Sunday, November 7, 2010
eToro fxcm Tournaments
eToro Tournaments - Running weekly on the eToro real and demo platforms, these tournaments are a great way for traders to show off their skills and win real money (deposited in their eToro account). The real money tournament prizes are more lucrative, but a nice amount can be won on the demo tournaments too, with no risk.
World FX Tour
World FX Tour - Holding daily and weekly tournaments, the World FX Tour is a great place for anyone wishing to participate in forex trading tournaments. The tournaments are open to anyone using MetaTrader 4 or FXSpyder (regardless of broker). Many types of tournaments are available.
Forex TradingTournaments
Forex Trading TournamentsMany forex brokers hold trading tournaments for their traders. They are usually open to both discretionary (human) traders, and to fully automated trading systems - although some tournaments exclude one group or the other. Most tournaments are held using demo accounts, so this is a good way for traders to show off their skills without risking any investment capital. This is great for traders looking to become money managers. The winners also normally receive cash prizes, which can at times be quite substantial.
Forex Tester
Forex Tester - Based on the MetaTrader 4 interface, Forex Tester allows traders to backtest different strategies simultaneously in a very well though-out environment. Automated trading as well as discretionary methods can be tested using the software package. Cost is very reasonable considering how powerful the tool is. A free trial version is available if you would like to test drive it.
Trading forexx soft
Trading Solutions - Professional level chart pattern recognition using neural networks. Can be used for any financial instrument. Optimizes results using genetic algorithms. Trading Solutions provides a very unique way to take advantage of complex recurring patterns in chart data. The "Trader68" package automates order execution for signals generated by the Trading Solutions neural networks.
traders software
In this section we list some of the tools our traders have found useful, and we review each one so you can weigh their pros and cons yourself. Every trader is unique and has unique needs. We hope that the tools you find here will help you squeeze more out of your trading day.
Forex Softwares
Forex Software
Just like any professional, many successful currency traders rely on a specialized set of tools to help them ply their trade. These range from specialty charting packages to backtesting software, chart pattern recognition software, automated trading algorithms, and many more
Just like any professional, many successful currency traders rely on a specialized set of tools to help them ply their trade. These range from specialty charting packages to backtesting software, chart pattern recognition software, automated trading algorithms, and many more
the Forex market continued
Structure of the Forex market continuedOne of these is that it was not traditionally used as an investment vehicle. It had, and still maintains to some extent, a somewhat more utilitarian purpose. In today’s globalized economy, most businesses have some international exposure, creating the need to exchange one currency for another in order to complete transactions.
Forex Price
Forex Price Dynamics
In order to gain an understanding of what actually moves the prices, or exchange rates in the interbank market, we must first understand that for any transaction to take place, there must be a buyer and there must be a seller – there must be a counter party for every trade.
In order to gain an understanding of what actually moves the prices, or exchange rates in the interbank market, we must first understand that for any transaction to take place, there must be a buyer and there must be a seller – there must be a counter party for every trade.
Forex market
Structure of the Forex market
The forex is unique among financial markets in a number of ways. One of these is that it was not traditionally used as an investment vehicle. It had, and still maintains to some extent, a somewhat more utilitarian purpose. In today’s globalized economy, most businesses have some international exposure, creating the need to exchange one currency for another in order to complete transactions.
The forex is unique among financial markets in a number of ways. One of these is that it was not traditionally used as an investment vehicle. It had, and still maintains to some extent, a somewhat more utilitarian purpose. In today’s globalized economy, most businesses have some international exposure, creating the need to exchange one currency for another in order to complete transactions.
Forex Position
Forex Position Sizing
For many new forex traders, the promise of quick riches is difficult to resist. That is the main reason why every day so many people from all walks of life begin trading the forex market. While some element of this “keep your eyes on the prize” mentality is necessary to get traders through the tough times, on any given trading day one should really focus on other things first.
For many new forex traders, the promise of quick riches is difficult to resist. That is the main reason why every day so many people from all walks of life begin trading the forex market. While some element of this “keep your eyes on the prize” mentality is necessary to get traders through the tough times, on any given trading day one should really focus on other things first.
