occurs you should trade in the direction of the cross.

The problem with this (apart from the fact that it only works on daily graphs) is that these types of crosses do not occur often enough for traders to exploit them. This can often lead to a situation where traders are seeing what they thought was a cross now reverse and uncross. Even worse, it can lead to a situation where day traders are chasing and trying to anticipate a cross. If you are doing this, you are distancing yourself from the market which you are trying to trade. Not only are you trying to guess what the price is going to do next but you are guessing what the indicator, based on the prices, is going to do next.

[Read full article]

Learn Forex - How To Make Money Trading Forex, The Trade Process

By: Tom Leroy

On the forex market we are trading currencies, exchanging a currency for another. So we buy a currency hoping its value will increase compared to the value of the one we are selling. Yes, we, at the same time, buying a currency and selling another currency. An example may be a little more understandable.

We have dollars and want to buy euros. The pair traded here is EUR/USD, and the exchange rate is 1.25. You can read it like this : 1 euro equals 1.25 dollar.


We hope that the euro value will be higher so that later we will buy more dollar. The exchange rate increase to 1.35, in this case we bought 1 euro using 1.25 dollar, and it now equals to 1.35 dollar. So we exchange our 1 euro back into dollars and now have 1.35.

We bought 1 euro for $1.25 and sell it back for $1.35, we made a 10 cents profit. Of course on the forex market you will not buy only one euro, this will be few hundreds or thousands, depending on your budget and the leverage offered by the broker.

[Read full article]

Factors Involved In Becoming A Successful Forex Trader

By: Nathan Young

These days everyone is talking about Forex trading and the great opportunity this activity represents for people willing to brake free from the corporate world and start working from home or any where else without losing their current lifestyle and even improving it.

Forex trading has changed dramatically in the last 10 years thanks to the technological advancements of the internet era. With real-time streaming technology and faster and more efficient computer systems, almost anything, from roses to FX trading, is available at the click of a button.


Some of the great reasons why Forex trading is a great way of entering the capital markets is that your trades are all commission-free and it has a low transaction cost. All the best forex brokers have these characteristics and even Mini FX traders (i.e., traders starting with accounts having a capital as low as $250), who are just starting in this field, can buy and sell currencies online always commission-free.

[Read full article]

How To Use Barriers To Produce Great Trades In The Forex Market

Learning how to identify areas where many barriers exist can be very profitable for traders. Many types of price barriers exist in the Currency trading market. It is common for currency pairs to change direction at these barriers. When traders learn the ways they can put them together, traders may make a plan of trading with better chances to make good trades. Some common barriers include support and resistance levels, psychological barriers, and Fibonacci levels. Barriers on trend lines and at pivot points can also strengthen our analysis. Now we will look at the different types of barriers common in the FX market.

Support and Resistance Levels


Resistance and support levels are huge turning points that the market has consistently respected in the past. When the market respects them more, then they become stronger Support is identified as the turning point where the buyers took control and the currency pair began to rise. Resistance is any part at which the market stopped rising and dropped down. Resistance and support levels on larger time charts are considered more significant than those on smaller time charts.
[Read full article]

Forex - Who Or What Decides When To Trade?

By: Steve J Cowan

When you are looking to find a system of trading forex markets, it does not matter how many books you read, how many magazines you invest in or how many websites you browse, trying to find something 'different".

There are basically only two types of Forex trading systems, those that we might call mechanical and those that are human driven or discretionary.


In this article, we shall try to investigate which type of system is better, or, if indeed, either one can be shown to better than the other.

In general, the trading signals that are generated by mechanical systems are usually drawn from normal technical analysis techniques that are applied in an entirely rigid, automated manner.

Human beings, on the other hand, rely on experience, intuition and subjective insights to drive their trading activities.

So, is there any objective test that will tell us that one or the other method of trading works best when applied in the real world?

Well, both trading systems have both advantages and disadvantages.

