Interesting two part video on Youtube on forex trading for beginners.
I hope you find them useful and informative :)
I hope you find them useful and informative :)
Part I
Part II
Friday, December 25, 2009
Saturday, December 5, 2009
Forex for Beginners
Foreign Exchange or Forex is a globally trusted market used for the trading or exchange of currencies of different countries. It is the world’s largest financial market.
Tons of people from all walks of life are an active part of Forex or foreign exchange market. With the passage of each year, the Forex market is growing in size and becoming more accessible to the common people. It is the market of 21st century and people from all over the world are relaying on it to achieve their financial goals.
With the advancement in the technology and communication science, Forex has become a huge market but still it has more potential of growth and rise. In the years to come, it may become the trade of choice for many traders. The new generation of traders and investors is seeking exciting opportunities in Forex trade.
Foreign Exchange Education
Forex or foreign exchange trading is a very tricky and risky task. Without having proper training and education, one has very limited chances of success. The most important cause for the failure of Forex traders is their lack of Forex training and knowledge. A quality Forex Education or Training helps the Forex traders to improve their trading abilities and skills. Only a well educated or trained Forex trader understands the complexities and subtleties of Forex trade. Proper Forex training teaches the trader a sound trading strategy and an effective approach to currency trading. A qualified Forex trader can explore the opportunities much easily and extensively.
What should be done before forex market opens ?
A quality Forex training focuses on the market timing effect on trading and liquidity. The time when London market starts its proceedings is the busiest time of the market. The forex market’s startup time has a great effect on Forex market. No education or training system can neglect the importance of analyzing the effect of any Forex market’s opening and closing.
There is no hard and fast rule for Forex education. Success with Forex trading comes with experience, practice and learning new skills. With getting experienced, a trader get more disciplined and controlled in his emotions which is a must trait for Forex trader.
Tons of people from all walks of life are an active part of Forex or foreign exchange market. With the passage of each year, the Forex market is growing in size and becoming more accessible to the common people. It is the market of 21st century and people from all over the world are relaying on it to achieve their financial goals.
With the advancement in the technology and communication science, Forex has become a huge market but still it has more potential of growth and rise. In the years to come, it may become the trade of choice for many traders. The new generation of traders and investors is seeking exciting opportunities in Forex trade.
Foreign Exchange Education
Forex or foreign exchange trading is a very tricky and risky task. Without having proper training and education, one has very limited chances of success. The most important cause for the failure of Forex traders is their lack of Forex training and knowledge. A quality Forex Education or Training helps the Forex traders to improve their trading abilities and skills. Only a well educated or trained Forex trader understands the complexities and subtleties of Forex trade. Proper Forex training teaches the trader a sound trading strategy and an effective approach to currency trading. A qualified Forex trader can explore the opportunities much easily and extensively.
What should be done before forex market opens ?
A quality Forex training focuses on the market timing effect on trading and liquidity. The time when London market starts its proceedings is the busiest time of the market. The forex market’s startup time has a great effect on Forex market. No education or training system can neglect the importance of analyzing the effect of any Forex market’s opening and closing.
There is no hard and fast rule for Forex education. Success with Forex trading comes with experience, practice and learning new skills. With getting experienced, a trader get more disciplined and controlled in his emotions which is a must trait for Forex trader.
Wednesday, November 18, 2009
Forex Scalping Overview
A very informative educational video on scalping on a 10 minute chart.
Very useful for forex beginners. Take some time to watch this video if you want to go into scalping strategies.
Just take note that before investing in any forex trading account, practice with a trial/demo account before going live. Again, I wish to remind all readers that forex is a very volatile market that can make you tons of money and at the same time can clean your account out. It is a risky market and so you have to be able to cope with and manage these risks. And for a risk adverse person, personally I feel that the forex market is not for you.
However, it is a good experience for you to try something new. Just start with a small account if you want.
Sunday, November 1, 2009
FX Basics : Understanding Margin Calls and Contract Size
Margin Calculation
Margin is calculated in 2 ways: Used Margin and Free Margin.
Used margin is the amount of money used to hold open positions whilst free margin refers to the amount of funds available to place additional positions.
Calculating a Margin Call
Fail-safes have been put in place to help prevent a trader from going into the negative and owing their broker additional funds. This is commonly referred to as a Margin Call. In the Forex market, a margin call typically means that their open positions will be automatically closed.
While in other financial markets a client is called upon to send additional funds or the position(s) will be closed at market price.
The margin level is calculated by dividing the current equity in an account by the current amount of margin in use (used margin).
After dividing the equity by the margin move the decimal two places to the right. A trader whose equity is at $1,000 and who is using a $500 of margin would divide 1,000 by 500 which of course equals 2. Then move the decimal two places to the right; this trader's current margin level or percentage is thus 200%. At 100% margin level a trader is essentially using their entire available margin.
When the margin level drops to a certain percentage, trades will automatically be closed.
Understanding Contract Size in the Forex Market
Each standard lot traded in the Forex market is a $100,000 (of the base currency) contract. In other words, when trading one lot in a standard account, a trader is essentially placing a $100,000 trade in the market.
As such, without leverage, most investors would not be able to afford such a transaction. Leverage of 100 – 1 would allow a trader to place the same one lot ($100,000) trade with the post of $1,000 in margin. $100,000 divided by 100 equals $1,000, thus 100 : 1 leverage means that $1,000 of margin is able to control a $100,000 position.
Many retail Forex brokers also offer a mini account option. Mini accounts are essentially 10% the value of standard accounts, meaning that mini contracts are $10,000 (of the base currency). A trade of one mini lot would be a $10,000 trade. Trading with 100:1 leverage would mean that $100 of margin would control a $10,000 contract.
Understanding the basic terminology will help you in your forex trading escapade.
Margin is calculated in 2 ways: Used Margin and Free Margin.
Used margin is the amount of money used to hold open positions whilst free margin refers to the amount of funds available to place additional positions.
Calculating a Margin Call
Fail-safes have been put in place to help prevent a trader from going into the negative and owing their broker additional funds. This is commonly referred to as a Margin Call. In the Forex market, a margin call typically means that their open positions will be automatically closed.
While in other financial markets a client is called upon to send additional funds or the position(s) will be closed at market price.
The margin level is calculated by dividing the current equity in an account by the current amount of margin in use (used margin).
After dividing the equity by the margin move the decimal two places to the right. A trader whose equity is at $1,000 and who is using a $500 of margin would divide 1,000 by 500 which of course equals 2. Then move the decimal two places to the right; this trader's current margin level or percentage is thus 200%. At 100% margin level a trader is essentially using their entire available margin.
When the margin level drops to a certain percentage, trades will automatically be closed.
Understanding Contract Size in the Forex Market
Each standard lot traded in the Forex market is a $100,000 (of the base currency) contract. In other words, when trading one lot in a standard account, a trader is essentially placing a $100,000 trade in the market.
As such, without leverage, most investors would not be able to afford such a transaction. Leverage of 100 – 1 would allow a trader to place the same one lot ($100,000) trade with the post of $1,000 in margin. $100,000 divided by 100 equals $1,000, thus 100 : 1 leverage means that $1,000 of margin is able to control a $100,000 position.
Many retail Forex brokers also offer a mini account option. Mini accounts are essentially 10% the value of standard accounts, meaning that mini contracts are $10,000 (of the base currency). A trade of one mini lot would be a $10,000 trade. Trading with 100:1 leverage would mean that $100 of margin would control a $10,000 contract.
Understanding the basic terminology will help you in your forex trading escapade.
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