Forex Brokers
How Forex Brokers Work
Like any other business in the history of business, your broker’s raison d’etre, is to make as big a profit as possible. There are about as many ways to go about this as there are brokers. For those who are in it for the long haul, however, it is generally best to adopt a set of practices which are deemed fair by their clients: certain boundaries are set, and operating beyond them can cost a brokerage its reputation, and along with it its clients
Like any other business in the history of business, your broker’s raison d’etre, is to make as big a profit as possible. There are about as many ways to go about this as there are brokers. For those who are in it for the long haul, however, it is generally best to adopt a set of practices which are deemed fair by their clients: certain boundaries are set, and operating beyond them can cost a brokerage its reputation, and along with it its clients
forex tradingg
The concept of leverage is really quite simple, but its true meaning often becomes lost in the mountain of marketing-speak most forex brokers dish out at us traders. The misconceptions always arise as a result of the interchangeable usage of the words “margin” and “leverage”. These two concepts are related, but are in fact not interchangeable except in the most extreme (and suicidal) case where a trader decides to use the maximum leverage available to him under the broker’s house rules.
Forex Hedging
Forex Hedging
There are a number of forex dealers, dare I say even the majority, who allow clients to practice what is commonly referred to as “hedging” in the forex. What this means is that they allow clients to open both long and short positions in the same currency pair, at the same time. Other dealers, on the other hand, automatically close your positions when you enter orders that are exactly opposite to your open positions. There is an ongoing debate among retail traders about whether the practice of “hedging” is useful or not.
There are a number of forex dealers, dare I say even the majority, who allow clients to practice what is commonly referred to as “hedging” in the forex. What this means is that they allow clients to open both long and short positions in the same currency pair, at the same time. Other dealers, on the other hand, automatically close your positions when you enter orders that are exactly opposite to your open positions. There is an ongoing debate among retail traders about whether the practice of “hedging” is useful or not.
Forex Articles
Forex Articles
Choosing a good forex broker is one of the most important decisions you need to make at the beginning (or at any point) of your forex trading career. Do not take this decision lightly, but at the same time don’t stress over it – the process does not need to be complicated – just like in your trading decisions, once you do your homework, things tend to fall into place. Chance favors the prepared trader and everything you need to make an informed decision is listed right here.
Choosing a good forex broker is one of the most important decisions you need to make at the beginning (or at any point) of your forex trading career. Do not take this decision lightly, but at the same time don’t stress over it – the process does not need to be complicated – just like in your trading decisions, once you do your homework, things tend to fall into place. Chance favors the prepared trader and everything you need to make an informed decision is listed right here.
Trading forexx
Trading Hours
* 24 hour market
* Sunday 5pm EST through Friday 4pm EST.
* Trading begins in the Asia-Pacific region followed by the Middle East, Europe, and America
Size
* One of the largest financial markets in the world
* $3.2 trillion average daily turnover, equivalent to:
o More than 10 times the average daily turnover of global equity markets1
o More than 35 times the average daily turnover of the NYSE2
o Nearly $500 a day for every man, woman, and child on earth3
o An annual turnover more than 10 times world GDP4
* The spot market accounts for just under one-third of daily turnover
1. About $280 billion - World Federation of Exchanges aggregate 2006
2. About $87 billion - World Federation of Exchanges 2006
3. Based on world population of 6.6 billion - US Census Bureau
4. About $48 trillion - World Bank 2006.
Source: BIS Triennial Survey 2007
Major Markets
* The US & UK markets account for just over 50% of turnover
* Major markets: London, New York, Tokyo
* Trading activity is heaviest when major markets overlap5
* Nearly two-thirds of NY activity occurs in the morning hours while European markets are open6
5. The Foreign Exchange Market in the United States - NY Federal Reserve
6. The Foreign Exchange Market in the United States - NY Federal Reserve
Average Daily Turnover by Geographic Location
Source: BIS Triennial Survey 2007
Concentration in the Banking Industry
* 12 banks account for 75% of turnover in the U.K.
