Essay on Forex Trading. Composition Writing on Forex Trading
Risk in the Forex Market
You're in the market to
make money, but you realize there's some risk involved. Perhaps you
even enjoy the thrill of the game – the bigger the risk, the bigger
the rush. Unless you have limited funds, though, you won't be in
the market for long. So how can you balance your need for the
excitement for a big trade versus the need to make some money?
Develop a trading plan that addresses both risk and reward, as shown
Utilize stop orders
Even before you make that
first trade you should clearly define your limits. Don't wait until
you're sitting down late at night in front of your computer waiting
to place trades on your Forex system platform. Jot down on your
trade journal (or whatever recording system you use) your limits for
both buying and selling different currencies. If you buy USD/EUR at
a certain rate, then know when to place your stop order (maximum
limit) to sell. Suppose you buy USD/EUR at .6436 and you place a
stop order to sell at .6422. What you've just done is to remove the
“emotion” factor from the equation – you're pulling yourself out of
the market before you even lose more by trying to make up for the
loss. Essentially, your pride is taken out of the picture.
Consider OCO (one-cancels-the-other)
If you want exercise
control on the flip side as well (protecting your profits), then
consider using the OCO order. Basically, this type of order keeps
you positioned within a pre-defined range. It limits your losses
while also protecting your profits. It's used when you feel less
confident in controlling your need to earn bigger and bigger
profits. Here's an example how it works.
Let's say you buy EUR/USD at 1.5568.
You want to limit your losses while at the same time protect your
gains so you place the following OCO order: a sell-stop order at
1.5548 (sell euro when it reaches this rate) and a sell-limit order
at 1.5589 (sell euro at this upper limit). By placing an OCO order,
you've kept within your pre-determined guidelines.
Discipline and realistic expectations
It takes time, patience, and
discipline to succeed in the Forex market. Unless you'll really
lucky, it won't happen overnight. Be realistic with your return on
investment expectations as well and you'll have a more enjoyable
experience investing in the Forex market.
Invest in the Forex market on one of
the many online <a href=http://www.fx-auto.com>Forex
trading system</a> platforms available on the web today. Placing
orders is extremely convenient and most online brokers don't charge
commissions outside the quoted spread.
to Forex Trading
Welcome to the first part
of my forex course. What I want to achieve with this is to enable a
“non-trader”, someone with absolutely no experience of trading, to
follow a simple set of steps that leads to them becoming a
competent, confident and profitable trader with the least amount of
I want to keep this
really, really simple. Trading is complicated by the “experts” to
make people believe that they need to listen to their advice and
analysis. The truth is that there is no need to complicate things
with obscure technical indicators and “advanced” analysis. I’ll set
out now exactly what it is that traders do. Traders buy when they
think the price will go up so that they can sell later at a higher
price for profit. Traders sell when they think the price will go
down so they can buy later at a lower price for profit. In a
nutshell that’s all we do as traders. It is only a fraction more
complicated than that. The key question is “how do we know when to
buy or sell and when to take our profit?” That’s the question I hope
to answer as simply as I can.
I’ve broken the stages we
need to go through down into steps. The first step is to get our
head around some basic concepts. Questions such as “what is forex?”
There are hundreds of websites that will provide the answers to
these questions with varying degrees of clarity but I have set out
below the best definitions I can find of the concepts that I need
you to study and understand before we go on to discuss the method in
full. I’m in the process of writing out these definitions in my own
words but for the moment let’s use the resources we’ve got available
for sake of ease.
Once we’ve got the basic
concepts down I want to spend 5 or 10 mins on yahoo/msn/whatever to
check that you’ve understood everything so far. There are some ideas
in there that may not be obvious to everyone.
me to check full understanding
with me to go through setting up the charts and price action.
discussion on UKBT, yahoo/msn sessions and follow up skype calls if
It will definitely take
you some time, maybe 6 months, maybe longer to be comfortable with
setting the charts up and spotting trading opportunities from them
but I firmly believe that once you get the hang of it you’ll be
taking small but steady profits from the markets month after month.
Nb: Don’t open an account
with anyone yet, that’s coming soon.
I’ve looked all over the
internet and can’t find a better introduction to forex than this
Not all of the
information there is relevant but to get you started I would like
you to read the following sections…
Another book on
candlesticks and patterns is here…
Also read this…
That should get you up to
speed pretty quickly with what you need to know before we go any
further. Don’t forget we’ll be going through all of this together to
make sure you understand everything and are ready to proceed. If you
have any questions you can always email or pm me and I’ll answer
them as we go along.
Once you’re ready to go
on to the next stage then email or pm me again and I will send you
the next bit.
Thanks for reading, Ted.
