Trade Forex

Let’s get exotic!! OK, that could have been a headline on a completely different website, but hear us out — we’re only talking about forex, and if you’re trying to really get a lot of money into your forex portfolio as quickly as possible, you might want to make sure that you get some love for the exotic as well.

We’re only talking about exotic currency pairs, of course. You see, exotic currency pairs aren’t really that hard to understand, but not every forex guide really covers them. If you’re really trying to get as much money as possible out of the forex market, then you owe it to yourself to really understand everything that you can before you trade trading.

If you’re ever unsure how to get started, that’s not the time where you really want to try to jump right into opening a mini account and putting in all of your money. It’s better to make sure that you paper trade for a while before you get the hang of it. As you’re learning all of your currency pairs, you might want to practice with a demo account until you’ve really gotten it down pat. It might seem like you’re wasting time, but you really don’t want to think that way. If you look at it from the right perspective, you’ll find that you can actually improve your forex trading skills because your mistakes won’t cost you the hard way. If you run into problems you’ll be able to get help before it’s too late and you lose your whole shirt.

So let’s get right to it, shall we?

Exotic currency pairs are the ones that have a major currency paired with a minor currency. One example of this would be EUR/TRY — the euro vs. the Turkish lira. Another example would be USD/MXN – the U.S. dollar vs. the Mexican peso. As you might imagine, these are pairs that are a lot more risky than the usual, but for reasons that you may not expect. (more…)

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So you got the basics of forex trading down cold? Good for you. However, we have to inform you that there’s a lot more to forex than the basics. Indeed, you will need to make sure that you have a better idea of what’s going on with the world of forex trading than just the basics because you will come into advanced situations where the extra information will be helpful. You can’t just sit and be comfortable with the basics. When you’re just papertrading and trying to navigate the waters on your own, that’s one thing. However, when you’re trying to tweak your forex game for the most profits possible, it’s time to start branching off into advanced topics.

Not sure where to start? Well, we still have you covered — here are a few subjects that you should look into further.

1. Leverage — No, we’re not talking about the hit TV show or anything like that. When it comes to forex, leverage is an important matter. Leverage is the property that allows us to control a lot of money while still not using a lot of money of your own. You can borrow the rest. Sounds good, right?

Leverage can also go horribly wrong. When combined with margin, things can get kind of scary. Let’s say that you have an account that gives you a margin ratio of basically 100:1. That means that you have about 500,000$ worth of buying power. Seasoned traders know how important buying power really is — they can trade more and also have the potential to make bigger profits. However, there is always a reverse side to the reverse side, and this means that you can also magnify your losses just as much as you can your profits.

A margin call can start the process of losing very easily. This is where the forex broker will tell you that your margin deposit is no longer sufficient to cover your account — this is usually when a position moves against you.

As you can see, just as leverage can be positive and help you get more buying power, it can also be very negative as well.

2. Position Sizing — Want to know how to use leverage? Then you need to make sure that you understand position sizing. It’s simply the correct amount of units to buy or sell of each currency pair that you want to trade. You didn’t think that your pro traders just left it up to chance did you? Of course not.

In order to calculate the best position size, you must have the account equity, the currency pair you want to trade, the percentage of your account that you don’t mind risking, the stop loss (in terms of pips), and the conversion currency pair exchange rates.

Want to see how it all ties together? Here’s an example that you can count on! (more…)

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The most important aspect of anyone getting into Forex is learning how to make predictions.  This can be hard – but you can make it easy on yourself by following a few techniques.

The most important aspect is – don’t dive in too soon!  All too often people get swayed by the opportunity to make big money, and there certainly is that opportunity when trading Forex, and end up trying things that they don’t real understand.

The old adage ‘look before you leap’ applies very much to Forex.  Which is why so many software options allow you to make dummy trades – using fictional money as you slowly get the hang of it, before you dive in with real cash.

This is important because almost all of Forex can be summed up in one word.  Patterns.

Whilst the foreign exchange markets may look random, with currencies going up and down with no discernible rhyme or reason, the fact is that they are far from random.  Whilst any one day may be at the mercy of a few fluctuations that can’t be predicted, the longer term view is more stable.

Almost always Forex markets will follow a predictable pattern, and learning that is how you learnt to make Forex predictions that will make you money far more often than not.