* 10 banks account for 75% of turnover in the U.S.
* 3 banks account for 75% of turnover in Switzerland
* 9 banks account for 75% of turnover in Japan
Source: BIS Triennial Survey 2007
Technical Analysis
Commonly used technical indicators:
* Moving averages
* RSI
* Fibonacci retracements
* Stochastics
* MACD
* Momentum
* Bollinger bands
* Pivot point
* Elliott Wave
Currencies
* The US dollar is involved in over 80% of all foreign exchange transactions, equivalent to over US$2.7 trillion per day
Currency Codes
* USD = US Dollar
* EUR = Euro
* JPY = Japanese Yen
* GBP = British Pound
* CHF = Swiss Franc
* CAD = Canadian Dollar (Sometimes referred to as the "Loonie")
* AUD = Australian Dollar
* NZD = New Zealand Dollar
Average Daily Turnover by Currency
N.B. Because two currencies are involved in each transaction, the sum of the percentage shares of individual currencies totals 200% instead of 100%.
Source: BIS Triennial Survey 2007
Currency Pairs
* Majors: EUR/USD (Euro-Dollar), USD/JPY, GBP/USD - (commonly referred to as the "Cable"), USD/CHF
* Dollar bloc: USD/CAD, AUD/USD, NZD/USD - (commonly referred to as the "Kiwi")
* Major crosses: EUR/JPY, EUR/GBP, EUR/CHF
Average Daily Turnover by Currency Pair
Source: BIS Triennial Survey 2007
Related Links
Foreign exchange market
* 24 hour market
* Sunday 5pm EST through Friday 4pm EST.
* Trading begins in the Asia-Pacific region followed by the Middle East, Europe, and America
Size
* One of the largest financial markets in the world
* $3.2 trillion average daily turnover, equivalent to:
o More than 10 times the average daily turnover of global equity markets1
o More than 35 times the average daily turnover of the NYSE2
o Nearly $500 a day for every man, woman, and child on earth3
o An annual turnover more than 10 times world GDP4
* The spot market accounts for just under one-third of daily turnover
1. About $280 billion - World Federation of Exchanges aggregate 2006
2. About $87 billion - World Federation of Exchanges 2006
3. Based on world population of 6.6 billion - US Census Bureau
4. About $48 trillion - World Bank 2006.
Source: BIS Triennial Survey 2007
Major Markets
* The US & UK markets account for just over 50% of turnover
* Major markets: London, New York, Tokyo
* Trading activity is heaviest when major markets overlap5
* Nearly two-thirds of NY activity occurs in the morning hours while European markets are open6
5. The Foreign Exchange Market in the United States - NY Federal Reserve
6. The Foreign Exchange Market in the United States - NY Federal Reserve
Average Daily Turnover by Geographic Location
Source: BIS Triennial Survey 2007
Concentration in the Banking Industry
* 12 banks account for 75% of turnover in the U.K.
* 10 banks account for 75% of turnover in the U.S.
* 3 banks account for 75% of turnover in Switzerland
* 9 banks account for 75% of turnover in Japan
Source: BIS Triennial Survey 2007
Technical Analysis
Commonly used technical indicators:
* Moving averages
* RSI
* Fibonacci retracements
* Stochastics
* MACD
* Momentum
* Bollinger bands
* Pivot point
* Elliott Wave
Currencies
* The US dollar is involved in over 80% of all foreign exchange transactions, equivalent to over US$2.7 trillion per day
Currency Codes
* USD = US Dollar
* EUR = Euro
* JPY = Japanese Yen
* GBP = British Pound
* CHF = Swiss Franc
* CAD = Canadian Dollar (Sometimes referred to as the "Loonie")
* AUD = Australian Dollar
* NZD = New Zealand Dollar
Average Daily Turnover by Currency
N.B. Because two currencies are involved in each transaction, the sum of the percentage shares of individual currencies totals 200% instead of 100%.
