Do No Go into Forex If You Do Not Have Sufficient Knowledge

I met a friend, Alex over the weekends for coffee and check up on each other's life.

Then he told me that he is venturing into forex trading online. And has started out with a demo account with onanda.com.

So I began to ask him about the basics in forex. And to my shock and horror, he does not even have the slightest basic knowledge at all. All he knows is, he was asked by his colleague at work to sign up for an account and try to make it work in forex for passive income.

I told him, that was very risky as this market is risky and highly volatile. He must at least understand all the terminology as well as what makes the market move. he should follow up diligently on fundamental new releases or at least understand how to do technical analysis before doing this headlong.

Otherwise, he may lose more than what he can chew.

Opening a forex account is easy, making use of it and making the right decision in order to make it profitable, is another thing altogether.

So Want to Trade in Foreign Currency ?

New to forex trading ? Or even thinking of making money online ?

Trying to think of ways to make extra income cool and easy ? Came to my site by chance ?

Well, the hard cold facts. Forex / currency trading is not for the faint hearted.

The forex market is a highly volatile and high risk market. To be able to invest and make money wisely from it, means you need to have a very emotionally stable mindset and be mature to handle or cut losses when the market goes against your favour.

You must also be rational when making forex trading decisions.

Whichever currency pairs (EUR/USD etc) you are looking at, do understand the underlying fundamentals and do some technical analysis for both short term and long term trends to at least get an idea of why the currency pair you are observing is going in this particular fashion.

Trading in forex is definitely not child's play and not for the faint hearted or someone who is fickle-minded in your decisions.

Otherwise, you may end up losing more money in forex trading than gaining from it. Though, the down side is the margin call and you lose the amount you invest.

And do read the disclaimers on any expert advisors (that can be used on metatrader platforms) you come across. If you read them carefully, they will say that they cannot guarantee your earnings. So take all their featured earnings with a pinch of salt as there is no way you can verify if what they claim is real or not. The choice is yours. Expert advisors, are after all, a software and may not be able to change their position or direction based on certain situations as they will just follow the rules you set.

What I want to say is, it is best that you fully understand what the forex market is and the risk involved before hastily jumping into it. Do not be enticed by free bonus money when you sign up with any online broker platform.

Enough said, once you are familiar with everything, and is well acustomed to risk, then you can venture into forex trading !

Forex Currency Trading Online - eToro

An interesting video regarding online currency trading from eToro.

You can invest your money online and even get up to $500 free bonus. Of course, you can always try out a demo forex account before you venture into forex. Unless, you are very well versed in the technicalities as well as fundamental news that move the currency market.

Have fun watching !

PS : Do try out a demo trading account first and not go headlong on into an investment account until you are fully aware of how your online broker functions and how you manage your metatrader platforms. Always remember to try out the expert advisors first before you implement it to a real live account !

Great Start to the Week

Hello everyone !

How's your weekend ? Had a good break ?

So now it is the start of a brand new week. Ready for the week's forex challenge ahead ?

Filled with energy and zest to make some awesome money in forex trades ?

Or simply new to forex trading and the use of expert advisors ?

Read my blog, check out all the articles so that you at least know what it entails when jumping into the forex market and do trading :) No time to trade ? Check out expert advisors on MT4 platform :)

Ok, you have fun !

Forex MetaTrader EA Software

MetaTrader EAs or Expert Advisors are programmable trading strategies which operate within the MetaTrader trading platform. Over the recent years they have become increasingly popular, resulting in more traders choosing to use an automated forex system to trade with.

MetaTrader EA's are popular, because if you have a profitable forex strategy or system, and programme that system into an EA or Expert Advisor, then you can have the EA run 24 hours a day on your PC through your MetaTrader broker's trading platform, and you will do not have to monitor your positions on a constant basis. This is very convenient for the busy professional who does not have the time to be online checking and following after the current forex news.

There are literally thousands of different Expert Advisors to choose from. Many are freely available to download from forex forums such as the Forex Factory, whilst some MetaTrader EAs are commercially available for a fee. Be sure to thoroughly backtest a MetaTrader EA if you just download it for free from a website, as you will not know how profitable or robust it is. The same is true for a lot of commercial EAs aswell, so whatever EA you end up with, backtest it extensively before committing live funds to a trading account.

Always test them out on a free demo account. Each EA runs on different strategies ranging from one direction trading, scalping, and other interesting strategies (Martingale etc) which are based on various market interpretation of the current trend.

If you run several Metatrader EA's simultaneously, you might find that your PC is not quick enough to process all of the trades. What most forex traders will do is run their MetaTrader experts via a forex hosting service, such as Forex VPS or Forex Hoster . This gives the trader additional comfort, knowing that he does not need his laptop or PC on in order for the EA to operate, and will suffer from any power outages or internet connection problems....

Regarding MetaTrader Hosting

To be able to trade currency online, you will need a meta trading platform.

MetaTrader is one of the leading forex hosting service providers on the market today.

MetaTrader Hosting supports Metatrader on all major operating systems, including Linux, Mac and Windows, unlike some hosting companies which only provide support to Window clients. It will also give you real time support, should you encounter any problems on the server side.