Forex Trading Strategy
The Foreign Exchange Market is an inter bank spot market for
currency. It is run, bound to a network of banks, electronically,
all through the day. It is commonly known as the market closest to
absolute ideal competition, which is affected by any alteration in
rates made by the central banks.
About ten years back, currency trading had high obstacles to
function, so the access to the tools and systems required to trade
in the forex market was only provided to large banking and
institutional firms. But now, technology has been developed to this
level that any individual investor can jump into the trade with any
of the online platforms.
Forex trading is carried in currencies of different countries
and the instances of buying or selling are carried out in spots and
futures. While using spots trading, currencies are delivered
and paid for immediately after a sale and that futures are contracts
for assets (shares).
The business of currency trading is very profitable, if done
with proper intelligence. Forex is usually traded based on a Forex
trading signal or Forex alerts.
The foreign trading signals help to build up the forex
strategy system, which are sent for two types of currencies; Western
and Asian. Trading Signals for Asian countries are sent out in the
night, where as for western countries, they are sent in the day.
Forex trading is always done in currency pairs. Two
currencies that make up an exchange rate are called currency pair.
Investors who trade currency pairs require rapid buy and sell
Forex signals. External factors like trade reports, GDP,
unemployment, manufacturing, international trade etc. affect the
forex currency trading.
Forex currency trading has an advantage over stock market.
Statistical information affecting a particular currency becomes
known to everyone in the trade. Also there are many forex
trading signal platforms online to get information and act within
To become a successful trader, all you must know is how to limit
risks, while making the best constructive moves and you can do
wonders with forex.
Exchanging one currency for another is known as currency trading and
the quoted price is now many of one currency is worth one of the
other currency. The forex has to play an essential role in
world economy and the need for forex will always be deific.
It encourages international trade with technology and communication.
Japan sells its products in the United States and is able to receive
Japanese Yen in exchange for US Dollar. It is all possible only
because of forex trading.
Right trading techniques and tactics help the traders make immense
profits in forex market. The main foreign exchange market
turnover is broken down as spot transaction, outright forwards,
forex swaps and gaps in reporting. The foreign trading signals
help to formulate forex strategy system. Forex trade
can be carried out easily based on daily foreign trading signals
offered by foreign trading internet portal. Central banks have a
significant role to play in the forex market as they are
responsible to change the country's "base" interest rate. A central
bank maintains the rise in the economy in harmony with inflation,
thus creating a good equilibrium in interest rates. It is the bank's
decision whether to increase, cut, or hold the interest rate.
For more information about forex strategy system, forex
forex alerts, forex signal, currency trading, forex
trading signals, visit:
Introduction to Foreign Exchange Trading
This is an exciting world. There is hardly anything like foreign
exchange trading which provides round the clock home based business
Working 24 hours a day from anywhere in the world, working with just
a computer, with no boss, no employees, no office, no infrastructure
and no big capital, online forex trading furnishes endless work from
Forex trading is a $2.5 trillion a day industry. Any other market
like stock trading has much less volume, restricted hours of
business and numerous factors to deal with.
As against stock trading, in forex trading, one has to concentrate
just on 4 major currency pairs and pure technical analysis. The
average daily range of 104 pips for all four pairs far surpasses
that of any stock trading market.
Though there are risks associated with forex trading, if learned
properly, there is potential for big profits. Given the vastness of
this industry, there are numerous experts in this field revealing
their strategies for success.
We had heard of mini accounts, but now we have even super mini
accounts. With this, one can start forex trading with as little as
$50, with little risk and within five minutes of registering with an
online forex trading company.
No other type of online trading offers such a huge potential. Take
stock market alone, one will need thousands of dollars to start
Leverage factor in currency exchange trading is very huge. With just
$1,000, you can have the capacity of doing hundred times more
business, i.e. $100,000. Using a $1000 to buy a forex contract worth
$100,000 is leveraging. In this case only $1000 is at risk, but the
potential for gains is immense.
The beauty of forex trading is that here one can operate in all
major markets of the world. With different time zones, one can
virtually do trading in 24 hours a day. Forex market never sleeps.
One important strategy of profiting from forex market is to follow
technical analysis. This strategy alone predicts peaks and troughs.
If one can catch a trend, this may bring in substantial profits to
any forex player.
There are numerous online brokers. While selecting one, main factors
to be kept under consideration are the ease of doing trading, online
tutorials, instructional material, easy transfer of funds, facility
of trading in major markets and currencies, expert advice, low
transaction fees, flexible accounts, availability of mini accounts
One has to be careful in selecting an online forex broker. He should
take care of novice and professional traders alike. A new forex
trader should be able to find the ease of trading and timely
One main benefit of forex trading is that it is simple to follow
unlike stock trading where one has to study thousands of stocks.
This market meets the test of highest liquidity. With currency
trading, one can trade and exchange millions of dollars in seconds.