Source: BIS Triennial Survey 2007
Currency Pairs
* Majors: EUR/USD (Euro-Dollar), USD/JPY, GBP/USD - (commonly referred to as the "Cable"), USD/CHF
* Dollar bloc: USD/CAD, AUD/USD, NZD/USD - (commonly referred to as the "Kiwi")
* Major crosses: EUR/JPY, EUR/GBP, EUR/CHF
Average Daily Turnover by Currency Pair
Source: BIS Triennial Survey 2007
Related Links
Foreign exchange market
FOREX brokers
Choosing a Broker
There are many forex brokers to choose from, just as in any other market. Here are some things to look for:
* Low Spreads - The spread, calculated in "pips", is the difference between the price at which a currency can be purchased and the price at which it can be sold at any given point in time. Forex brokers don't charge a commission, so this difference is how they make money. In comparing brokers, you will find that the difference in spreads in forex is as great as the difference in commissions in the stock arena.
Bottom line: Lower spreads save you money!
* Quality Institution - Unlike equity brokers, forex brokers are usually tied to large banks or lending institutions because of the large amounts of capital required (leverage they need to provide). Also, forex brokers should be registered with the Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). You can find this and other financial information and statistics about a forex brokerage on its website or on the website of its parent company.
Bottom line: Make sure your broker is backed by a reliable institution!
* Extensive Tools and Research - Forex brokers offer many different trading platforms for their clients - just like brokers in other markets. These trading platforms often feature real-time charts, technical analysis tools, real-time news and data, and even support for trading systems. Before committing to any broker, be sure to request free trials to test different trading platforms. Brokers usually also provide technical and fundamental commentaries, economic calendars and other research.
Bottom line: Find a broker who will give you what you need to succeed!
* Wide Range of Leverage Options - Leverage is necessary in forex because the price deviations (the sources of profit) are merely fractions of a cent. Leverage, expressed as a ratio between total capital available to actual capital, is the amount of money a broker will lend you for trading. For example, a ratio of 100:1 means your broker would lend you $100 for every $1 of actual capital. Many brokerages offer as much as 250:1. Remember, lower leverage means lower risk of a margin call, but also lower bang for your buck (and vice-versa).
Bottom line: If you have limited capital, make sure your broker offers high leverage. If capital is not a problem, any broker with a wide variety of leverage options should do. A variety of options lets you vary the amount of risk you are willing to take. For example, less leverage (and therefore less risk) may be preferable for highly volatile (exotic) currency pairs.
* Account Types - Many brokers offer two or more types of accounts. The smallest account is known as a mini account and requires you to trade with a minimum of, say, $250, offering a high amount of leverage (which you need in order to make money with so little initial capital). The standard account lets you trade at a variety of different leverages, but it requires a minimum initial capital of $2,000. Finally, premium accounts, which often require significant amounts of capital, let you use different amounts of leverage and often offer additional tools and services.
Bottom line: Make sure the broker you choose has the right leverage, tools, and services relative to your amount of capital.
Things To Avoid
* Sniping or Hunting - Sniping and hunting - or prematurely buying or selling near preset points - are shady acts committed by brokers to increase profits. Obviously, no broker admits to committing these acts, but a notion that a broker has practiced sniping or hunting is commonly believed to be true. Unfortunately, the only way to determine which brokers do this and which brokers don't is to talk to fellow traders. There is no blacklist or organization that reports such activity.
Bottom line: Talk to others in person or visit online discussion forums to find out who is an honest broker.
* Strict Margin Rules - When you are trading with borrowed money, your broker has a say in how much risk you take. As such, your broker can buy or sell at its discretion, which can be a bad thing for you. Let's say you have a margin account, and your position takes a dive before rebounding to all-time highs. Well, even if you have enough cash to cover, some brokers will liquidate your position on a margin call at that low. This action on their part can cost you dearly.
Bottom line: Again, talk to others in person or visit online discussion forums to find out who the honest brokers are.