MetaTrader Hosting has robust security arrangements at its facility, and provides a secure and remote access to your MetaTrader broker account.

Hosting your Forex VPS with MetaTrader Hosting gives you real time access to your individual trading account. It enables you the ability to view, manage and trade in real time through your broker. It is also possible to host several MetaTrader Expert Advisors without having to worry about your laptop crashing, power outages, or a failed internet connection.

As an additional benefit, MetaTrader Hosting will not only allow you to monitor your trade on your PC, laptop, Mac or Linux operating system, but you can also monitor your trading account remotely, and on the move with your iPhone.

MetaTrader Hosting was originally created for simple and easy management of your MT4 Expert Advisors and custom indicators and scripts, and has grown to become one of the most popular and robust trading platforms on the market. And with MetaTrader Hosting, it takes less time to install an Expert Advisor on MetaTrader, than it is when MT is running on your own desktop.

Extracted from Google search.

How Does Forex Trading Work ?

A video from Youtube giving a brief introduction of forex trading and how it works. And the market value and why it is so popular with so much currency between transacted everyday.

Also, featured is its brief on the use of expert advisors and auto forex trading robot. A simple comparison overview of auto vs manual forex trading. Watch it if you like ! Another video on a forex trading seminar is also embedded in this post :)

A Forex Trading Seminar video

Short Term Currency Trends

Most of the time, markets don't show any visible clear trend - they bounce back and forth between support and resistance levels. This sideways movement is called a trading range.

Below is a strategy that may help you in identifying entry points on short-term trends, whilst protecting your profits with trailing stops.

Trade Set-up

The strategy uses two charts with different time periods (10-minute and hourly), along with two technical indicators: a 200-bar moving average and a 14-bar slow stochastic study.

1st Step : Identify a Trend

Compare the moving averages on both charts. A trend may be developing when price is consistently above or below the moving averages on both charts.

2nd Step : Pinpoint entry

Once you've identified a trend, look for the following two conditions at the same time on the 10-minute chart:

1. Price is no more than 20 pips above (to buy) or 20 pips below (to sell) the MA.

2. The "fast" stochastic (%K) crosses above the "slow" stochastic (%D) below 20 (to buy), or crosses below the "slow" stochastic above 80 (to sell).

3rd Step : Ride the trend

Set a trailing stop after the trade entry.

On a LONG position, the stop order should be 10 pips BELOW the 200-period MA on the 10-minute chart. You'll RAISE the stop as the trade goes in your favor.

On a SHORT position, place the stop 10 pips ABOVE the MA. You'll LOWER the stop as the trade goes in your favor.

I hope this helps ! Test this out on a demo platform like eToro or ibfx practice accounts before you go live !

Choice of Forex Trading Currency Broker

There is a very wide choice of currency broker companies online and when you are starting out in forex trading it can be difficult to find the best. We tend to be attracted by advertising, assuming they are all working in the same way. In fact this is not true. Foreign exchange brokers have very different business models which affect the way that they operate. In some cases, you may be surprised to hear that they could be working against their clients instead of for them.

Of course traditionally a broker carries out his clients' instructions, placing orders for them in the market. Originally brokers worked with telephone orders and simply placed the order for the best price that they could get through their dealing desk. These days, everything is done online so that clients put in their orders for a certain price. However, you do still need a broker who will connect to the market through their software platform.

Many brokers still work in the old way, placing orders for clients as they are instructed. These are often the brokers who run standard forex accounts with minimum investment of $10,000 and upward. But the internet has opened up forex trading to people with much lower investment funds. More recently, companies have come on the scene to cater for these smaller investors and they do not necessarily follow the pattern of traditional brokers. To cut costs, they usually do not have their own dealing desks and they may operate in some very different ways. This can have important consequences for your funds and how they are managed.

So let's take a look at the types of business model that you may come across in your search for a currency broker.

No Dealing Desk (NDD) Currency Brokers

NDD brokers work in a similar way to brokers with dealing desks, but they use a range of liquidity providers to actually match their clients' orders in the market. Competition between liquidity providers keeps the spread low, even though the broker usually increases the spread to cover their own costs and make some money.

Market Makers

Market makers are not brokers in the true sense because instead of placing your order in the market they will match it themselves and then cover themselves against any loss by taking a position in the ECN or market that offsets their commitment to you either partially or fully. Market makers set their own prices, although of course these will be related to market prices. They often do not like clients to use scalping strategies because the very short term nature of these trades makes it hard for them to offset their risk. Some traders are happy to use market makers but others consider that they have a conflict of interest which may work against you as a trader.

Electronic Communications Network (ECN)

Forex brokers who use the ECN can access an online network where trades are filled. Many market makers work this way, as well as some brokers, banks and other large currency traders. Spread is usually low but you may be charged a fee per trade.

Bucket Shops

Forex bucket shops are like bet takers in that they simply match your trade without necessarily taking any position in the market. They may not even have any connection into the real currency market. They win if you lose, so if you are successful they will probably close your account and return your funds. There is really no point in getting involved with a bucket shop unless you just want experience at very low levels of investment, and plan to lose money. They are illegal in some jurisdictions, and do not deserve to be described as a currency broker.