Tag: Forex market

All forex market related articles are found here. Educative, informative and written clearly.

  • How to Identify Trend Reversal?

    How to Identify Trend Reversal?

    How to Identify Trend Reversal?
    Some strategies can help you to identify trend changes even before they happen.

    If you want to know how to identify trend reversal ahead of time, we’re sorry but it doesn’t exist. There is no trading system or methodology capable of doing that. The only thing you can do is to learn how to read the price action and identify potential zones where the market could reverse. 

    So, how to identify trend reversal? It appears when the direction of stock changes and goes back in the opposite direction. The examples of reversal are uptrends that reverse into downtrends and vice versa. What trend reversal tells us? First of all, the sentiment in the stock is changing. For example, an uptrend that reverses into a downtrend tells us that traders are taking profit from the overbought price of the stock. 

    On the other hand, when downtrend reverses into the uptrend shows the sentiment is changing to bullish. That means the buyers are boosting bids to reverse back into the bullish trend. Let’s examine several indicators that might help us to understand how to identify trend reversal. 

    Why is it important to know how to identify trend reversal? 

    The main importance lies in the fact that if you recognize the trend reversal on time, you’ll be able to exit the position in profit or at least, to protect your trade from extended losses. But the trend reversal also gives you a chance to profit if you trade in the opposite direction.

    But there is a problem to recognize the start of the trend. We can spot the new trend only when it is already formed. It is visible after the new direction starts. The other problem is that you don’t see just one trend. Let’s say that the time frame you’re trading may have a trend that differs from the other on the lower or higher chart.

    Use Moving averages to identify trend reversal

    Traders broadly use moving averages to identify trend reversal and as alert of the “potential” start of a new trend direction.

    Let’s say the price passes a moving average and goes above it, that could be a sign that an uptrend has just started. Hence, when the price goes below the MA indicator, the downtrend is starting. 

    For example, in forex trading, use two MAs, one slower and one faster. When the faster MA crosses the slower MA, it is a confirmation that the new trend is developing. But you have to be careful because technical indicators can lag prices. So, you will be late for any trend change. In the best scenario, you’ll recognize a new trend, not at the start, but very close to. Still, moving averages, particularly the 200 periods moving average, are helpful indicators that may show a trend reversal.

    How to identify a trend ending? 

    Trends aren’t highways. You cannot just start the engine and drive from point A to point B.  What we can do about trend reversals is to estimate its probability to happen.

    For example, while you are trading in an uptrend direction, you can notice on your chart that something may show the market has a high possibility of reversing.

    Bullish and Bearish – how to identify trend reversal?

    An uptrend is bullish price development that proceeds to make constant higher highs and higher lows. A bullish reversal appears when the stock stops making higher highs and begins to make lower highs and lower lows. In other words, it reverses the direction from up to down. 

    A bearish trend reversal develops the same formations but inversely. In a bearish downtrend, the price action creates lower highs and lower lows. When the price ends forming lower lows and establishes a higher low and remains to rise with higher highs and higher lows, it is a bearish trend reversal.

    Different time frames

    How to identify trend reversal on different time frames? 

    The high and lows can differ depending on the time frame chart you use. Let’s explain this. For example, you use the 60-minute and 5-minute charts. In the 60-minute chart, you can see a range of lower high and lower low in a downtrend. But, your 5-minute chart can show the uptrend where higher highs and higher low candlestick closes.

    This means, your 60-minute chart shows the overall constant trends but your 5-minute chart can show a different tendency. It shows moves back to the longer time frame resistance. Here are two possible scenarios. The price will return back down is one possible scenario. The other scenario could be, the price may continue to bounce and reveal the early trend reversal attempt. The time frame you are trading is very important. It has to be aligned with a more extended time frame trend.

    How to trade trend reversal

    You can trade trend reversal at different points during the reversal process.

    The first important thing that you must keep in mind is to regularly maintain trailing stops. It is important in case the reversal turns out to be a fake. Usually, trend reversal starts as a move that fails to bounce but finally succeeds in reversing the trend. The point of reversal is a break: breakout or breakdown. It is followed by the opposing trend direction. The uptrend will ultimately top.

    As the price tries to bounce again, it is faced with greater selling pressure. So, it starts to produce lower highs and lower lows to finally break support and forms the downtrend. 

    Of course, this trend reversal has to be confirmed. If you enter the position in anticipation of a reversal without confirmation,  that may expose your trade to a risk of getting a fake signal. Also, your stop-loss will be triggered and you’ll exit the trade without profit. 

    If you enter the trade based on the confirmation, your entry point can be too far, so you’ll profit a little. Also, you could get stopped low on the reversion.

    How to have a proper execution?

    After you get the confirmation, wait for the first attempt and enter the trade close to the reversal support zone. You’ll have enough time to enter the trade if you use some of the popular methods to confirm the trend reversal. 

    For example, you can use trend lines. They are a simple method of visually recognizing trends and reversals. You’ll need to draw the trend lines ahead of time and to actively monitor. It’s simple to draw the trend line. Just connect the highest high and the lowest high to make the upper trend line. To draw the lower trend line, connect the lowest low and the highest low. 

    Trend lines could be diagonal or horizontal. If both trend lines are moving up or down together diagonally, they are in an uptrend or downtrend. How to identify trend reversal occurs? If the opposite trend line of the trend gets breached and then developed in higher highs and higher lows we have downtrend reversal in a breakout. Hence, the lower highs and lower lows represent an uptrend reversal.

    In case both trend lines are horizontal,  it is a consolidation that will finally end as a breakout or breakdown. 

    Bottom line

    There is no system that can tell you how to identify trend reversal with total precision. The only chance we have is to watch the price action and identify the potential zone where the market could reverse. So, we have to identify the weakness in the trending move, and strength in the retracement move. The also important signal is a break of support and resistance. Some other indicators could be a break of the long-term trendline, or if the price is coming into the higher-timeframe formation, or goes parabolic. Also, pay attention if the price is overextended.

    The more concentrated circumstances there are, the greater the possibility of a trend reversal.

  • Why Forex Trading Is Hard For Some Of You?

    Why Forex Trading Is Hard For Some Of You?

    Why Forex Trading Is Hard For Some Of You?
    Experienced traders admit that the greatest problem in the Forex market is not the trading approach but discipline. 

    Many beginners in the Forex market are faced with some difficulties and usually give up and ask around why forex trading is hard. Yes, for some traders it is hard but doesn’t have to be. Once you obtain more experience you’ll see how easy it can be and you’ll never ask again why forex trading is hard because it isn’t. Don’t believe what others are telling you. Forex trading is simple. But it’s really important to learn some basics before you enter this market. It is just like riding a horse. Once you learn it, it’s impossible to forget. And as in riding a horse, you have to know and follow some rules. Yes, you can push on your horse, as you can force your trades, but what will happen? Your horse might refuse to obey. 

