Forex For Newbies - A Quick Currency Trading Tutorial

The more you understand about any subject, the more interesting it becomes. As you read this article you'll find that the subject of forex is certainly no exception.

So, you want to learn how to trade currency on the foreign exchange market? The process of trading currencies appears very straight-forward on the surface but, there is more to it than meets the eye.

The currency trading tutorial you are about to receive here will give you a basic idea of how things works. However, you must keep in mind that this tutorial is only scratching the surface. The Forex market is complex, fast-paced and requires serious further study if you wish to trade successfully.

Now that we have that disclaimer out of the way, let's begin by looking at the fundamental unit involved in every trade: the 'currency pair'.

What are currency pairs?

Currency pairs are units of 2 currencies involved in a foreign exchange trade. For example, if you want to sell U.S. dollars to buy Euros, you would look at the exchange rate quoted for the EUR/USD currency pair. Or, if you wanted to sell Euros to buy U.S. dollars, you would look at the exchange rate quoted for the USD/EUR currency pair.

You might thinking: "Aren't they the same thing?" Well, they almost are, but you must look at the correct pair, in the correct order, based on the currency being purchased.

There are two reasons for doing this:

First, it is easier to calculate the results of your exchange in terms of how much of the base currency you can purchase with your 'quote' currency. Your base currency is the currency you intend to buy, and the quote currency is the currency you intend to sell in exchange for the base.

When quoting an exchange rate, your broker will list the base currency first in the pair, and the quote currency second.

This means that when you see a pair like EUR/USD, you are seeing the cost of 1 Euro in U.S. Dollars. An exchange rate quote of EUR/USD = 1.4436 means that 1 Euro costs $1.4436 in U.S. Dollars.

Hopefully the information presented so far has been applicable. You might also want to consider the following:

Likewise, the USD/EUR pair indicates the cost of 1 U.S. Dollar in terms of Euros. An exchange rate of USD/EUR = 0.6834 would mean that 1 U.S Dollar costs 0.6834 Euro.


The second reason for looking at the correct buy/sell ordered pair is that you'll want to know the difference between the 'bid price' (exchange rate) and the 'ask price' (what the market makers want for the currency).


The difference between bid price and ask price make up what is known as 'the spread'. Forex traders are subject to spreads when opening or closing trades in the buying position.


Let's say that you want to buy the EUR/USD pair. The bid price is 1.4436. The ask price may be something like 1.4440. You must pay the spread of 0.0004 in order to do the trade.


Those are the basics of a currency trade, but there are other factors to take into consideration. In order to make a profit on currency exchanges, you must also know how


to calculate the cash value of exchange rate fluctuations in terms of 'basis points' - or, in Forex jargon - 'pips value'.


This currency trading tutorial will not cover pips values, but it is a concept you should investigate further if you want to master the basics of trade on the foreign exchange.


So now you know a little bit about forex.

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The Ins And Outs Of An Online Forex Trading Platform

The following article covers a topic that has recently moved to center stage--at least it seems that way. If you've been thinking you need to know more about it, here's your opportunity.

If you are as confused as I was when I started trading currency on the foreign exchange (forex), than this article will do wonders for you. From facts on the forex to the best online forex trading platform, your questions will be answered.

If you are as confused as I was when I started trading currency on the foreign exchange (forex), than this article will do wonders for you. From facts on the forex to the best online forex trading platform, your questions will be answered.

Ok, let's go over some of the basics. What is the forex? Well, forex, the word is simply a combination of the phrase FOReign Exchange. That's it, you're ready to trade. Oh, you want more? The forex market is an electronic market where the currency of different countries are traded.

In actuality, you are trading the value of currency A vs. the value of currency B. Although you can combine any two currencies to form a currency pair, there are four currency pairs that are considered the major pairs.

They are: EUR/USD (Euro/Dollar), GBP/USD (Pound/Dollar), USD/JPY (Dollar/Yen), USD/CHF (Dollar/Franc). You can spend your entire currency trading career trading just one of those pairs.

Now for some interesting facts about the foreign exchange (forex) market. It is over 30 times as large as any other financial market. Remember this fact, we will be touching on it again later. The forex market is open 24 hours a day 5 days a week. This is a great feature as it allows you to partake in the business of currency trading regardless of where in the world you are.

Back to the size of the forex for a second. Due to this attribute, the foreign exchange market provides currency traders with opportunities that do not exist on any other trading tool. Although this article is not being written to get into too much detail about this, I'll give you an example. There is no slippage on Stop orders during regular trading hours. If you are not sure what this means, I strongly suggest you spend some time looking it up. This is a quality that, by itself, separates the forex from all other markets.