Signing up for a forex account is much the same as getting an equity account. The only major difference is that, for forex accounts, you are required to sign a margin agreement. This agreement states that you are trading with borrowed money, and, as such, the brokerage has the right to interfere with your trades to protect its interests. Once you sign up, simply fund your account, and you'll be ready to trade!
Define a Basic Forex Strategy
Technical analysis and fundamental analysis are the two basic genres of strategy in the forex market - just like in the equity markets. But technical analysis is by far the most common strategy used by individual forex traders. Here is a brief overview of both forms of analysis and how they apply to forex:
Fundamental Analysis
If you think it's difficult to value one company, try valuing a whole country! Fundamental analysis in the forex market is often very complex, and it's usually used only to predict long-term trends; however, some traders do trade short term strictly on news releases. There are many different fundamental indicators of currency values released at many different times. Here are a few:
* Non-farm Payrolls
* Purchasing Managers Index (PMI)
* Consumer Price Index (CPI)
* Retail Sales
* Durable Goods
Now, these reports are not the only fundamental factors to watch. There are also several meetings from which come quotes and commentary that can affect markets just as much as any report. These meetings are often called to discuss interest rates, inflation, and other issues that affect currency valuations. Even changes in wording when addressing certain issues - the Federal Reserve chairman's comments on interest rates, for example - can cause market volatility. Two important meetings to watch are the Federal Open Market Committee and Humphrey Hawkins Hearings.
Simply reading the reports and examining the commentary can help forex fundamental analysts gain a better understanding of long-term market trends and allow short-term traders to profit from extraordinary happenings. If you choose to follow a fundamental strategy, be sure to keep an economic calendar handy at all times so you know when these reports are released. Your broker may also provide real-time access to such information.
Technical Analysis
Like their counterparts in the equity markets, technical analysts of the forex analyze price trends. The only key difference between technical analysis in forex and technical analysis in equities is the time frame: forex markets are open 24 hours a day. As a result, some forms of technical analysis that factor in time must be modified to work with the 24-hour forex market. These are some of the most common forms of technical analysis used in forex:
* The Elliott Waves
* Fibonacci studies
* Parabolic SAR
* Pivot points
Many technical analysts combine technical studies to make more accurate predictions. (The most common is combining the Fibonacci studies with Elliott Waves.) Others create trading systems to repeatedly locate similar buying and selling conditions.
Finding Your Strategy
Most successful traders develop a strategy and perfect it over time. Some people focus on one particular study or calculation, while others use broad spectrum analysis to determine their trades. Most experts suggest trying a combination of both fundamental and technical analysis, with which you can make long-term projections and also determine entry and exit points. But in the end, it is the individual trader who needs to decide what works best for him or her (most often through trial and error).
Things to Remember
* Open a demo account and paper trade until you can make a consistent profit - Many people jump into the forex market and quickly lose a lot of money (because of leverage). It is important to take your time and learn to trade properly before committing capital. The best way to learn is by doing!
* Trade without emotion - Don't keep "mental" stop-loss points if you don't have the ability to execute them on time. Always set your stop-loss and take-profit points to execute automatically, and don't change them unless absolutely necessary. Make your decisions and stick to them!
* The trend is your friend – If you go against the trend, you had better have a good reason. Because the forex market tends to trend more than move sideways, you have a higher chance of success in trading with the trend.
The Bottom Line
The forex market is the largest market in the world, and individuals are becoming increasingly interested in it. But before you begin trading it, be sure your broker meets certain criteria, and take the time to find a trading strategy that works for you. Remember, the best way to learn to trade forex is to open up a demo account and try it out. (Ready to try forex trading without risking your money? Check out our FREE Forex Trading Simulator.)
Here are some useful resources:
Economic calendar: http://mam.econoday.com/index.html
FOREX brokers: http://www.fxstreet.com/nou/brokers/senseframestaula.asp
FOREX forum: http://moneytec.com/
FOREX news: http://forexnews.com/ Forex Feature Click Here
by Justin Kuepper (Contact Author | Biography)
Justin Kuepper has many years of experience in the market as an active trader and a personal retirement accounts manager. He spent a few years independently building and managing financial portals before obtaining his current position with Accelerized New Media, owner of SECFilings.com, ExecutiveDisclosure.com and other popular financial portals. Kuepper continues to write on a freelance basis, covering both finance and technology topics.