    You have to be in line with a horse, calm and considerate, you must have the mental strength to deal with difficulties and stay cool. You must understand your horse and predict how it will act on your commands and have patience.

    Almost the same comes to Forex trading. When we hear someone asking why forex trading is hard for most of the traders, we know such has lost its temper. 

    The other reason why forex trading is hard could be that forex traders rarely like to follow the rules. They tend to ignore them. Maybe we should ask them why. Sticking to the rules may not be so exciting but it is beneficial. Don’t listen to the scammers that offer instant solutions to great gains, strategies that are successful 100%, that work in any Forex market’s condition. Put the logic to work! It is impossible! How one single strategy can be the best for all types of traders, all circumstances, for different market conditions, personal risk tolerances? No way! Avoid such artists, Youtube is full of them.

    When you learn forex trading in a proper way and follow some rules, you’ll never ask such a question of why is forex trading hard. 

    Let’s see why Forex trading is hard for some of you? 

    We already mentioned scammers. We’re pretty sure you noticed that many websites where you can just buy a trading strategy or attend some webinar over the weekend. “Become a supreme forex trader in a few hours,” “All you need is my system-pro to become a millionaire in trading forex,” or “You don’t need to learn, just follow my most profitable strategy of all times.” We really found this on the internet.

    They are in most cases, scammers. Even if you try to watch some video on YouTube you’ll be confused in 20 seconds. Honestly, some of these so-called gurus can burn your brain in a few seconds. Their explanations have nothing with successful trading. They don’t even know what they are talking about. They are totally messed up! 

    Our two cents – If a trading guru wants to sell a fancy strategy, you shouldn’t have losses by copying it. Of course, if you strictly follow the instructions and if you have full access to his/her strategy. Well, elite traders are honest, they will tell you, they will teach you. That’s the main difference. The scammers will sell you, often it isn’t a lot of money luckily, something that isn’t working or not works for you. So that could be the reason and answer the question of why forex trading is hard. Because you got a rotten apple actually.  

    Forex trading can be difficult

    Our brain is designed to run on the principle of causality. We are all trained to understand that everything we do has a particular consequence. Action will cause a reaction. Science also teaches us the same. For example, if we went out without an umbrella on a rainy day, we can expect to get wet. Or if we jump in shallow muddy water, we can expect to get hurt. 

    Right? Yes, in real-life (even if we know some people that are not aware of causal relationships, especially in the case of shallow water), but not in forex trading. In trading, you don’t have a direct balance between the time you spent in learning and the profits you obtain. To explain this. Many beginners expect if they spent weeks and months studying to trade, they could be successful automatically. That’s not how trading is. There is more.

    Forex market is immune to control

    Can you decide if the EUR/USD will fall? How can you know if the USD/CAD will go up or down from the last price? Most people are not able even to guess it. In everyday life, there are things we don’t need to think twice. For example, 1 + 1 = 2. That’s it. Moreover, nothing can change it. But in the markets, every minute is different. So while trading forex you have to change the strategy, method, approach, decisions. Don’t try to implement the trading patterns taken in the past. Basically, it isn’t mistaken, but the fact is that historical performance has surely no relationship to current market performance. 

    The forex market creates incredibly different circumstances where we have zero chances to be sure where or when the market is going to change. Maybe that is the reason why forex trading is hard. 

    So what to do? Anything but never try to put the market under your control. You can spend nights and days watching charts, monitoring your trades but you cannot control the market. One experienced forex trader once said that one of the most important lessons he learned is to accept the randomness in the forex market.

    That isn’t the reason to avoid forex trading, that’s the reason to be ready for any possible scenario of your trades. You’ll be prepared even if your trade setup fails. Read books, learn a lot, practice a lot. That’s the key.

    Why forex trading is hard – your subconsciousness could be the reason

    The main duty of the subconsciousness in forex trading is to protect our wealth. But sometimes it operates in a strange way. In essence, trading should be simple since we have only two options: to sell and to buy. So, theoretically, we have 50 percent chances to be right. Yes, but the other 50% is against us. OMG, I’m losing my mind! That’s the first thought, right? Here is our subconsciousness in play. Let’s see what could happen in trading.

    For example, you entered the stressful position. Everything looked good but suddenly the market turned against you. That’s the stress and your subconsciousness tries to relieve you out of that situation. What are you possibly doing? Exit the position. Why? Your subconsciousness pushed you to exit prematurely. The consequence is that you lost the trade or at least, you missed the main profit.

    Let’s suppose you traded for a while and you decided to set your stop-loss target not too close as always. What happened, for God’s sake? Are you shaking? Sweating? Are you nervous? Of course, you are! Your subconsciousness is warning you’re making a mistake by this deviation from your standard trade. In prior trades by a setting stop-loss order at a particular level, you had the winning trades. So, your subconsciousness doesn’t like changes because, as we said, its primary job is to protect your gains. 

    So, why are you in conflict with your subconsciousness when you both want the same? Yes, that’s true, but you both have different ways to achieve that. To make a profit. When you want to enter a riskier position or to change the previous performances, your guts will try to stop you. And it might cause you to make emotional decisions. You might be frightened to change anything. Your subconsciousness will rather accept small gains than to allow you to take risks and make great profits. That’s why forex trading is hard sometimes. It is a constant struggle with yourself. 

    How to become a better Forex trader?

    Do you remember when you went to school, you used some tools for the lessons? The same is in forex trading. You’ll need tools to become a better trader. In Forex, trading tools are known as technical indicators. You’ll have to know how to use them when trading. Also, you’ll need to use the fundamental analysis to be able to understand the markets. And, a lot of practice. Yes, we know it is the hardest part since many would like shortcuts. Unfortunately, there is no shortcut. In forex trading, it is essential to have realistic expectations. But also, you must have a bit of courage only once you learn how to trade and what may happen after you make some move. 

    If you think you know everything after a few weeks of practicing, you’re in big trouble. That is the perfect way to lose everything you have. And to do it quickly. So, what is the proper amount of time to learn trading forex? No one can tell you that because it is different from person to person. But if you keep in mind all these things mentioned above, the odds to become a successful trader could be bigger. Be patient, learn how to profit from trades consistently. That’s the way! If you do so you’ll never ask again why forex trading is hard. It will not be for you.

    Bottom line

    Why Forex trading is hard is the question for those who want to give up, to quit, and go to sleep. Forex trading isn’t hard, it is a fantastic opportunity to increase your well-being. Don’t expect to be a great trader from the first trade. You’ll make mistakes, you’ll lose money, but you’ll learn. Sooner you accept that the sooner you’ll learn. No one became a great trader by birth. Everyone had to learn how to trade and how to adopt the whole process. It isn’t hard unless you make it hard. 

