Monday, August 27, 2007
WHAT IS FOREX ?
FOREX is the largest inter bank financial institution in the world that opens its doors to retail investors. FOREX was established in 1971 following the end of the Bretton Wood system of foreign exchange control and soon thereafter, the materialization of floating exchange rates. FOREX is the only financial market that operates on a 24-hour basis on Asian, European and American markets by virtue of their association in one global communication network. 24-hour access to the foreign exchange market allows investors to open and close positions at the most whenever they choose for the best possible advantage, and for the best deal.Increasingly, individuals are affording themselves every opportunity to achieve financial gains. Currency, because of its minute by minute fluctuations in value is traded on the foreign exchange market. Banks and brokers grant investors an opportunity to participate in currency exchange operations, the returns of which regularly exceed the amounts invested. Investors may partake of this market with as little as $1000.FOREX trades over one trillion dollars daily and makes currency purchase-sale contracts on terms from 1 day to one year in this round-the-clock, very liquid market. The largest foreign exchange activity occurs on the spot exchange between the US dollar and four other major currencies: the British Pound, the Japanese Yen, the Eurodollar and the Swiss Franc. These four currencies are bought and sold against the US dollar. The participants of the market are banks, brokers’ offices, corporations, export-import companies, various Fund providers, and individual investors.Trading on the foreign exchange market is the single most effective source of income for banks worldwide. For instance, 80% of the revenues of the largest Swiss bank, “Union Bank of Switzerland” (UBS), were derived from convertible operations with currency, wherein only 20% of revenue profited from credits, securities selling, etc. (see financial report in “UBS Annual Report of 1994). Profit from foreign exchange operations are in much favor at banks such as Citibank, Chase Manhattan Bank, Barclays Bank, Sosiete Generale Bank & Trust, ABN-AMRO Bank.A well known example of such transactions involves George Soros, who in 1992 realized a net profit of one million dollars within 2 weeks selling the British Pound (GBP) against the German Mark (DM) and the American Dollar (USD).In order for banks to survive in highly competitive circumstances among bank operations, currency trading will be forcibly included into essential basis of bank operations by laws of market economy development.Margin TradingIn order to attract investors to the FOREX market who wish to risk less than one million dollars at any given time (a standard lot for trading on the exchange market), it employs what is referred to as a margin trade."“Margin trading” was created for purposes of potentially advantageous trades of currency in 1985. This process, simply stated, involves a cash deposit, usually much smaller than the underlying value of the currency or commodity contract, is required in order to affect the trade.The primary distinction between the FOREX trading system from other financial markets, is that foreign currency purchase-sale operations can be made without having a set required sum to perform trading operations. In order to conduct a purchase, a client needs to invest only a small start up amount, which is referred to as a “margin”. This gives him an opportunity to make deals in volumes that are 50-100 times greater the start up amount. This so-called “shoulder” or leverage, is granted by a bank or other credit institution, where the client deposits a guaranteed margin. For example, simply depositing a guaranteed amount of $100,000 in a bank or broker company, enables an individual to make financial operations in amounts of 5 to 10’s of millions of dollars. Therefore, even a modest gain on the FOREX market (relative to the input amount) is considered to be of significant size. Another advantage of FOREX is profit derived from any direction of price changing, regardless of the particular currency involved.For a better understanding here is an example:Let’s say, you have $2000 on your account. That means that with a credit “shoulder” 100:1, you are able to open a position in amount of $200,000. Dollar exchange rate against Swiss Frank was 1.4045 – 1.4050 at 11 AM. You think that this rate is not high enough and should rise. You place an order to buy $100,000 at the current rate. At 3 PM the exchange rate for same currencies is 1.4250 – 1.4255. Should you then decide to sell your $100,000 at the new, higher rate, your profit would be 2,000 Swiss Franks or $1,400, which is 140% of the input amount. After closing the position, money would then transfer into your account. You can determine the result of the transaction in the “Account History” of your Trade Terminal. The software allows you to handle all operations on the Internet, which give you currency correlation rates in ‘real time’ or exactly when they occur.Exchange Rate DevelopmentThere are 3 major groups of factors that influence on exchange rate development:Fundamental FactorsTechnical FactorsShort-term unexpected factorsFundamental trading strategies consist of macro-economic strategic assessments; these criteria often include the economic condition of the currency’s country of origin, the country’s monetary policy, and other "fundamental" elements.Typically, on the world markets, the US economy has the greatest influence. Fully 80% of financial operations conducted in world markets are transacted in dollars. This causes the dollar rise or fall against all other currencies. The fundamental factors affecting world markets are:exchange rate at parity of purchasing capacityGross national productThe level of real percentageThe level of unemploymentInflationAn index of industrial productionTherefore, the common rule for a trader is to orient to the expectations and moods of the majority of investors in the market. Exchange rate movement tendency can be analyzed by reading publications, studying reviews of market situation in information systems such as Reuters, Bridge (Dow Jones), and CQG. Following the publication of the leading economic indicators, the market will inevitably begin to move. A trader’s primary task is to participate in such movement, which invariably will be lead by the majority in the market. The axiom is - “don’t miss the boat”Technical analysis is a field of market analysis, which supposes that market has a memory and consists primarily of a variety of technical aspects, each of which can be interpreted to generate buy and sell signals or to predict market direction. During the past few years, in response to rapid growth of electronic analytical devices such as those offered by Reuters, Bridge (Dow Jones), CQG and others, greater numbers of traders make their decisions according to the technical analysis, which regularly increases its influence on any real rate movement.Technical analysis is a method for price forecasting based on historical market movement studies. For the last 30 years, studies in the field of technical analysis have proven themselves a science with its own philosophical system and set of operative axioms.Aside from the fundamental and technical factors, the influence of which can in fact be predicted, there are several short-term unexpected factors that can bring in essential amendments to the dynamic movements of the currency rate.This article from site http://www.your-forex.blogspot.com/
Frequently Asked Questions
How do I begin? Please give it to me SIMPLY.