We might summarize these as follows:
[Read full article]

Forex Traders - The Inside Scoop

By: Lorna Goldsborough

Forex traders make up a unique group of investors who are willing to think outside of the box. They are a group of people who understand that with inherent risk comes the possibility for great reward. A person who has mastered the ability to balance that risk with wisdom and patience can make a substantial amount of money trading forex. One important key to success is having the ability to access the most current and the best forex trading information. The development of streaming data on the internet has made this access possible.

Forex traders of all skill and experience levels are discovering the value of forex trading simulators. Nearly all of the major trading platforms now offer some sort of simulator that allows the investor to become a student and place forex trades with play money. These games, while fun, provide a valuable training ground where forex traders can try out new strategies and methods. The simulators allow them to track the success or failure of the trades that they have made. Even more important than the successful trades that they make in the simulator are the failures. This is a place where new forex traders can learn from their mistakes without suffering personal financial loss.
[Read full article]

Forex Charting - It's Not As Hard As You Think

When becoming a Forex trader you can definitely use great tools available to you, such as Forex charting. The charts produced by Forex analysis can give you great insight into different aspects of the market, including movements. By using charts in foreign exchange you can study the behavior of the market over a greater amount of time and analyze them and how they affect trading.

By using Forex charts you will be better informed as to certain patterns and trends. This advantage can help in not making rushed decisions, but instead making a more careful and weighted decision, based on the charts that Forex analysis can provide you with. This in the end can have you end up with a better decision rather than one that was too rushed and hastily made.
[Read full article]

Forex Forecasts - You Never Know What You Will Benefit From

By: Kevin Anderson

Possible risks and profits to be made can always be predicted if traders would only have more accurate forex forecast to base their trade and decisions upon. Forex forecasts are only one way of keeping up with the volatile forex market. Success will depend the most in knowing what and who will affect the rate changes.

The forex market has already been through a lot of ups and downs that even fortune tellers would have difficulty guessing what will be its next movement. Making a forex forecast can be helpful but can also be too risky. Besides, doing it is not that easy also.


In forex forecasts, nothing specific is given. The traders are not made to hope high and expect more. If you have seen or heard a forex forecast, be sure to check on some projected rate fluctuations whenever and wherever possible so you would have an idea it the forex forecast shows a likely possibility to be true or not.

Staying in touch and up-to-date with the latest news and happenings around the globe and information about the forex currency can help traders determine when is the best time to buy, sell and stay away from a particular market. All these things are important in the performance of your trade. Take note of some forex forecasts if only to serve as guide whenever you are in a situation that you find hard to make a decision upon.
[Read full article]

Currency Trading - GET Bigger Profits Now With These Simple tips

By: Sacha Tarkovsky

Do you want more and bigger consistent profits? Then this article will show you how to increase your currency trading profits.

There simple to learn, easy to apply and will ensure your forex trading strategy gets a welcome boost in profits.

Here we're going to assume you already have a methodology, you are confident in and just need to get bigger FX profits so let's look at the tips.

1. Accept Volatility and Risk

All successful Forex trading systems understand volatility and use volatility to their advantage.

You can't have a profitable Forex trading system without taking calculated risks - and taking losses.

If you can't accept risk, then don't get involved in forex trading.

Many traders try to restrict risk so much, that they actually ensure they will lose - they're simply stopped out all the time by volatility.

To make profits, the secret is to take a risk at the right time risk as much as you can. [Read full article]

Forex Trading And Its Tactics

By: Rajamuma

Trading the Online Forex market has many advantages over other fiscal markets, among the most significant are: better liquidity, 24hrs online market, superior execution, and many others. Traders and investor see the Forex market as a fresh speculation or expanding chances because of above mentioned benefits. Does this mean that it is quite simple to earn money trading the Forex Market? Not at all !

The pr cising the forex market incoming/quitting time all based on technological an analysis that is specific for very short-term life of such forex analyses. It is resolute by days, hours, and some times even by minutes, but not by weeks or months. In all the above cases, the same technological tools are used. Having successful forex trading system carries the following tactics.


Tactics for Price Breaks

There are three different trader s actions at price breaks:

To take a place in advance, predicting the break;
To open a place when the break is actually in progress;
To wait for the predictable rollback after break

[Read full article]