FX Trading

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FX trading is short for Forex trading. Forex is short for Foreign Exchange.

What makes it different than FX investing is that trading is more short-term in nature than investing.

FX trades can last from shorter than a minute to days or even weeks. Those trades that are opened and closed on the same trading day are called FX day trades.

An FX trade can be viewed simply as a complete transaction. Let’s say for instance you are bullish the EURUSD and you then buy the EURUSD. When you sell the EURUSD then you close your transaction and that makes for a complete trade.

FX trading has become very, very popular especially now that high-speed internet connections and market data are more readily available. FX traders look to profit from the many short-term moves within the market. FX investors on the other hand may view these short-term market fluctuations simple as market “noise” (insignificant moves).

Trading these short-term moves can be extremely profitable for those who know what they are doing. There are many of these short-term moves within every major trend as well as when the market moves sideways.

It should be understood that since FX trading involves a higher frequency of transactions that the transaction cost are an important concern. This is why markets must be evaluated because they need to move actively enough to provide enough profit potential for the FX trader.

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Forex Investing

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Forex investing should be viewed different than Forex trading because it is. Investing, regardless of the market traded is longer term than trading. Most people are familiar with Forex trading so let’s cover a bit more about Forex investing.

Those who wish to invest in Forex will typically have several things in common.

– They will be looking for larger moves in the Forex market and therefore a larger amount of profit per trade.

– Most will have a larger amount of working capital – greater potential reward comes a greater level of risk.

– Willing to accept a larger amount of risk – The level of comes with the larger potential reward per move.

– Less hands on – Most Forex investors don’t want to look at the screen every single day, but would rather check on their investments less frequently.

– May use more fundamental data – Forex investors may use more fundamental data than the Forex trader does. They may look at a country’s basic economic data to determine the long-term outlook for that country’s currency. Such data may include, inflation, deflation, gross national product, monetary policy, etc.

Forex investing may also be completely hands-off is the investor places their funds in a managed Forex account. In this type of account the account managers will usually take a percentage of the profits as compensation for their services. This type of fee is referred to as a performance-based fee.

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What are the commissions for trading in Forex?

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What are the commissions for trading in Forex?

With Forex trading, the brokers constantly advertise “no commission”. And, of course that's true – except for a few brokers, who do charge a commission similar to stocks. But also, of course, the brokers aren't performing their trading services for free. They too make money.

The way they do that is by charging the [Read more…]

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The Basic Operating Principle of Forex Megadroid

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Forex Megadroid is one of the most popular trading robots today, and as a proof, more and more traders are purchasing this trading robot and use it to help them ease the burden of manual trading. The Forex market is constantly changing and the developers of this product always need to conduct extensive researches in order to further improve the performance of the [Read more…]

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Forex Trading Platform

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A Forex trading platform is used by the Forex trader to place online Forex trades. The platform is software that you download to your computer from your Forex broker. When you open a Forex trading account your broker will give you a username and password you will use to access your account info as well as place trades.

Trading platforms vary greatly in what is offered. Platforms that offer premium features may carry a fee or a minimum opening account balance. Some platforms include a Forex charts component and even let you trade directly from the chart.

The trading software you get from your broker doesn’t have to have every possible bell and whistle. You can trade Forex quite successfully with the simplest software.

Here’s what to look for when searching for a Forex trading platform:

Ease Of Use – Is it easy to use or do you feel you have to jump through hoops to place a simple order.

Allows You To Place A Wide Variety Of Order Types – any software that doesn’t allow you to place the orders you need won’t be of much use to you. If, for instance, you are not allowed to place limit orders (which would be ridiculous) simply find another broker.

Easy On Your Computer System Resources – This is especially important if you will be using your computer for other tasks while running your trading software.

The best way to decide which Forex trading platform is best for you is to try out a few different ones. Forex brokers make this pretty easy these days as most all of them offer a free Forex demo account. The demo account is a great way for you to familiarize yourself with the platform.  So make sure that you try out a few different ones before you make your final decision.

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Why You Should Learn To Trade Forex

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Any prudent investor or business person will tell you that you need to learn Forex trading before putting a single cent of your money in the business. While it is a highly lucrative and rewarding venture, Forex trading has been the cause of financial ruin for a good number of people. This is one area where knowledge is not only power, but goes on to be everything you need to survive.

Success in the Forex business is not possible through luck or instinct. It requires intensive research, excellent skills, great patience and a deep knowledge of the subject. Every entrant needs to take their time to learn Forex trading from its basics to the most advanced levels possible. Considering that this is a very wide and deep subject, it has always required one to commit their time and energy for a substantial duration. Online training on how to conduct Forex trading has made the learning process easier and more flexible for those looking to join the the Forex trading ranks as well as those already involved in trading.

There are several benefits of opting to learn Forex trading online. The first of these benefits is flexibility. Most of those looking to pursue training in Forex trading are either employed or engaged in businesses that take up most of their time. Their schedules are tight and they may not find time to learn Forex trading through the conventional classroom system. An online trading program is the best option as it allows potential traders to go through their course work at times that are most convenient to them. Learning is at a personal pace and this allows for thorough understanding of the subject.

Learning online also presents significant financial benefits for trading students. Due to the minimal resources demanded of the trainers, online learning is a very affordable option. Those who learn Forex trading online will pay a fraction of what their counterparts in a physical, brick-and-mortor classroom will pay. Other costs that are related to the learning process, such as transport do not exist for online Forex students.