Certain reactions are inevitable.  If you think about it changes in interest rate, large companies announcing profits, GDP announcements, export levels, national debt updates, changes in inward investment etc – all of it plays a large part in deciding the strength of a currency, and all currencies will react to such news in predictable patterns. (more…)

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For many people the idea of working from home is a pipe dream.  Given the massive commutes that people do, the expense of fuel – and child care if needs be – you can see why people would like to be working at home for themselves.

And that skips over the benefits of not having a boss!

With all that in mind it is no surprise that there are all sorts of business models that allow you to set up a business from home.  Recently Forex has become a popular model for being your own boss.  But is it a viable business model?

We take a look at the pros and cons of Forex as a work from home business model

Pros

1    Everything that you need can be accessed from home so long as you have a working computer and an Internet connection.
2    With the speed news sites now broadcast the news you are able to get the same news as the big traders even when at home, so you don’t need to worry about people having ‘the inside track’ on you.
3    With markets open 24 hours a day there is always somewhere you can trade to fit in with your own lifestyle.  This means that you can also choose your own hours.
4   No office politics, no boss etc.
5    If you are good at your job you get paid more, a lot more, as opposed to just getting a pat on the back.

Cons

1    You need to be self motivated, there is no one there to boss you around.
2  The infrastructure you have in place in an office (filing cabinets, people to do your admin etc) are no longer a realistic option (to begin with anyway).
3    You can lose money as well as make it.

Forex IS a viable work from home business – but you have to decide if it’s right for you to set up yourself.

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Anyone who is looking to ‘make it’ in Forex needs a little help getting ahead of the competition, or at least keeping up with them!  There is a huge amount of information that it is possible to be able to take in when it comes to making money form Forex, from spotting patterns to monitoring news stories.

The good news is that you don’t have to be alone – even if you really are working alone.  There are a huge amount of software options that can help you in your quest to make money from Forex.

Types of Software

When it comes down to it the huge amount of software options can be broken down into certain aspects.  Some software will only be one, some will combine aspects of multiple categories – but stick with these and you won;t go too far wrong.

News Monitoring Software

One of the most important aspects of Forex is keeping up with the news.  It is the news that will help you know how the exchange rates are likely to go – so you need to monitor it carefully.  There are a number of free and paid options for this, from expensive software to simple RSS feed and Google alerts.  Whatever you decide on ensure that you are always up to date with the news.

Pattern Recognition

Some of the best Forex bots are able to take news stories from sites and understand how they are likely to effect the market – given you graphs and information to work on to allow you to make informed decisions on investments.

Instant Trading and Dummy Trading.

Many brokers have trading software that allows you to perform instant trades with up to the second information on exchange rates.  They also include dummy trading accounts where you can practice, or come up with news techniques, without risking your savings.

Broker Shadowing

Many Forex bots allow you to simply shadow and experienced broker, copying his investments with your own automatically – thereby allowing you to be able to have an expert invest the money for you (to all intents and purposes anyway).

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When it comes to international trading there are few markets more developed, and more enticing, than the Forex market.  The problem is that so many people simply fail to understand what Forex is and how they can make money out of it.

As with many financial markets and institutions Forex is hidden behind a large amount of jargon, and you need to be able to cut through this to be able to understand it.  Forex, for example, is the amalgamation of two words – FOReign EXchange.

You will see it in action any time that you are changing money from one currency to another.  The whole system relies on pairs trading, and has done for centuries.  In this system any two currencies when paired will have a rate of exchange, and this rate can change up and down due to all sorts of reasons.

This is where the money is made, in the exchange rates.  If you were to change your money to Euros and that became stronger against the Dollar by 2 percentage points over night then when you exchanged your Euros back to Dollars you would have gained 2%.

This might not sound a lot, but with the right investment a percent or two a day can be big money.

The advantage of Forex is that you’re not simply hoping for a return on your investment, you can make pretty accurate predictions based on information.  By reviewing news coming out across news sites you are able to predict how the market will turn based on similar responses in the past.

Access to such information as it comes out marks it above the likes of stock market trading as a place you can invest by using your brain rather than guess work.  In stock market trading there is a lot going on that you don’t know about and others do (even if often that is against the rules).  In Forex though you can get the information via news outlets at the same time most financial institutions will be getting it – so you can play against the ‘big boys’ form your own home and still be on a level playing field.

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