    In forex trading, as it is in trading in general, you’ll have a lot of enemies. But remember one thing, the most dangerous enemy for your success is you. Risking too much, betting, trading too often, just pick one or all of these to make losses. The forex market is tricky to read, but you have the trading rules to be able to do that. Rules will protect you from making decisions driven by emotions. Let’s go, play the market! But do it smartly.

  • Forex – What is it – The Differences and Similarities With Other Tradings

    Forex – What is it – The Differences and Similarities With Other Tradings

    Forex Educational Series

    Trading Forex is the area to focus on

    by Hans Stam  

    Forex trading

    As a Forex Trader, I would like to create a series of short explanations about how this market works. What are the pros and cons etc?  

    My aim is to make this as clear as possible, so you can follow the process step by step.

    What is Forex?

    Forex (FX) is the abbreviation for Foreign Exchange.

    When you travel to another country, you may want to exchange your local currency to the currency of the country you’re traveling to.

    At the bank or airport, you can exchange your money into the currency used in the country you are heading.

    The exchange office works with an exchange rate, depending on the current value of both currencies of a “pair”.

    A Pair is, for example, a euro against a US dollar which would be the EUR/USD pair, where the EUR is the base currency, and the USD the quote or counter currency.

    EUR/USD – Base / Counter

    At the end of your trip, you like to exchange the remaining funds again, back to your currency.

    Again, the exchange rate can be changed as it is constantly changing.

    So it could be very possible that you will get more value back compared to when you first exchanged it, or a lot less value.

    The excitement of Forex trading

    This exchange can make or lose you money, and that is very interesting to investors, especially the part where the trader can make money of course.

    Just like stocks, currency can be traded on the Market, and you don’t have to go to an exchange office to do it.

    So what makes Forex different from trading stocks?

    First of all, you don’t have to find a buyer for the trade you are holding, you can close the trade any time you want and instantly get the current value credited back to your trading account.

    The second main difference is, leverage!

    For instance, the broker gives the trader a 1:100 Ratio with your broker, which means you can trade 100 times the value you pay for.

    An example would be trading the Pair EUR/USD and you would buy 10.000 Euro’s, the broker will then take 100 Euro’s locked in your account while you trade the exchange rate over 10.000 euro.

    It’s easy to understand you can make far more profit over 10.000 euro, than over 100 euro.

    When the market goes your way

    Now, when the market goes your way, and close the trade to take the profit, you get the initial 100 euro credited back into your account. So all that happened was that you win or lose the price difference from where you entered the trade to where you closed the trade over 10.000 euro.

    It’s logical that when you take profits over 10.000, you make a high percentage on 100 initial deposit.

    This goes both ways, so it can be risky, but the rewards can also be a very nice ROI (Return on Investment)

    If you like to find out more about how you can enter this market, please visit my page.

    Can you really make a living trading the Forex Market?

    That is a question I’m getting a lot, so I will try to give some clarity.

    The exact percentage of the people who really make a consistent profit is low.

    Some speak of a top 5% and that is going as low as a top 1%.

    What most traders will agree on is that the number is low whatever that percentage might be.

    So how come many people are still trading this market and how come so many are struggling?

    The first answer on to why so many people still have an attraction to this market is that it’s possible to make a lot of money really quick, on the other hand, they can lose it just as fast.

    But in the end it is very simple, you either are right in the direction your trade will go, or not.

    I will elaborate in later articles some more about market directions, but this is the basis of all trading.

    The trader buys or sells at a specific price, hoping the counter currency will have a positive price change for their trade.

    Forex isn’t the same as gambling

    Some traders are hooked on the possibility of great profits, and you could compare it to Las Vegas Casinos, and it can be very addictive.

    So that it the why people keep on trying, it’s like gold fever or putting your money on Black or Red in a Casino.

    Second, why are so many people struggling with this fairly simple way of trading?

    The biggest reasons are emotions and lack of knowledge which basically makes it like gambling.

    The lack of knowledge speaks for itself, but how about emotions?

    Many struggling traders have fear of loss and get excited too quickly when they are winning.

    It’s usually when people are doubting a strategy they bought or came up with themselves and experience fear of losing.

    When they see the trade going against them, they let the trade go really deep, but when the trade finally goes their way, they can’t wait to take the profit and have that excitement produce an adrenaline kick.

    The strategies can be altered

    Often strategies are altered, without really knowing why, but if they had that strategy a bit different on the last trade, then their loss would have been profitable in their mind, forgetting the trade would probably have been closed well before it matured.

    Hindsight trading has been used a lot with this type of trader, and that doesn’t count.

    The top percentage of the traders who make a consistent profit have learned to do things differently, and it would be wise for traders to have a mentor who knows where the pitfalls are.

    Also, it is typical for this kind of gambling trader to put in a few hundred dollars, while in reality, the minimum should be at least $5.000 just to have a buffer.

    Once a trade goes against the direction desired, it will need some breathing space. The bigger the buffer, the longer you can keep the trade open.

    Fact is, you will not lose a trade until you take the loss, or when you run out of margin. So part of that is a decision, the other part financial.

    If you like to find out more about strategies or have specific questions, please visit my page.

    I hope this short explanation has your peaked interest, and it is clear to you how the basics work.

    In the next article, I will go deeper into some facets of trading the FX Market and its terminology.

    Make sure to bookmark this page, and come back to read more soon.

  • Is Forex trading profitable? What Is it the truth?

    Is Forex trading profitable? What Is it the truth?

    Forex market - The differences with other markets 1How Forex trading can change your life?

    By Guy Avtalyon

    One reasonable question that comes up a lot is: Is Forex trading profitable? So many times this question comes from traders or people that want to get into the Forex market.  

    That’s because only 5% of traders are successful.

    The others cannot find any success with their tradings.  Maybe they are not able to recognize the right approach
    When we say “trading approach”, we don’t just mean their trading strategy.

    Your trading approach is much more than a trading strategy and we will cover that later.

    The brief answer is yes. Forex trading is profitable. The trading in the Forex market is profitable but chances are you won’t make any money.

    If you do not understand the risk or you don’t know how to manage your trades in the right way, you will lose. Let’s say, if you are risking too much per trade to resist a series of losing trades, you will be out of trading faster than you can imagine.

    If you continue to move your stops to avoid a loss, you will finally lose your account.  Only your broker will be happy. 

    You can become a profitable Forex trader but it depends on several factors. Some of those you can control, and others you can’t.

    Everyone comes to the forex market for a reason. Some come solely for entertainment, the others to become a professional trader.

    However, the good news is that there are things you can do to speed up the process. In other words, you can learn from other traders’ mistakes.

    Is Forex trading profitable?

    The fact is that many investors haven’t had the success trading Forex they had imagined. Their experiences cast a bit of doubt on its viability as an investment choice.

    Nevertheless, for a market that trades around $5 trillion daily in volume, it stands to reason that there are traders profiting from Forex trading. Otherwise, people would avoid the Forex market. But it is not the case.