After you learn Forex trading, you will need to practice until you have mastered it. An excellent and risk free way of doing your practice is through online trading simulators. Once you have gained the confidence and experience to go into real trading, you will find that you could start to make profitable trades from the comfort of your home or office. Forex trading does not have totake up all of your time. You could comfortably work on other projects while also engaged in trading. One of the nicest things about Forex trading is the flexibility it affords you.

While it may appear like it is an easy and straight forward undertaking, all trading carries great risk. Investing will require that you first learn Forex trading, practice with online trading simulations and then gradually go into the business of real Forex trading. A slow but sure approach is the best way to get into it as it minimizes losses and helps in the building of your trading confidence.

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The Scientific Way to Trade Forex

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For those looking for the scientific way to trade Forex I got some good news for you. In order to be scientific about the way you trade Forex you’ll need to have rules and be consistent about following those rules. Let’s begin our exploration.

You trade Forex scientifically you’ll first need to research Forex scientifically. The first part of this process is that we must observe the Forex market and then we must create a hypothesis based upon our observations. Don’t worry, a hypothesis isn’t anything complex is simply a proposed explanation for some observable phenomenon. Let’s say for instance that you have observed a certain pattern when looking at the daily chart of a particular currency pair. In your observations you noticed that when this pattern occurs the currency pair moves upward in value relatively frequently.

Your hypothesis in this case is that when “X”pattern occurs then the market moves upward. You now have a hypothesis on which to base your research. From here you would continue to observe the pattern and seek to find what percentage of the time the market does move upward and by how much.

At this stage if it is discovered that you can buy this market based upon your newfound pattern then you may have the basis of a profitable Forex trading system. As you can see the scientific way to trade Forex can aid you in your research as well as move you closer to finding a consistently profitable Forex trading method.

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Trading Price on Forex

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Trading price of Forex has become increasingly popular.  This particular technique is also known as “trading Forex with no indicator” as well as “no indicator Forex trading”.

The principle behind this is actually quite simple.  Trading decisions are based strictly upon the price action of the markets.  What exactly does this mean?  Good question.  Price action trading seeks to find relationships between different price levels.  What you want to find in this type of trading is a price pattern that has successfully preceded a favorable market move.  For example, if you find that the market moves up after three consecutive higher highs you may want to place a buy order.

It is important to note that you cannot arbitrarily pick out a price pattern on which to base trading decisions.  This is where your Forex trading research will come in.  You will need to make certain that the price pattern you have chosen to trade with has a good probability of repeatable success.  Once you’re comfortable that the price pattern is one you can depend upon you can then start to test it out in real time.

There are numerous ways of trading price of Forex in order to be profitable.  Your very best bet is to do your homework to make certain that the price patterns you have chosen will be those you can rely on in the future.

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Trading Forex Without Indicators

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One of the most popular trends in Forex trading today is trading Forex without indicators. Some trader feel that indicators lag the price action too much and that they miss important parts of Forex price moves.

You can trade sucessfully with or without using indicators. It really is a matter of what you have found that works for you.

To trade Forex without indicators you can use either a simple bar chart or a candlestick chart. With either of these you will be able to see price patterns which you may use to make trading decisions. Your objective is to find chart patterns which have a good probability of repeating themselves. Once you have found several realiable price patterns it will be much easier for you to trade Forex consistently.

Many Forex traders have found trading breakouts to be an effective means of trading without indicators.  A simple example of trading a breakout is to buy when the price moves higher than the highest high of the last 10 price bars ( or candles). In this case the price “breaks out” of the range of the last 10 bars.

Trading breakouts is just one of the many ways to trade Forex without indicators.  Finding good patterns to trade can be as simple as observing the price action on a Forex chart using your favorite timeframe(daily,n hourly, etc).

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Forex Position Trading

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Forex position  trading is an excellent choice for any and all Forex traders. This is how it works. Position trading is simply long-term trading. Essentially it is named as such because you establish a “position” in your chosen currency pair. So basically you can use the term “position trading” interchangeably with “long-term trading”. One of the nicest things about long-term Forex trading is the ability to build a large “position”. This entails using a money management strategy to increase the number of contracts in your position as the trend moves in your direction. The ability to build large positions through long-term trading has proven to be one of the most lucrative ways to trade Forex.

Forex position  trading is often overlooked because many traders don’t feel that it’s sexy enough. One reason for this is that position trading does not provide many traders with enough “action” to suit their trading style. This is especially true for beginning Forex traders as they have yet to learn the many benefits of patience in Forex trading. In our society of almost incessant obsession with instant gratification, it is no surprise that most new traders want the Forex market to “show me the money” and do it as quickly as possible.

Another reason beginning traders may shy away from Forex position trading is the potential for large swings in equity that are common when holding a trade  for an extended period of time. Longer-term trading strategies can have large drawdowns and large drawdowns can make anyone a bit nervous, especially undercapitalized new Forex traders.

I personally enjoy position trading in the Forex market. Although I do trade on a short-term basis as well, the lion’s share of my equity in my various accounts can be directly attributed to position trading. My last such trade was about five months long and I was fortunate for it to be an extremely profitable one. I understand that five months may be way too long term for you if you are just starting out in trading, but I can assure you that you would simply be amazed once you learn how to position trade properly and watch your account equity grow exponentially rather than linearly.

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