How can you put a limit on learning more? The next section may contain that one little bit of wisdom that changes everything.

So, now we get to the nuts and bolts of this article. What is an online forex trading platform?

Truth is, whether you are doing your own trading, following some form of forex trading alert or any other sort of forex trading system you are going to need an online forex trading platform.

Regardless of which forex broker you choose, you will be provided with some form of online forex trading platform. Usually, the trading platform will be the same whether you are trading mini contracts or full contracts.

What should an online forex trading platform provide?

Firstly, you should be able to see the value of your account at a quick glance. Also, you should be able to see how much money you have in the market and in what currency pair at any given time.

Secondly, the value of all currency pairs of interest to you should be right at your fingertips. This means that you should be able to define which currency pairs you want to have access to and you should be able to choose the look and feel of the quotes.

Thirdly, an order entering system should be easy to find and easy to use so that you can make quick reactions when you see an opportunity present itself. When you see a 20 pip reward and a 10 pip risk trade, you don't want to be fumbling around with your mouse or keyboard, you just want to trade.

Knowing enough about online forex trading to make solid, informed choices cuts down on the fear factor. If you apply what you've just learned about online forex trading, you should have nothing to worry about.

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Online Forex Trading Explained

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

The object of all individuals involved in online forex trading is to make money by buying one currency when it seems to be under-valued, hoping that its price will rise compared to the currency they sold. What makes Forex a truly unique market is that it operates non-stop during the business days and is the largest financial market in the world with an estimated turnover of $1.5 Trillion a day. The market operates 24/7 Monday through Friday, because as the Asian market closes, the European one opens, then the US one, and so on.

The online forex trading business is all about currencies. If you notice a typical forex chart, you will see that the currencies are grouped in pairs, noted by XXX/YYY (international three letter codes for the currencies). For example, EUR/USD is the price of the euro expressed in US dollars. Over 80% of all currencies are traded against the USD, making the USD the most traded currency, followed by the Euro (EUR), Pound Sterling (GBP), Japanese Yen (JPY), and Swiss Franc (CHF), these currencies are called the majors.

Other forex related reports show that just over 5% of all traders are able to profit consistently. The forex market is a difficult one to master, so if you want to be successful, you must be knowledgeable, have a sound strategy coupled with a tested online forex trading system and the psychology if a winner. Some of the factors which determine the movement of currencies are political situations, news, official government statements, and economic trends.

Perhaps the biggest advantage of forex trading is that there are no borders, which enables individuals from around the world to participate, regardless of their nationality or geographical location. Opening a Forex account has never been easier than now, with great opportunities available online. There are many forex trading websites where you can open an account and begin participating in this exciting market.

If you base what you do on inaccurate information, you might be unpleasantly surprised by the consequences. Make sure you get the whole online forex trading story from informed sources.

Having a forex trading strategy is important for your success. The forex market can be very tricky, so it's best to start with small trades if you are new to this. There are strategies which rely on mathematical models and analysis of forex charts and graphs for a given currency pair. Other approaches are based on more obvious factors such as political news and situations. The best way is a combination of both methods.

To start trading on the FX market, you need to set up an account with an official broker. There are plenty of brokers available on the Internet, so choosing the best one will require a little research from your end. Different brokers have different terms and conditions for opening an account. Most require a deposit of anywhere from $50 to $2000.

Forex websites require you to register for an account and then fund your account (using a credit card, or bank wire), after doing that, you will be able to access to their online trading platform. Although trading platforms vary with their features, they all have the same basic function.

If you are new to online forex trading, it’s a good idea to start with smaller trades until you get some experience, and NEVER risk more than you can afford to lose.

Now that wasn't hard at all, was it? And you've earned a wealth of knowledge, just from taking some time to study an expert's word on online forex trading.

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Online Forex Trading - Treading a Cautious Step

Online Forex trading is has gained popularity for reasons like, it is available round the clock and five days a week. You can do this business from home. It is fast becoming a big opportunity for earning money relatively safely. Online currency trading can be profitable depending on how you play your cards. Yes, I mean there are potentials for loosing your hard earned money overnight, if you are not alert. Online Forex trading simply means buying and selling currency pairs such as US Dollar versus the Japanese Yen.

