Foreign exchange market is a biggest financial market in the world and its average daily volume of trade is around four trillion. People choose to invest in this market because of different reasons like getting huge profit in minimum time, middleman, 24 hour market in which entry is very easy. In fact, anyone can enter in it and it also has high liquidity. There are also fewer risks associated with this trading system and they are also manageable. Earning profits is easy in it but there are also few myths associated with this trading. For performing well in foreign exchange market, it is recommended to avoid the myths which are explained below:
Market is Predictable
This myth is very common and there are many companies available on internet that claim of developing a calculator, scientific method or indicator which predicts market. Though this is true to some extent but there are rapid changes in market so these systems don’t work after 6 months. There are many people who enter in this market on the basis of just predictions but most of them end up in loss. Predictions are important but not alone; they must accompany with proper market research.
No risks in getting rich
There are many people who believe that Forex is free from business risks and they can become rich in less time. This is totally false as there are many risks associated with Forex market just like with any other business. Some of these risks are market risk, country risks, political and economic risks and currency fluctuations. Though, you can earn huge profits but they come with dedication and hard work. You can also avoid these risks by using different risk management methods. Study more on modern Forex trading…
Advice from an Expert is a route towards success
This is also a common myth among many traders. They think that advice from expert lead towards profits. Advice …
Forex trading has a strong relation with economic crisis because these crises affect the value of currencies in a great way. The results of crises are either depreciation of currency or its appreciation the Forex market. Increase households consumption and good economic growth guarantees stable and appreciating currency. Contrary to this, the currency of countries with unstable economy is depreciated. Because of strong economies and financial policies, Germany and United States are considered major economic powers. From this we can definitely say that US dollar and Euro are the most stable currencies in the Forex markets. However, in times of economical crises their currencies also experience depreciation. These times are of trouble for the traders as making profit in these situations is very difficult. However, there are still many ways of making profit and some of them are mentioned below:
Considering economic data
For assessing economic situation of any country there is lot of data available in the form of numbers and statistics. This data has indications about the employment rate of country, trade balance of country and also on consumer’s purchasing power. By using this data decision can be made about trading any particular type of currency. Most of the investor of different countries has a motive of improving currency of their own country which faces depreciation and for this purpose they trade their currency with low value currencies. As a result of this weak currency loses value but specific country currency strengthens. On the lookout: https://www.economy.com/freelunch/default.asp
It is not always the economy of the currency that determines the strength of a currency but in many cases the country in debt also has weak currency because it is unable to attract many investors. Trade balance is the relation between exports and imports of country and it can also be used for making profit in times of the economic crises. Positive balance of trade is always favorable for …
Forex robots are used for making your Forex transactions totally automated. Basically, a Forex robot is software that is given to traders who have no knowledge about complex Forex trading market algorithms. Nowadays, there are many Forex trading robots available in market and all of them are known to be the best. Some of the popular robots are: FAP turbo, Forex auto pilot, Forex funnel, pips leader and Forex mega droid. Some reasons for using these robots in Forex trading are mentioned below:
No continuous monitoring required
One of the biggest advantages of these robots is that there is no need to sit in front of the computer for a long time. Trade robots monitor the market24/7 and not only this they also automatically execute your trades.
Chances for large losses are minimized
In trade robots the chances of bigger losses are minimized with the help of the programmed stop losses. This is beneficial not only for inexperienced traders but also for experienced ones.
Limited Knowledge is required
As trade is automatically executed by the robots so there is little knowledge required about this trading currencies in markets.
Currency pairs are searched for you
It is the job of the trade robots to look for currency pairs. They present multiple pairs and you can choose any pair from which you thing maximum profit can be earned at lower risk.
Percentage of winning is high
As compared to manual methods of trading in Forex markets, the percentage of winning with Forex robots is high. This is because they are build technically and also posses all risk management tools that guarantees success.
Multiple trade accounts can be handled
Another advantage of trading with Forex trade robots is that multiple accounts can be monitored. In this way you can earn profit from all your accounts.
Easy to use
As these robots are software’s so they are very easy to use. Detailed information …
These days people who are looking to make money the easy and stress free way are looking for ways to make their endeavor even more simple. Since there is no magic solution for success in trading on the foreign exchange (Forex) theories of popular mathematicians and ‘coincidence’ measures used by them are considered to be the best deal. There are two theories which are very popular for predictions on the forex market, the Fibonacci summation and ratio theory, and the Elliot wave theory.
Fibonacci Ratio and Summation Theory
Fibonacci was an Italian mathematician who worked as an accountant for the royal family during the 13th century. During his experiments on the farm animals, he figured out a sequence of numbers that were added up to form a series. His Summation Theory suggests that each consequent number in the sequence is a sum of the two preceding numbers. For example, …,1,1,2,3,5,8,13,21,… and so on. At a certain point, if you divide the bigger number by the smaller one, you get a series of percentages including 38.2, 50, and 61.8.
These percentages are the basis for the predictions made in Forex trading. It is believed, indeed, it has been observed as well that by a strange coincidence, these percentages are the exact turning-points in the market trends! It has been observed that quite often, a NASDAQ index has changed course as soon as it is going to reach or has reached a 61.8% of either high or low trend. The turning points that are usually predicted are:
A continuity of the current trend in a 38.2% market shift
A reversal of the market at a point of 61.8% shift
An ambiguity of direction in a 50% shift, usually resulting in a parallel upwards movement
Fibonacci ratios occur in many aspects including nature which is why they have been seen in Forex as well.