    The right question to ask is how to trade Forex profitably and how to be systematically gain a profit in Forex.

    So, Forex trading is profitable if you have to know how to achieve it.

    How to make money trading Forex?

    In the forex market, you simply buy and sell currencies.

    Placing a trade is simple. The modus operandi of trade is very similar to other financial markets, for example like the stock market. So, if you have any experience in trading, you should be able to set it pretty quickly.

    The aim of forex trading is to exchange one currency for another in the expectation that the price will change.

    Forex trading is profitable - Is it the truth?Most popular currency pairs

    More concretely, that the currency you bought will increase in value compared to the one you sold. If you are applying the trading plan in a consistent way, you should be able to receive the rewards from your trading plan.

    Will you always win in Forex trading?

    No.

    You will take a loss and many in a row.  You will see your account varies. It can be depressing to see sometimes.

    The vision of your trading system is what should keep you fixed to your trading plan even when an equity curve going down.

    Yes, you will have losing days. These are the facts of trading.

    If you are asking about being profitable over the long run, the answer is yes. But only if you are trading a positive outlook trading strategy.

    One month of not being profitable does not make for the trading fiasco. It is assumed.  

    You must predict and plan to lose, and also, you have to assume that you will face the biggest loss of your trading work in the future. Expect that a multiple of risk loss is just around the corner.

    It will remind you that the biggest trading job is to protect your trading capital.

    You must have 3 things on your mind. Always.

    Forex trading is it worth it?

    Forex trading isn’t a get rich quick opportunity.

    Opposite to what you’ve read, Forex trading is not going to take your $5,000 account and turn it into millions. The volume we can earn is defined by the sum of money we are risking.

    The old saying “It takes money to make money” is exactly what Forex trading related to. Of course, that doesn’t mean it is not a profitable venture.

    You have to know, there are many successful Forex traders that trade for a living.

    How do they do it?

    They have gradually improved over time and increased their account to a level that can create a sustainable income.

    Have you heard about traders that are targeting 50%,  or 100% profit per month?  Yes, but the risk they are taking on is going to be pretty comparable to the profit they are targeting.  In short, in order to attempt to make a 50% profit in a month, you have to be prepared to see a loss of around 50% of your account.

    Even if you trade with an edge. Your return should be positive, but without leverage, it is going to be a small amount.

    Forcing leverage into the mix is how traders attempt to target extreme gains. In turn, it is how traders can produce extreme losses. Yes, leverage is beneficial up to point. But there is one danger possible, it can turn a winning strategy into a loser.

    Trading Forex with leverage

    The leverage as a winning strategy to lose money But extreme leverage can ruin a profitable strategy.

    Most novices minimize the possibility that loss leverage can ruin their accounts.

    Understanding leverage enough to know when to use it and when not to use it is important to your performance!

    Leverage is a very great tool but some traders use it to damage their trading capital. It is because they take their destructive force too easily or ignore it completely. Anyway, high leverage is something that most of the forex broker will like, it’s their preferred selling point.

    They’ll tell that you can make a huge gain using huge leverage. Even one pip is important to them. But you have to know that you could easily be destroyed by huge leverage also.

    Let’s say you have a coin that may earn $4 if it hit the heads. But when tails are hit, you will lose $2.

    Would you like to flip that coin?

    We guess you would flip that coin.

    Let’s see a different example.

    Let’s say you placed the trades by following some other trader’s acting. And she or he ended up with higher equity relative to you. That trader’s net profit/loss (P/L) was positive while your P/L was negative.

    There are two main points.

    When you have a losing trade, high degrees of leverage destroy your capital base. Moreover, it is forcing you to change your future trade sizes or deposit more funds.

    If you have a conservative approach and use the amounts of leverage according to that trading style, your equity P/L tracks your net pips P/L. Though you place trades in hopes of it working out in our favor, you must be prepared if it doesn’t.

    Part of that preparation is a result of managing an appropriate amount of leverage.

    Using sentiment can shift the odds in your favor

    Actually, we are talking about using the Speculative Sentiment Index (SSI). You can find a lot of articles on this subject.
    You can find that it is the best tool ever used. And it a part of almost every trading strategy that experienced traders use.
    SSI is a free tool that tells us how many traders are long compared to how many traders are short each major currency pair.
    What does it mean?

    It means to be used as a contrarian index where you want to do the opposite of what everyone else is doing.
    Using it for your trades you can turn around your work as a trader and become more successful.

    The bottom line

    When you ask if Forex trading is profitable, you must have all of this on your mind.

    If there is one word to describe the best trader, it would be – consistency.

    Trading currencies are all about implementing a trading plan. With consistency. Traders that do everything in a consistent way are holding to a proven edge. It is difficult to find the right way if you are constantly switching speed.

    Once again, Forex trading is profitable.

    Don’t waste your money! Do smart trading.
     

  • Forex market – The differences with other markets

    Forex market – The differences with other markets

    3 min read

    Forex market - The differences with other markets
    Forex market and other markets have more differences that you can imagine. The difference may appear to be great between the forex market and other markets. But this is not to suggest that they are similar. Not many of the experienced traders have dared to crossover the boundaries of their trusted market domains unless they made sufficient preparations and studied the new market. 

    Can someone who profitably trades shares also make money with forex?

    The answer is yes. But with some hints on trading style. Also, with a recognition of the differences between the two types of market.

    The forex aims to favor short-term trades.

    Unlike stocks, futures or options, currency trading does not take place on a regulated exchange. It is not controlled by any central governing body. There are no clearing houses to guarantee the trades. Also, there is no arbitration panel to decide disputes. All members trade with each other based on credit agreements.

    Let’s see how the forex market differs from stock markets.

    Forex market - The differences with other markets 1

    So here are the differences between the Forex market and others.

    1. The forex market is 24 hours opened, unlike the stock market. It is not a country or geographically particular specified. Major markets open in Tokyo. When it closes, London takes over and then the New York market goes live till the next day when the Tokyo market opens again. This kind of continuity isn’t available in case of stock trading.
    2. Forex market is the global largest exchange market. Not even the transactions of the entire world’s equity markets’ put together can meet this. The liquidity is never questionable, for example.
    3. The equity market is ruled by a number of technical and microeconomic parameters and indices. In the forex market, there is no such thing.
    4. The above point also characterizes that the concept of single exchange trading as nullified and what takes its position is over-the-counter trading.
    5. There are no commissions to be paid to the brokers. The reason is simple. Traders are directly dealing with currency.
    6. Currencies can decrease over long periods but can never be zero. This is an extremely incredible situation in the forex market. The traders can hold their short positions for as long as they possibly can without the danger of getting their capital wiped out.