There are many forex brokers to choose from, just as in any other market. Here are some things to look for:
* Low Spreads - The spread, calculated in "pips", is the difference between the price at which a currency can be purchased and the price at which it can be sold at any given point in time. Forex brokers don't charge a commission, so this difference is how they make money. In comparing brokers, you will find that the difference in spreads in forex is as great as the difference in commissions in the stock arena.
Bottom line: Lower spreads save you money!
* Quality Institution - Unlike equity brokers, forex brokers are usually tied to large banks or lending institutions because of the large amounts of capital required (leverage they need to provide). Also, forex brokers should be registered with the Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). You can find this and other financial information and statistics about a forex brokerage on its website or on the website of its parent company.
Bottom line: Make sure your broker is backed by a reliable institution!
* Extensive Tools and Research - Forex brokers offer many different trading platforms for their clients - just like brokers in other markets. These trading platforms often feature real-time charts, technical analysis tools, real-time news and data, and even support for trading systems. Before committing to any broker, be sure to request free trials to test different trading platforms. Brokers usually also provide technical and fundamental commentaries, economic calendars and other research.
Bottom line: Find a broker who will give you what you need to succeed!
* Wide Range of Leverage Options - Leverage is necessary in forex because the price deviations (the sources of profit) are merely fractions of a cent. Leverage, expressed as a ratio between total capital available to actual capital, is the amount of money a broker will lend you for trading. For example, a ratio of 100:1 means your broker would lend you $100 for every $1 of actual capital. Many brokerages offer as much as 250:1. Remember, lower leverage means lower risk of a margin call, but also lower bang for your buck (and vice-versa).
Bottom line: If you have limited capital, make sure your broker offers high leverage. If capital is not a problem, any broker with a wide variety of leverage options should do. A variety of options lets you vary the amount of risk you are willing to take. For example, less leverage (and therefore less risk) may be preferable for highly volatile (exotic) currency pairs.
* Account Types - Many brokers offer two or more types of accounts. The smallest account is known as a mini account and requires you to trade with a minimum of, say, $250, offering a high amount of leverage (which you need in order to make money with so little initial capital). The standard account lets you trade at a variety of different leverages, but it requires a minimum initial capital of $2,000. Finally, premium accounts, which often require significant amounts of capital, let you use different amounts of leverage and often offer additional tools and services.
Bottom line: Make sure the broker you choose has the right leverage, tools, and services relative to your amount of capital.
Things To Avoid
* Sniping or Hunting - Sniping and hunting - or prematurely buying or selling near preset points - are shady acts committed by brokers to increase profits. Obviously, no broker admits to committing these acts, but a notion that a broker has practiced sniping or hunting is commonly believed to be true. Unfortunately, the only way to determine which brokers do this and which brokers don't is to talk to fellow traders. There is no blacklist or organization that reports such activity.
Bottom line: Talk to others in person or visit online discussion forums to find out who is an honest broker.
* Strict Margin Rules - When you are trading with borrowed money, your broker has a say in how much risk you take. As such, your broker can buy or sell at its discretion, which can be a bad thing for you. Let's say you have a margin account, and your position takes a dive before rebounding to all-time highs. Well, even if you have enough cash to cover, some brokers will liquidate your position on a margin call at that low. This action on their part can cost you dearly.
Bottom line: Again, talk to others in person or visit online discussion forums to find out who the honest brokers are.
Signing up for a forex account is much the same as getting an equity account. The only major difference is that, for forex accounts, you are required to sign a margin agreement. This agreement states that you are trading with borrowed money, and, as such, the brokerage has the right to interfere with your trades to protect its interests. Once you sign up, simply fund your account, and you'll be ready to trade!