Word of Caution

A word of caution here may not be out of place. Online forex trading is being promoted as a get rich quick scheme that can be mastered overnight. Contrarily, however, most traders lose out. So before taking the dip, you must carefully study what online Forex trading is. Making money through online forex trading is pretty challenging but not impossible. So gather as much information regarding it before you take the plunge.

Primarily online forex trading is the purchase of a currency from a country by paying for it the currency of another country. However, the key lesson for online forex trading is to identify when to take profits and at the same time the placing of your stop loss orders. Secondly, the myths such as day trading works will only suck you to big black holes but nowhere. Plainly speaking it is nothing special than direct access trading through brokers.

What Is Margin Trade

Margin is the amount used for a trade. Brokers let you trade upto 4 times your collateral deposit you made with them. This allows you to take positions much larger than your collateral which wouldn't have been possible otherwise. When you make a profit, you get the margin which is the difference between selling amount and the sum of brokerage, taxes and the money the broker had extended to you. This obviously increases your buying power. Now, this margin/leverage you can enjoy depends on your account equity and other factors like the longevity of your account. Remember many speculative trades are made using margin trading.

In the worst case, you can't lose more than your margin which is your sole investment as it is is also known as minimum security in the market parlance. How ever, expect to draw up a margin agreement with the broker when you take the plunge.

When you are new or unsure don't risk by day trading. The popularity of online forex trading is drawing all types of investors no matter whether they are pure play speculators or seasoned players which is the root of many market fluctuations. However, an advantage of online forex trading is the absence of bulls and bears. But here is the bottom line: online forex trading is a very popular way to online income today.

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Online FOREX Trading - 3 Common Errors That Will Make You Lose

Online FOREX Trading was seen as the way for the little guy to compete with the big professional traders but guess what?

The ratio of losers remains them same as it was before the rise of online FOREX trading.

How can this be so surely they should do better? The answer is no because traders make these common errors.

1. Blinded by technology

This happens to many novice traders they see the vast amount of news and indicators at their disposal and think they have technology on their side and will win.

Most over complicate their trading and lose.

Simplicity is the key to trading and this was so before the rise of online trading and is still true today.

There is no correlation between how complicated a system is and how much money it makes.

In fact, simple systems are best as they more robust in the face of brutal market conditions.

2. Day trading and over trading

The rise of online forex trading has seen the bulk of new traders try and make money day trading.

This is a huge mistake.

Day trading doesn’t work, as the logic it’s based upon is nonsense.

Day traders have no reliable data to work with.

It's obvious that daily moves are random as daily volatility is random!

Day traders argue that trading short term is possible with online forex trading but this is not true you cant win if you cant calculate the odds.

Don’t believe me?

Ask any day trader for a real time track record of profits, they have made over the longer term and you wont get one – because it doesn’t work – PERIOD

3. Money management

The speed of the Internet in delivering information has increased volatility.

This means that traders have to be far more careful with money management than before.

Most traders in online forex trading are trying to restrict risk so much that they almost guarantee they will be stopped out and lose.

If you want to make money in forex trading your stops cannot be to tight or volatility will simply stop you out.

You need to take risks to make profits and this is as true as it’s ever been.

Placing stops close to entry may keep your losses small, but what’s the point of that if you are almost guaranteeing yourself that you will are stopped out?

To make money you need to risk it – It’s as simple as that.

The tools need to be applied correctly!

Online forex trading is seen as a way for the little man to compete on an equal footing with the big players but nothing could be further from the truth.

Online forex trading has lured many traders into a false sense of security where they think because they have all the tools they can win (but they don’t learn how to apply them)

Additionally, they think they can now catch short term moves and engage in the best way to lose money in forex – day trading.

Finally, they think they don’t need to take big risks to make big gains and end up eroding their accounts with consistent losses - all small but they add up.

Online forex trading has not seen any increase in small speculators winning and the three reasons above are the major ones why

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The Ins And Outs Of An Online Forex Trading Platform

What is the forex? Well, forex, the word is simply a combination of the phrase FOReign Exchange. That's it, you're ready to trade. Oh, you want more? The forex market is an electronic market where the currency of different countries are traded.

In actuality, you are trading the value of currency A vs. the value of currency B. Although you can combine any two currencies to form a currency pair, there are four currency pairs that are considered the major pairs.

They are: EUR/USD (Euro/Dollar), GBP/USD (Pound/Dollar), USD/JPY (Dollar/Yen), USD/CHF (Dollar/Franc). You can spend your entire currency trading career trading just one of those pairs.