    Forex market - The differences with other markets 2

    More differences 

    Concentration

    On various stock exchanges around the world, there are hundreds of large companies with shares that are very liquid. On the other hand, for example, the S&P 500 or FTSE 100, there are only three major currency pairs: EUR/USD, USD/JPY and GBP/USD.  But, USD/CAD, AUD/USD and USD/CHY are also very prominent pairs and they take place in the forex market.

    Spreads on these main pairs are the closest. Hence, they are the most suitable for day traders and scalpers because the transaction costs are lowest. However, for longer-term traders, attractive possibilities can occur nearby more exotic currencies such as NOK, SEK, SGD, and NZD. But, spreads will be wider on pairs involving ‘exotics’ as liquidity is much lower.

    This concentration gives traders the possibility to specialize. For example, some will only trade EUR/USD or GBP/USD and become skilled on just one of those pairs.

    Stock market traders can decide to specialize just in a few very liquid stocks.

    However, those strategies also typically involve having to monitor the major equity indexes. There are software programs that can locate those fast-moving shares, but a lack of specialization in those stocks can leave traders open to making losses.

    Trading in the Forex market is cheaper

    The spreads on the major currency pairs tend to be wedge thin and closer than on stocks. This makes for cheaper transaction costs, which is important. Moreover, there is no commission to pay on forex trades. Maybe that’s the reason why the forex market is many times bigger than the world’s equity markets.

    Also, competition between forex platforms is powerful.

    Shorting stocks through stockbrokers can be difficult and very costly.

    However, shorting stocks can be very dangerous and far more so than for currencies. Consider shorting the stocks of a company where a takeover bid is announced after trading hours. That means a trader can’t cover their short position until the market opens again.

    Takeovers regularly happen at a premium to the day’s share price. It’s not unusual for shares to rally 40% even 100% under such conditions. That can destroy a trader’s capital, especially if leverage is involved.

    Higher leverage and lower transaction costs provide the possibility to trade successfully with less capital than required for stocks.

    The Forex market is different from other markets in some other key ways too.

    Think that the EUR/USD is going to go downward? Short the pair!

    There is no uptick rule in Forex as there is in stocks. There are no limits on the size of your position.

    For example, if you have enough capital, you could sell $200 billion worth of currency.

    More benefits, if you get information that the Bank of England is planning to raise rates at its next meeting, you could go right ahead and buy as many pounds as you like.

    No one will ever sue you for insider trading should your bet pay off. There is no such thing as insider trading in Forex.

    In fact, some countries economic data, are often known days before they are officially released.

    But remember that Forex is a leveraged product. Hence, there is a great chance that you will incur more losses because you can control a large amount of currency with a small margin.

    For example, a 1:200 leverage means you will receive $200 in your account for every $1 you invested. If you invest $1000, you would be able to control $200,000 worth of currency trade.  Money management is important to profit in Forex trading. You need to plan your risks, learn how to apply stop, losses and practice diversification in your trading practices.

    The bottom line

    Forex traders are closely watching the price changes, the volume of trades over time. It is important to take note of the price patterns to determine buying opportunities and risks. It is also important for a trader to understand the intrinsic risks, read the disclosures before making a trade.

    risk disclosure

  • What is the Forex Market?

    What is the Forex Market?

    2 min read

    What is the Forex Market? 2
    What is the Forex market? Actually simply. It’s the global market that provides the exchange of one currency for another.

    Also known as foreign exchange, FX or currency trading is a decentralized global market where all the world’s currencies trade.

    The forex market is the biggest, most liquid global market with an average daily trading volume exceeding $5 trillion. All the world’s stock markets together can’t even come close to this. But what does that really mean?

    Forex has no centralized market. Instead, an Forex market exists wherever the trade of two foreign currencies are taking place.
    Do you know it is open 24 hours a day, five days a week? Forex exists to handle investment and trade. The main trading centers are London, Paris, New York, Tokyo, Zurich, Frankfurt, Sydney, and Singapore.

    All levels of traders, from central banks to speculators, trade currencies with one another.

    The Foreign Exchange market, also called FOREX or FX, is the most exciting financial market in the world.

    Whether you sell $100 to buy YEN or a bank exchange $200 million for EURO with another bank, we are speaking about Forex deals. The participants on the FOREX market range from huge financial organizations trading billions, to people trading a few hundred dollars.

    Without this tool in place, foreign trade and investment would be obstructed. The major players on this field are the U.S. dollar, the British pound, and the euro. This machinery provides a clearinghouse to trade those major currencies.

    Thanks to the internet, you can trade on the FOREX market the way traders from the largest banks and investment funds do.
    All you need to get started is a computer with internet access and a trading account with a Forex broker.

    If you’ve ever traveled to some foreign country, you’ve made a forex transaction. Take a trip to Germany and you convert your dollars or some other currency into euros. When you do so, the forex exchange rate between the two currencies determines how many euros you get for your dollars. And the exchange rate fluctuates continuously because, this market, like many others, is based on supply and demand.

    How does Forex market work?

    On the Forex market, one currency is exchanged for another. The single most important thing with respect to the Forex market is the exchange rate between two currencies (a currency pair).

    You’ve probably seen it on the news or somewhere on the internet:

    What is the Forex Market?

    And you noticed the small changes if you paid attention. This small change may not seem like a big deal.

    But think of it on a larger scale.

    A giant international company may need to pay abroad employees. Imagine what that could do if simply exchanging one currency for another cost you more depending on when you do it? These few coins add up quickly. In both cases, you may want to hold your money until the forex exchange rate is more favorable.

    An exchange rate can experience prompt changes. Sometimes several times a second. So there’s a lot of activity going on 24 hours a day, 5 days a week.

    In overall, the currency exchange rate reflects the health of an economy in comparison to others. If the economies of the Eurozone are doing better than the US economy, the euro will go up compared to the dollar and vice-versa.

    You can trade currency based on what you think its value is. Just like stocks. But the difference with forex is that you can trade up or down just as easily. If you think a currency will increase in value, you can buy it.

    If you think it will decrease, you can sell it.

    Honestly, finding a buyer when you’re selling and a seller when you’re buying is much easier than in other markets. Maybe you hear on the news that Australia (this is just an example, don’t worry) is devaluing its currency to attract more foreign interest into its country. If you think that trend will continue, you could make a forex trade by selling the Australian dollar currency against, say, the US dollar. The more the Australian dollar devalues against the US dollar, the higher your profits. If the Australian dollar increases in value while you have a sell position open, then your losses increase. Hence, you will like to get out of the trade.

    In the moment of writing this post the chart looks like this:

    What is the Forex Market? 1

    When people talk about the “market”, they usually mean the stock market. So the NYSE, for example, sounds big.
    But if you compare it to the forex market, it would look like this:

    The currency market is over 200 times bigger!

    The tremendous number of $5 trillion covers the complete global foreign exchange market. But daily trading volume from retail traders makes up between 5-6% of overall volume, or between $300-400 billion. So, you see. It isn’t so big.