Define a Basic Forex Strategy
Technical analysis and fundamental analysis are the two basic genres of strategy in the forex market - just like in the equity markets. But technical analysis is by far the most common strategy used by individual forex traders. Here is a brief overview of both forms of analysis and how they apply to forex:
Fundamental Analysis
If you think it's difficult to value one company, try valuing a whole country! Fundamental analysis in the forex market is often very complex, and it's usually used only to predict long-term trends; however, some traders do trade short term strictly on news releases. There are many different fundamental indicators of currency values released at many different times. Here are a few:
* Non-farm Payrolls
* Purchasing Managers Index (PMI)
* Consumer Price Index (CPI)
* Retail Sales
* Durable Goods
Now, these reports are not the only fundamental factors to watch. There are also several meetings from which come quotes and commentary that can affect markets just as much as any report. These meetings are often called to discuss interest rates, inflation, and other issues that affect currency valuations. Even changes in wording when addressing certain issues - the Federal Reserve chairman's comments on interest rates, for example - can cause market volatility. Two important meetings to watch are the Federal Open Market Committee and Humphrey Hawkins Hearings.
Simply reading the reports and examining the commentary can help forex fundamental analysts gain a better understanding of long-term market trends and allow short-term traders to profit from extraordinary happenings. If you choose to follow a fundamental strategy, be sure to keep an economic calendar handy at all times so you know when these reports are released. Your broker may also provide real-time access to such information.
Technical Analysis
Like their counterparts in the equity markets, technical analysts of the forex analyze price trends. The only key difference between technical analysis in forex and technical analysis in equities is the time frame: forex markets are open 24 hours a day. As a result, some forms of technical analysis that factor in time must be modified to work with the 24-hour forex market. These are some of the most common forms of technical analysis used in forex:
* The Elliott Waves
* Fibonacci studies
* Parabolic SAR
* Pivot points
Many technical analysts combine technical studies to make more accurate predictions. (The most common is combining the Fibonacci studies with Elliott Waves.) Others create trading systems to repeatedly locate similar buying and selling conditions.
Finding Your Strategy
Most successful traders develop a strategy and perfect it over time. Some people focus on one particular study or calculation, while others use broad spectrum analysis to determine their trades. Most experts suggest trying a combination of both fundamental and technical analysis, with which you can make long-term projections and also determine entry and exit points. But in the end, it is the individual trader who needs to decide what works best for him or her (most often through trial and error).
Things to Remember
* Open a demo account and paper trade until you can make a consistent profit - Many people jump into the forex market and quickly lose a lot of money (because of leverage). It is important to take your time and learn to trade properly before committing capital. The best way to learn is by doing!
* Trade without emotion - Don't keep "mental" stop-loss points if you don't have the ability to execute them on time. Always set your stop-loss and take-profit points to execute automatically, and don't change them unless absolutely necessary. Make your decisions and stick to them!
* The trend is your friend – If you go against the trend, you had better have a good reason. Because the forex market tends to trend more than move sideways, you have a higher chance of success in trading with the trend.
The Bottom Line
The forex market is the largest market in the world, and individuals are becoming increasingly interested in it. But before you begin trading it, be sure your broker meets certain criteria, and take the time to find a trading strategy that works for you. Remember, the best way to learn to trade forex is to open up a demo account and try it out. (Ready to try forex trading without risking your money? Check out our FREE Forex Trading Simulator.)
Here are some useful resources:
Economic calendar: http://mam.econoday.com/index.html
FOREX brokers: http://www.fxstreet.com/nou/brokers/senseframestaula.asp
FOREX forum: http://moneytec.com/
FOREX news: http://forexnews.com/ Forex Feature Click Here
by Justin Kuepper (Contact Author | Biography)
Justin Kuepper has many years of experience in the market as an active trader and a personal retirement accounts manager. He spent a few years independently building and managing financial portals before obtaining his current position with Accelerized New Media, owner of SECFilings.com, ExecutiveDisclosure.com and other popular financial portals. Kuepper continues to write on a freelance basis, covering both finance and technology topics.