Now for some interesting facts about the foreign exchange (forex) market. It is over 30 times as large as any other financial market. Remember this fact, we will be touching on it again later. The forex market is open 24 hours a day 5 days a week. This is a great feature as it allows you to partake in the business of currency trading regardless of where in the world you are.

Back to the size of the forex for a second. Due to this attribute, the foreign exchange market provides currency traders with opportunities that do not exist on any other trading tool. Although this article is not being written to get into too much detail about this, I'll give you an example. There is no slippage on Stop orders during regular trading hours. If you are not sure what this means, I strongly suggest you spend some time looking it up. This is a quality that, by itself, separates the forex from all other markets.

So, now we get to the nuts and bolts of this article. What is an online forex trading platform?

Truth is, whether you are doing your own trading, following some form of forex trading alert or any other sort of forex trading system you are going to need an online forex trading platform.

Regardless of which forex broker you choose, you will be provided with some form of online forex trading platform. Usually, the trading platform will be the same whether you are trading mini contracts or full contracts.

What should an online forex trading platform provide?

Firstly, you should be able to see the value of your account at a quick glance. Also, you should be able to see how much money you have in the market and in what currency pair at any given time.

Secondly, the value of all currency pairs of interest to you should be right at your fingertips. This means that you should be able to define which currency pairs you want to have access to and you should be able to choose the look and feel of the quotes.

Thirdly, an order entering system should be easy to find and easy to use so that you can make quick reactions when you see an opportunity present itself. When you see a 20 pip reward and a 10 pip risk trade, you don't want to be fumbling around with your mouse or keyboard, you just want to trade.

READ MORE.....>>

Online Forex Trading: Easy Access to Making Higher Profits?

Log onto to the internet and you will easily find many ways to make money. You'll find business programs, internet marketing strategies, internet income opportunities, bond trading, stock trading, affiliate programs and all other kinds of online money-generating programs.

In fact, online businesses have been around since the internet began and it seems nothing can stop these programs from proliferating. The latest craze has been centered on the popular online currency trading business because of the many flexibilities and beneficial activities it has been producing. This is more popularly known as foreign exchange currency trading. It is also called by many as Forex trading or simply, Fx.

24-hour Online Forex Trading Websites Have Advantages

The Forex trading system is a 24-hour based market, giving you flexible access to it at any time of the day or night. Unlike with other market, such as stock exchange, you can continue dealing with the currency trading market without worries over it closing at the end of the day. The online Forex trading websites are giving this 24-hour access for you to monitor what has been happening around the market at anytime.

Learn Forex Trading Basics and Practice

Through these online websites you are able to learn all the basics about the market. They also provide some tools in the website to help and guide you through all the process and mechanics of the trading.

Another advantage is that you can practice your trading skills before actually investing your money on the currencies. Through free guidance, demos, and market news provided by these Forex trading firms, beginners in the industry are already trained to be the expert in the business.

Once you feel you are confident enough to trade and invest a little amount of your money, sometimes in as little as $200, you can start taking advantage of the many forex trading benefits.

Thanks to the online Forex trading websites, learning the Forex trading market does not necessarily mean you must become a market analyst or economy expert to be successful in the field.

How to Access the Forex Trading Market?

In most cases, you can access the most extensive market, Forex trading, through an intermediary or Forex trading brokers. Just like stock brokers, they can provide you accurate information and advice on how to deal with Forex trading strategies. Advice includes all the aspects of the Forex trading market which extends to research approaches and technical analysis to improve the member’s trading performance.

Naturally, because this market has apparently been providing a great return on investment, large financial institutions have been proactively monopolizing the market. However, with the online Forex trading firms, small-time individuals also have the opportunity through Forex trading brokers.

The online Forex trading firms, as mentioned earlier, have been giving out free website tools for you to familiarize and navigate the whole concept of the market. Your choice of Forex trading broker will largely depend on your need in the trading market. Many houses (online Forex trading brokerage sites), feature simulators and advice, as well as detailed research designed for the use of the beginners. Furthermore, these websites typically provide experienced online Forex traders who offer in-depth advice to forex traders of all levels. Beginners can try these tools and find out if they cater exactly to their needs.

The secure online forex trading websites of today offer another advantage which is important to many people: to work and deal with the market in the comfort of your home. You can initiate your Forex transaction in the morning, leave for the day, and return at night with results all ready for your assessment.

Forex trading online is an outstanding way to test the waters and hone your trading skills while still working full time.

Article by Steve Crothers of the online currency trading resource, Trading Currencies Online. Visit the website for many more resources, tools, and currency trading training

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