    The forex market is unmistakably huge, but not as huge as the others would like you to believe.

    Just to be honest.

    And remember’!

    Don’t waste your money!

    risk disclosure

  • Can you become a millionaire by trading forex?

    Can you become a millionaire by trading forex?

    (Updated October 2021)

    3 min read

    Can you become a millionaire by trading forex?

    Can you become a millionaire through forex trading? Do you know someone who has never dreamed of being a millionaire?

    Everyone can see the lives of celebrities and millionaires every single day. Who wouldn’t like the same lifestyle, expensive cars, luxurious houses, swimming pools, parties…

    All that desires, all that false matters, false emotions, come from media advertising and TV.

    OK, not everything is false. But that causes the other question: can I be a millionaire trading forex?

    Yes, you can become a millionaire trading forex.

     

    calculator>> Check out this Become A Millionaire Calculator 

    But you have to know it is not easy like you see on the internet advertising and TV.

    It depends on how much money you start trading.

    If you start with $5,000 and make 10% of your capital each month, yes, you will be a millionaire after 5 or 6 years. Just 10% of your capital each month can make you a millionaire.

    And if you start with $100K you will be in 2 years. You can’t do that in any other industry.

    Tell me, where you can start at $5K and become a millionaire in a few years.

    But remember, if your dream is to become indecent rich in a week or a month, forget about the forex. Go far away from forex.

    Because you will lose all your money, your car, your house and in the end, your family.

    This reality is hidden from you.

    Yeah, I know, every broker will tell you tales about doubling your money overnight.

    Hm!

    True is that they prefer you to lose your money. As soon as possible!

    Contrary, if you follow the correct way for a few years they will not see any considerable profit from you. Over the route of several years, you will be the one taking the true profits!

    And they don’t like that. This is not in their best interest because 90% of brokers are just market makers and have no relation with the market and banks.

    They create a virtual market for you and from time to time let you trade and they make money when you lose.

    And they lose when you have winning trades.

    Their interest is to make you lose as soon as possible, then they try to motivate you to add more funds to your account and lose your funds more and more.
    Can you become a millionaire by trading forex? 1
    If you really want to be a millionaire in the forex market forget about making money on the easy and fast way. Such thing like cold cash in the forex market does not exist. You will need time to learn how to trade forex. To learn how to develop a strategy with more than 60% probability to win. You will have to learn about money management. Actually, you should start trading on a demo account.

    Trading is art.

    People trade to make money in forex but forex trading is not like making money.

    You must understand the way of making money with the positions you are opening and the reasons behind it.

    That’s why you have to be patient!

    Trade for 2 or 3 months on a demo account. If you make success on a demo account, you can open a real account and start real trading.

    But, if you don’t have success on a demo account then something is not right. Perhaps your strategy doesn’t respect money management rules. Or something else you are doing wrong.

    After you see the mistake you can correct it and after that restart trading on a demo account until you get recurring success.
    Can you become a millionaire by trading forex? 2
    It is right to say that the Forex market is only for risk takers. It can’t be a permanent source of income but it can be a decent source of income. But only if you get the right guidance through the right adviser or build up your own knowledge to start trading with high precision.

    If you are new to trading you can start with the small investment.  And you have to keep revising your risk on the higher side to earn more.

    This can be the right approach. But the most important is that you should have the right guidance from the best signal provider.

    For everyone who asks: Can I become a millionaire through forex trading, there are two answers:


    Yes, you can

    and

    No, you can’t.

    Anything is possible in this world.

    However, you will be faced with some challenges like finding a good broker that doesn’t cheat on you. Maybe this is the biggest one.

    Forex brokers don’t let you grow your account systematically, because your profit is their loss.

    And we spoke about this:

    Forex is not a get-rich-quick scheme.

    Currency trading is not an easy way of making money. It is the same with the stock trading and all the other kinds of trading and investments.

    You have to pass some important stages before you become a millionaire.

    There are two things that you have to do to become a millionaire forex trader.

    First, you have to learn and master the trading skills. And you have to have a suitable amount of capital to invest in the forex market.

    No one has never seen one single retail forex trader who has become able to become a millionaire through growing a small account.

    There is no profitable currency trader who trades through the retail forex brokers.

    You have to have enough capital to trade currencies through a bank account. And your capital has to be suitable enough.

    You have to know that.

    Of course, if you don’t believe this you can spend time and money on retail forex trading.

    Unfortunately, it is not possible to start making money right after learning the forex trading basics and a trading strategy.

    To become a pro: PRACTICE to master your trading skills & risk management analytical skills using a free demo account for traders

    You have to consider something at first.

    It is smart to have a source of income that supports your currency investment. You must have some revenue, that covers your expenses and gives you free time to sit at the computer and learn how to trade.

    The lie is that you can make any money through forex trading and any other kinds of trading when you have financial problems.

    If you think that you can learn to make money through forex trading within a short time, and become a forex trader who makes millions of dollars, I have to tell you it is not possible at all.

    You can find so many false forex millionaires stories over the internet.

    Don’t let them deceive you.

    If you want to become a millionaire, first you need a good source of income that makes a decent amount of money that not only covers your expenses. But also leaves some money for your trading and investments.

    Only then you can start learning how to trade.

    You have to learn and practice until you become a profitable trader.

    There are two ways to do that.

    One way is harder. You have to follow too many trading strategies, robots, and time-frames, and sit at the computer for several hours per day.

    This way will hardly take you to your destination.

    The simpler and easier way is learning the Forex trading basics.

    And then a simple and strong trading strategy.

    You have to learn your trading strategy through demo trading. When you achieve success and make profit consistently for 6 consecutive months at least, you are ready to open a small live account and start practicing with it.

    If you make a profit for 6 consecutive months with your live account, all you have to do is that you keep on trading with your live account to grow it.

    3 of the most common patterns in Forex trading –  Head & Shoulders pattern, Pin bar and Double Top / Bottom

    How to use Head & Shoulders pattern:

    Head & Shoulders pattern is an easy way to develop trading skills.
    The first thing you must know is that Head and Shoulders is a reversal pattern. Meaning, when it’s uptrend, the price goes up, doing its shoulders and head patterns and then reverse for a downtrend.

    Those are somehow easy to locate when using this image to see what we should look for in an actual chart.

    In the image below, you can how it looks on a real EUR/USD chart:

    How to use Pin bar pattern:

    One of the most important candlestick patterns you should pay close attention to.
    If a pin bar appears it means that there is a very high probability that trend may reverse or pullback. The pin bar is often called “Pinocchio” bar, and it looks like this:

     

    How to use Double Top / Bottom pattern:

    Often, if you see a double top like in the following image, it can mean there’s a downtrend on the way.

    Forex trading is an investment opportunity.

    It isn’t a full-time job. You should already have an income to become able to invest in the currency market.