Elliot Wave Theory
Elliot was an accountant who worked …
The term Forex is a short hand of Foreign Exchange and currency trading is a business in which one currency is exchanged with another and profit or sometimes loss is gained. The history of Forex trading is linked with the barter system in which goods were exchanged. After this system, many countries came up with the currencies which were used to buy goods. Once currencies were established, trade expanded. Since then, Forex has evolved which at that time used to exchange goods.
Modern Forex Trading Concepts
Modern Forex came into existence after First World War. There were many currencies at that time with gold as a currency standard. Because of this trade became easy as gold was present everywhere and it could be traded worldwide. However, gold trading got certain problems as after gaining power countries imported more goods which results in a steady gold outflow. Now gold supply became less and the money supply diminishes. This causes serious financial problems in countries as money becomes devalued. Therefore, in 1931 there was great depression and market slowed significantly.
To overcome this problem, an agreement was made between United States, Britain and France in which all currencies were connected to American dollar. After America’s win in the agreement and war, it became biggest player in Forex market.
Working of Forex trading
Forex market remains opened 24 hours as it involves trading currencies of different countries. There are two types of currencies, one is called base currency and other one is known as counter currency. Trading takes place in pairs. In a pair currency quoted first is called base currency while 2nd one is called counter currency. For instance is a pair Euro/US dollar, Euro is base and US dollar is counter currency. Counter currency is also called quote currency.
Demo trading account
The first step in Forex trading is a demo trading account which can be obtained from a Forex broker. …
Forex signals are Forex trading tools which are effectively used by traders as they indicate perfect currency pairs, time of their availability and also their price. They are considered a sure way of earning profit. These signals are mostly used by traders who are not professional in this field or who don’t enough time for paying attention to this business. For using Forex signals service traders have to subscribe for it and it is done with the help of short messaging service or emails. Some details about these signals are mentioned below:
Ways of generating Forex signals
There are two ways of generating Forex signals:
Some programs commonly known as the Forex robots use advance algorithms for market evaluation and make predictions about currency pairs which are best for trading.
Careful study of market by human analysts in order to find the currency pairs best for trade.
Ways of sending signals to subscribers
There are many ways of sending signals to subscribers but for this Forex software needs to be installed in computer. This software is costly and most of the subscribers think about other ways of receiving signals such as via RSS feeds, SMA, email and tweets. Read more: https://www.quora.com/How-reliable-are-Forex-signals
Information in Forex Signals
The information present in Forex signals is about the currency pairs and this information is utilized by traders to make predictions about trends in the market. In the Forex signals there are different charts and graphs which give indications that whether the currency rate is going in the upward direction or in downward direction. The performance forecast of a specific currency pairs is also based on past performance.
Things Forex signals indicate
Three things that Forex signals indicate are:
Best entry point for those Forex traders who look for purchasing Forex currencies.
Best exit point for traders who hold specific currencies.
Stop loss point of currencies which are devaluating.
Time frame for signals
There is …
One of the most prominent features of Forex is the use of leverage. As a good Forex investor you are required to use leverage in all your Forex deals. Leverage can allow for you to generate a good volume of profit. As the values in Forex deals change very frequently and the money is bound to change hands quite often, it is a good thing to be careful of how you risk your investment. There are various leverage ratios that are offered based on the amount of your invested capital. However, these will be discussed later. First, we will look at the basic concept behind leverage.
The Main Concept
Many people often get worried when the term leverage is mentioned, especially in the context of Forex trading. How should leverage be evaluated and how should it be employed are the main points of interests here. If you are new to the field, then you should be careful how you use it as it may cause you much harm if improperly applied.
The volume of leverage to be used should be based upon your personal preferences. A trading account with hired brokers most commonly uses trading lots of about $100,000 each. Hence, to trade with such an amount you need to have it in your account to place the deal. However, very few people have that much money lying around to be invested at a moment’s notice. This is why leverage is offered by brokers. It is best if one keeps consulting the broker as to the amount of leverage needed. Also, it depends on the type of account that you keep for trading purposes whether you can afford a high or low leverage.
Application of the Leverage Amount
It is highly recommended that you specify the money that you can afford to employ in the trade. The risk of losing the money should be your guiding principle but do …
CFD (Contracts For Difference) are contracts which are made on the trading platform but are slightly different from traditional trading. They are more flexible than other trading regimes like spot and forward contracts.
The fundamental elements of this trading are quite simple. All you need is a good grasp on the trading terminology used by professionals. The basic idea in CFDs is that the trader needs to keep a sharp eye on the trends in the market. If the market is leaning towards a rise, the offer price or the highest quotation may be purchased. On the other hand, when the investor feels that a market is going to fall, he will purchase the bid price. This way, he can avoid unnecessary losses through misleading quotes. CFD trading has emerged as one of the common trading platforms in the world which may be done at the individual level as well. This trading emerged after the collapse of markets in the worldwide market meltdown of 2008.
How CFD Works
CFDs traders are not actively involved in the actual investment. They trade on the quotes of currencies presented by stock exchange companies. They do not own the commodity they trade for, but set a price for the eventual sale of the instrument and wait for the deal to come through in order to realize their own profit from the spread (difference between buying and selling price).
CFD Traders and Other Traders
The most important thing to note for the CFD trader is that he should be able to set goals according to his/her own personality and be focused on the deal that is going on. There are not many differences between the ordinary trader and a CFD investor. The only difference is that the CFD trader needs to be more careful in the deals that go on because they do not own the real asset and in case things turn out …