Forex Market
Forex Market Overview
Introduction
The following facts and figures relate to the foreign exchange market. Much of the information is drawn from the 2007 Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity conducted by the Bank for International Settlements (BIS) in April 2007. 54 central banks and monetary authorities participated in the survey, collecting information from approximately 1280 market participants.
Excerpt from the BIS:
"The 2007 survey shows an unprecedented rise in activity in traditional foreign exchange markets compared to 2004. Average daily turnover rose to $3.2 trillion in April 2007, an increase of 71% at current exchange rates and 65% at constant exchange rates...Against the background of low levels of financial market volatility and risk aversion, market participants point to a significant expansion in the activity of investor groups including hedge funds, which was partly facilitated by substantial growth in the use of prime brokerage, and retail investors...A marked increase in the levels of technical trading – most notably algorithmic trading – is also likely to have boosted turnover in the spot market...Transactions between reporting dealers and non-reporting financial institutions, such as hedge funds, mutual funds, pension funds and insurance companies, more than doubled between April 2004 and April 2007 and contributed more than half of the increase in aggregate turnover." - BIS
Structure
* Decentralised 'interbank' market
* Main participants: Central Banks, commercial and investment banks, hedge funds, corporations & private speculators
* The free-floating currency system arose from the collapse of the Bretton Woods agreement in 1971
* Online trading began in the mid to late 1990's
Introduction
The following facts and figures relate to the foreign exchange market. Much of the information is drawn from the 2007 Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity conducted by the Bank for International Settlements (BIS) in April 2007. 54 central banks and monetary authorities participated in the survey, collecting information from approximately 1280 market participants.
Excerpt from the BIS:
"The 2007 survey shows an unprecedented rise in activity in traditional foreign exchange markets compared to 2004. Average daily turnover rose to $3.2 trillion in April 2007, an increase of 71% at current exchange rates and 65% at constant exchange rates...Against the background of low levels of financial market volatility and risk aversion, market participants point to a significant expansion in the activity of investor groups including hedge funds, which was partly facilitated by substantial growth in the use of prime brokerage, and retail investors...A marked increase in the levels of technical trading – most notably algorithmic trading – is also likely to have boosted turnover in the spot market...Transactions between reporting dealers and non-reporting financial institutions, such as hedge funds, mutual funds, pension funds and insurance companies, more than doubled between April 2004 and April 2007 and contributed more than half of the increase in aggregate turnover." - BIS
Structure
* Decentralised 'interbank' market
* Main participants: Central Banks, commercial and investment banks, hedge funds, corporations & private speculators
* The free-floating currency system arose from the collapse of the Bretton Woods agreement in 1971
* Online trading began in the mid to late 1990's
Trading forex
Weekly Trading Update - 01-05 November 2010
It hasn't been the greatest of weeks this week. I've come away with a small profit, but nothing to get excited about. My 4 hour trading system (see right for more details) generated two possible set-ups (on the EUR/USD and USD/JPY pairs) but I couldn't get a good entry point on the EUR/USD crossover because there was no pull-back, and I'm reluctant to go short on the USD/JPY pair because I think it's due to bounce back shortly. So there were no trades there.
The Forex Morning Trade system also had a rare off week as well. After two losing trades on Monday and Tuesday, it did however manage to finish the week at break-even after two winning trades today and yesterday, as you can see below. I can't really complain though. It still hasn't had a losing week since More on Weekly Trading Update - 01-05 November 2010
It hasn't been the greatest of weeks this week. I've come away with a small profit, but nothing to get excited about. My 4 hour trading system (see right for more details) generated two possible set-ups (on the EUR/USD and USD/JPY pairs) but I couldn't get a good entry point on the EUR/USD crossover because there was no pull-back, and I'm reluctant to go short on the USD/JPY pair because I think it's due to bounce back shortly. So there were no trades there.
The Forex Morning Trade system also had a rare off week as well. After two losing trades on Monday and Tuesday, it did however manage to finish the week at break-even after two winning trades today and yesterday, as you can see below. I can't really complain though. It still hasn't had a losing week since More on Weekly Trading Update - 01-05 November 2010
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