    Turning a small $5,000 account into a million dollar account is possible theoretically.

    It is theoretically possible to turn $5,000 account into a million dollars.  But if you want to become a millionaire forex trader you have to have a good backup.

    When you become a profitable forex trader, you’ll have enough money to open a professional live forex trading account to trade professionally and earn real wealth.

    For example, 1000pip Builder’s automatic trading system aims to target 350pips per month. Usually that should be enough, especially for the new Forex traders.

    As you can see, it requires both time and money, commitment and persistence, but ultimately it pays off.

    Or you know a different story?

     

  • Trading Forex – How I made $10,000 on a trading platform?

    Trading Forex – How I made $10,000 on a trading platform?

    trading forex

    Trading forex can be very profitable and you can earn money quickly. Here is how.

    By Guy Avtalyon

    My trading forex story begins like this: I was so tired of “opportunities” that end up taking nothing but a lot of time and money out of my pocket while gaining nothing except lost time and money. Don’t get me wrong, I was willing to put my free time into something that is real.

    The forex market offers more opportunities for quick financial success and financial ruin too than almost any other market. The crowds have always been attracted to it. They include speculators, trading novices, retirees, and professionals looking for a way to get out of debt, increase the excitement in their lives, or simply get rich real quick. I’m one of them.

    If you have a computer and an internet connection, you can trade forex from anywhere in the world, it is the best home-based business of the 21st century. But the problem is that most people don’t know how to trade forex.

    Learning forex trading is not easy

    It requires time, patience, and sustained effort. Most people lack the time to learn forex trading. I wanted to become rich. And the first lesson I got was: I have to fail and learn from my failures. I know that most people fail but do not learn. The skills of the trade aren’t like taking a diploma and slowly walking on the path of your career. In trading, when you “advance”, you don’t even know if you’re making progress in the right direction.

    When the results show otherwise, it’s so hard to admit that the past months or years of “progress” wasn’t that at all. And after admitting that to yourself, you need to learn from it. You have to put your ego aside. Trading without emotions is a MUST.

    Have you ever heard of someone turning a $100 starting capital into $100,000? Maybe you have. Well, such stories were and still are very rare. You really must have the full picture.

    I have to tell you some big truths.

    Trading forex is not a shortcut to instant wealth.

    The old saying “It takes money to make money” is a precise one, Forex trading including. What would you have to do to start at  $100 and have a trading account worth $10,000 a year later?

    Almost any pattern of gain or loss is theoretically possible on the forex. But return on investment (ROI) calculator shows you that to accomplish this, your annual rate of return on investment needs to be 9,900%! If you enter and close out one trade every day of the year, the average profit on each trade would have to be at least 464 percent on those 100 bucks! You’d have to more than quadruple your money every day to come even close to $10,000 at the end of a year.

    Does this sound like something that’s happening in the real world?

    There’s something so deceptively rational. The idea to start with $100 and turn it into $10,000 needs to be shown into return rates to show how absurd this really is. It may be theoretically possible, in reality, it’s no more likely that your cat is starting to fly.

    No matter what you were told, you have to know that your starting capital is the place to start. Having a good starting capital can help you to set your trading goals, define your risk management, and adapt your trading system and position management around your starting capital.

    For many traders, a starting capital of $10,000 should be a good starting point. Depending on other factors such as leverage you can start making profits for as little as $10,000.

    The math for trading forex

    Assume you start trading with $30,000 and you can risk on each trade is $300 (1% of $30,000). You use 4:1 leverage, which gives you $120,000 in buying power (4 x $30,000) and utilizes a strategy that makes you $0.21 on winning trades and you lose $0.12 on losing trades.

    A good trading system will win 60% of the time. Your average is 5 trades per day, so if you have 20 trading days in a month, you make 100 trades per month.

    60 of them were profitable: 60 x $0.20 x 2300 shares = $27,600

    40 of them were unprofitable: 40 x $0.13 x 2300 shares = ($11,960)

    Let’s say your cost per trade is $20 (to get in and out). Your commission costs are:
    100 trades x $20 =$2000.

    If you pay for your trading platform or exchange entitlements then those fees are added in as well.

    That means, you can make approximately: $15,640 – $2000 = $13,640 or about a 45% return per month.

    Return on a single trade

    As your account grows, your position size and your income will become larger.

    Thanks to the availability of leverage, forex traders can make a return on a single trade. When multiples of the margin they used to open the trade. But, leverage is a double-edged sword. It can also mean big losses. Reliance on excessive leverage as a strategy typically leads to the destruction of your account capital in the long run. This is because it only takes one adverse market move to drive the market far enough and trigger losses. You need to view forex like you would any other market and expect normal returns by using conservative amounts of no leverage.

    Websites that propose big and fast returns, to start with $100 and turn it into $10,000 in a short time, or imply that you can somehow get rich quick on the forex starting with very little are openly speaking frauds.

    What you can do?

    In the last few years, many pro traders have started their own forex signals services that provide trading signals to their subscribers via email and SMS.

    Copy the trade of these pro traders onto your own account the instant they are made.

    Now, what this means is that the pro trader is going to do all the market analysis, decide which currency pairs to trade and when to enter and exit the market. You don’t need to do any of the stuff above.

    Follow elite traders when trading forex

    At the same moment when pro-trader makes the trading software will instantly copy that trade onto your trading account.

    So, if the pro trader makes a winning trade, you also make a winning trade and if the pro trader makes a losing trade, you also make a losing trade.

    Try the best forex signals service in your opinion on your demo account. Install the trade copier software and start copying the trades made by the pro trader.

    At the end of the month, evaluate the performance of the forex signals. If not satisfied, go for a refund. After several tries, you will be able to find a good forex signals service.

    Most pro traders make around 1000 pips per month. 1 pip on a standard account is equal to $10. 1000 pips per month mean making $10,000 per month.

    Voila! You earned your $10.000!

    But before all, make sure you test the signals for at least two months on your demo account before you start trading live.

    And you should know some basics of forex trading. You can learn that online for FREE. Most of that information is available for FREE.

    Good luck!

  • Forex Scams and How to Avoid Them

    Forex Scams and How to Avoid Them


    There is a high level of possibility to get trapped in some Forex scams. Here is how to recognize them and avoid falling in them.

    By Guy Avtalyon

    Forex scams are the reality but you must know how to avoid them

    The Forex market is among the most active trading markets in the world. Hence, participants are ranging from multinational corporations to large banks, to speculators, to governments, and a small fraction of individual professional traders. Even more so than other markets, investing in Forex can be very profitable.  

    However, there is a risk involved in these investments but we’re not talking about normal risk in any type of investment. I’m talking about Forex scams, where the investment is simply an obvious case of fraud. We all can find on the internet how individual traders complain through forums about how their brokers screwed them.
    The forex market involves very active trading of over $1 trillion each day. Futures and currency options put the trading at closer to $5 trillion daily.