Online forex trading is really thrilling. It is always live. You can
not overstretch in this market. It has a relatively straightforward
and short learning curve.
If you are seriously interested in any online home based business,
then you must consider forex trading option. Many forex trading
platforms offer mock trading. You can do free live mock trading and
test your skills. Once you feel comfortable, you can start real
There is no cost associated in joining any online forex trading
system and testing their services. This can be a highly profitable
Forex currency trading is one of the fastest growing industries in
the world. Under this system, 24 million dollars of business is done
You can also participate in this amazing venture within 5 minutes of
joining. For more information and details, please follow the
The author has background in business, economics and finance. He is
presently researching in finding ways to make money and working on
the following website and blogs:
Forex Trading Course
Forex is an abbreviated name for "foreign exchange." The
Forex trading market is an around-the-clock 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 Canadian Dollars for Japanese Yen. Forex trading
market conditions can change at any moment in response to real-time
events, such as political unrest or the rate of inflation. The
purpose of this article is to give you an introduction to Forex
Here are some of the unique features of Forex trading that
attract private investors just like you:
Accessibility: The Forex trading market is open 24 hours a
day, 6 days a week. You have non-stop online access to global
Forex dealers through your home computer. This enables you to
log in to your account and trade anytime, from anywhere.
Low margin requirements: Margin is referred to as the collateral
needed to facilitate a deal. In Forex trading, this is
usually a very small portion of the entire deal, say 1% or 1:100.
For example, if your margin is $100 (1% of the entire Forex deal in
this case), you could control $10,000 of currency contracts.
However, margin is a "double-edged sword." Without the proper use of
risk management tools (that is, stop-loss and take-profit orders),
you can experience substantial losses as well as gains.
Risk management tools: Essential for any successful Forex
trading system, these tools include "stop-loss" and "take-profit"
orders. A stop-loss order is a market order to close a Forex
position if or when losses reach a pre-determined threshold. A
take-profit order is a market order to close a Forex position
if or when profits reach a pre-determined threshold.
Zero commission trading: Unlike equities or futures trading, you pay
no commissions on the Forex deals that you make.
Liquidity: Forex is the most liquid market in the world, thus
making it easy to trade most currencies.
Here are some more facts about Forex trading:
According to The Wall Street Journal Europe, the most actively
traded currencies on the Forex trading market are the U.S. Dollar (USD),
the Japanese Yen (JPY), the Euro (EUR), the British Pound (GPB), the
Swiss Franc (CHF), the Canadian Dollar (CAD), and the Australian
The most heavily traded "currency pairs" are the U.S. Dollar and the
Japanese Yen (USD/JPY), the Euro and the U.S. Dollar (EUR/USD), the
U.S. Dollar and the Swiss Franc (USD/CHF), and the British Pound and
the U.S. Dollar (GBP/USD).
Ten financial institutions account for nearly 73% of the total
Forex trading market volume. The Top 10 most active traders
include Deutsche Bank (17.0%), UBS (12.5%), Citigroup (7.5%), HSBC
(6.4%), Barclays (5.9%), Merrill Lynch (5.7%), J. P. Morgan Chase
(5.3%), Goldman Sachs (4.4%), ABN AMRO (4.2%), and Morgan Stanley
The five major Forex trading centers are London, New York, Tokyo,
Sydney, and Frankfurt. The three major Forex trading
countries are the United Kingdom (32.4%), the United States (18.2%),
and Japan (7.6%).
Forex traders generally plan their trading strategies around
two types of Forex analysis: fundamental and technical.
A fundamental analysis uses economic and political factors, such as
unemployment rates, interest rates, or inflation, as a means of
predicting currency movements. Fundamental analysis is concerned
with the reasons or causes for currency movements.
A technical analysis uses historical data as a means of predicting
currency movements. The technical analyst believes that history
repeats itself over and over again. Technical analysis is not
concerned with the reasons for currency movements (for example,
interest rates or inflation). Instead, it believes that historical
currency movements are a clear indication of future ones.
Some Forex traders depend on fundamental analysis while others
depend on technical analysis. However, many successful Forex
traders use a combination of both strategies. However, the important
point to remember here is that no one strategy or combination of
strategies is 100% certain.
As with stocks and mutual funds, there is risk in Forex
trading. The risk results from fluctuations in the currency exchange
market. Investments with a low level of risk (for example, long-term
government bonds) often have a low return. Investments with a higher
level of risk (for example, Forex trading) can have a higher
return. To achieve your short-term and long-term financial goals,
you need to balance security and risk to the comfort level that
works best for you.
Gregory DeVictor is a consultant who has been developing and
marketing web sites since 1999. You can learn how to profit trading
Forex and how to set yourself apart from 95% of all Forex
traders at: [http://www.forex-trading-system.name/forex_trading_courses_online.htm]