    Still, there are a lot of opportunities for many forex scams over promises of quick fortunes through “secret trading formulas” or algorithm-based “proprietary” trading methodologies.

    What are Forex scams? 

    For example, signal sellers. One of the challenges a novice forex investor faces is determining which operators to trust in the forex market and which to avoid. The signal seller is offering a system that purports to identify favorable times for buying or selling a currency pair. They all claim they want to provide information that leads to favorable trading opportunities. But signal sellers usually charge a daily, weekly, or monthly fee for their services. Otherwise, how they can earn?

    How does typical work? 

    The scammer gains the trust of his/her victims with a promise of a great and quick profit. Indeed, it’s possible to make a big profit by trading on the Forex market, but not in the way that the fraudster promise. The scammer takes money from the client (actually the victim) and claims that he/she will earn big profits by trading currencies on Forex. In the beginning, the profit is big. But this profit was not realized by scammer’s trading on Forex. The scammer uses the money of newer customers to pay promised earnings to previous clients.

    But, victims of fraud, thrilled with good earnings, often decide to invest even more money with the fraudsters. In addition, they often recommend a good opportunity to earn money for their friends so that the network of clients is rapidly increasing. The scam ends after the inflow of new customers ceases to exist or be diminished to the extent that the fraudster is no longer able to pay good earnings to older clients. Then the victims realize that they were deceived and that had lost everything they had invested.

    How to identify Forex scams?

    The easiest way to identify a fraudster is if he/she requires a client to deposit money in cash, bypassing payments through the bank. Real Forex brokers work solely payments through banks. Real Forex brokers provide customers with access to the market where the client decides which currency to buy or sell, depending on which trading result is. Additionally, every client at any time of the day or night can access to the account and can track the status of his account in real-time.

    How to avoid Forex Scams?

    Since you are into currency trading to make money, you must know how to avoid Forex scams. The information here will help you a lot on how to avoid Forex scams.

    Whenever you are dealing with some site, be cautious, and don’t trade with websites that say you that Forex trading is simple. The scammers capitalize on the human nature of wanting things quick, easy, and convenient. Method to avoid Forex scam is for you to keep away from any website that claims to have a secret trading system. Don’t ever fall victim to these incorrect offers. A lot of Forex traders believe the fact that there is a holy grail or secret trading method that will make a profit for them overnight. Reading reviews of experts will help you to find the broker that fits your Forex requirements. Reviews are a good solution anyway, they can help you to recognize those that can bankrupt soon or save you from scams. The truth is that you need a lot of hard work and patience to succeed in Forex trading.

    A lie or truth about Forex?

    If you’ve ever searched by some browser for the word “Forex”, you weren’t surprised that some sites write about Forex fraud, often placed on the first page. You will find that Forex is a big fraud and legalized robbery. The “big”, that is brokers and large financial institutions, have teamed up to take the money from the “little ones”, that is ourselves.

    We can completely calmly say that Forex is no fraud and it will never be.

    So, the Forex market is really great as the potential for earning. Forex trading is real, and Forex at itself is not a scam. People are something else. Some people will always find a way to cheat, deceive, dupe, swindle. That’s the nature of human beings.

    That still does not mean the Forex is a scam, not at all. Everyone should be on the lookout for any potential on Forex and invest their money wisely.

    If you have personal experience, share it with us and others.

  • What is needed to trade on Forex?

    What is needed to trade on Forex?

    Are you disciplined?

    2 min read


    What is needed to trade on Forex? To come to the answer we must clear several things.

    CONCEPT OF FOREX TRADING

    Forex represents the foreign exchange/currency market. The word forex itself is made of two English words: foreign and exchange and signifies the purchase of currencies from different countries.

    Unlike other stock exchanges, Forex does not have its physical seat in a city. It exists in an electronic network consisting of large financial institutions.

    Today, Forex is the largest financial market, which has a daily turnover of around $ 5.5 trillion a day.

    You can complete this whole process online

    The term currency market means the sale of one currency with the simultaneous purchase of the other. As currency pairs are traded, in order to profit from the shift in the exchange rate, you need to buy the currency that you think will strengthen and sell the other.

    There is no need to wait for a growing market to profit. At any moment, one currency will strengthen in relation to the other.

    The FX market is constantly creating opportunities for investment

    What is needed to trade on Forex, the essential part

    Since nothing concrete and tangible anything is bought and sold, this type of trade can be a little confusing. You should think that you are buying a part of the value of a country. If you buy a Japanese yen, you are buying a part of the Japanese economy that is in direct correlation with what the market thinks about the current and future health of the Japanese economy. Generally, the established exchange rate of the two currencies is a ratio that reflects the state of one economy in relation to the state of another economy (the state, the currency).

    Forex is opened 24 hours a day, except on weekends, so that Sunday trading starts on Sunday from 21:15 CET and runs until Friday at 23:00 CET. During the day there are several time intervals that coincide with the working hours of the world’s largest stock markets.

    Who trades on the Forex market?



    Forex traders can be classified into two groups, hedgers and speculators.

    Hedgers: governments, companies (importers and exporters) and some investors who are exposed to exchange rate changes.

    Speculators: This group, which includes banks, funds, corporations, and individuals, creates artificial pressure on the course in order to profit from variations or price movements.

    Basic terms

    Pip
    Represents a change in the ratio of the currency by one decimal. It is the smallest unit change course. Pip is the last decimal in a currency relationship

    Stop and Limit – Orders
    Often the trader wants to limit the loss in the position he has opened (in that case he sets the “stop” order) or wants to take profit at a certain level, which is acceptable to him (in this case he sets a “limit” order).

    Long – Tremin used for the purchase order,
    Short – tension used for a sales order,
    Bid – bid price,
    Ask – the price that is claimed,
    Buy – Shopping,
    Sell – sale,
    Spread – the difference between the sale and purchase price,
    Chart – graph
    Time frame – time period,
    Candlestick –  Candlesticks show that emotion by visually representing the size of price moves with different colors.

    What is needed to trade on Forex?

    Before you start trading the currency, you need to open an account with a Forex broker. Our recommendation is that before you decide on trading on Forex, open a demo account with one of the brokers so that through the use of the platform, you will continue to monitor market activities and learn more.
    What is needed to trade on Forex

    Conditions for Success

    You must have a good knowledge of technical and fundamental analysis, as well as managing your account. You should also know the psychological aspect of the trade and that you are disciplined. To be able to trade Forex successfully, there is a whole world of education, really extensive analysis and countless hours of tracking a very large number of relevant and potentially relevant information, all without any guarantee that the right decision will be made.

    So once again, the investment rule has been confirmed: high risk must be taken to achieve high income.

    To learn more about Forex trading follow Educational series HERE

    Risk Disclosure (read carefully!)