1. The best advice on how to learn to trade profitably is to learn from experts with proven track records. Many learning styles are available to beginners at all levels: books, CDs, online courses, group seminars, even one-on-one mentors who will come right your home for a few days. We outline our Forex-Trader picks in Learning Forex Trading. Learning to trade from experts is worth every penny and has saved us untold thousands in mistakes. We would not recommend starting forex trading without any training. It is not hard to learn, nor difficult to trade successfully, but you must first provide yourself with a basic functioning knowledge of 'the game you're in'. 2. While you are learning you will need charting software to practice reading the Market. Charting is an indispensable tool that shows you in real-time data what the market is doing moment by moment and also what the market has done in the past. As you learn to analyze these charts you can determine what trades to enter and exit, where to set your stop losses, limits etc. There are several good charting software services that you can subscribe to online monthly. See our Forex-Trader tested Charting Software picks in Tools of The Trade.3. Then, to perform your actual trades online you need a real-time 'trading platform' to execute your 'buys' and 'sells' directly in the Foreign Currency Market. You obtain a trading platform from a Forex Clearinghouse that is connected real-time to the interbank market. There are many good Clearinghouses (also confusingly called Brokerage Firms, Market Makers, etc.) that provide you with the trading platform to trade the funds in the account you have opened with them. Before you begin trading your 'real' money, while you are learning, you will practice on your own 'demo account' with play-money in it, which will be provided to you by the clearinghouse you plan to trade through. The contractual relationship you enter into with your Clearinghouse is a very important one because the Clearinghouse you choose determines many trading features and financial advantages to you both as a trader and as an investor. Forex-Trader tested Clearinghouses are reviewed in Tools of The Trade.We have outlined a Getting Started path with uncomplicated steps. This is the path that we would take if we were beginning trading over again today with 'what we know now'. The products and services we mention in these steps are all ones that we have personally used for some time with consistent success. As always you are free to forge your own path, and if you do, happy hiking. There is a mountain of products and services try out, and if you find ones you like better we would love to compare notes with you.Explain More About Charting ServicesTo trade successfully you also must have good charting software and instantaneous data feeds critical to helping you analysis and interpret the movement of currencies moment to moment so you know when/why to buy or sell -- this you subscribe to monthly. You can get a 2 week or more demo to familiarize yourself with one that has the features you like. The costs also vary, and some companies require a year commitment. There are some free charting services offered through the clearinghouses, but they tend to lack the tools to be truly useful. There are also some costly proprietary Specialty Software charting 'hybrids' which are market forecasters tools that look more like video games than charts.Explain More About How Clearinghouses WorkA good clearinghouse (i.e.. your computer access/link to the live Forex Exchange Market) is the partner with which you trade the money you have deposited with them in your trading account. After trying and demo-ing many we have found a small handful that are truly excellent for the beginner (and continue to be excellent as you grow) -- meaning user friendly, legally accountable to regulatory bodies, and offering fair costs (spreads) for their services/trading software platforms. There still are many worrisome ones practicing in this closing era of unregulated forex trading (new Commodities laws are imminent).The topic of matching the right clearinghouse for your needs is discussed more in Tools of the Trade, because it depends on a number of factors -- how much you can open an account with, how much the clearinghouse profit spread, what your liquidity needs are, your minimum/maximum stop loss and margin requirements, even where you live and how much time you have to give to trading in a 24 hr. day.How Much Does it Cost to Begin to Trade?Learning to trade will entail the cost of books and whatever training method you choose. It will also include a reliable computer with a minimum 128 Mb of memory to run the charting software and trading platform. Ongoing 'costs of operation' include the monthly costs of high-speed internet, charting software, the email forecasting subscriptions -- plan on spending $150./mo. up for ongoing costs.What about Pooled Clearinghouse Accounts to Trade with More Leverage?We strongly do not recommend pooled accounts in any circumstance. Perhaps you are considering self-trading a pooled- together family account because it would give you a perceived advantage of more leveraged funds to trade (50:1 up to 100:1 leverage) -- any risks of loss represent a potential risk to family relationships, and for this reason alone we do not
recommend aggregating with family or friends. However much worse are the too-numerous negative experiences of people allowing their investment funds to leave their control to become part of a 'managed' pooled account. Not only is it a very risky investment idea, it is illegal for anyone to 'pool' accounts without compliance with SEC (a USA Securities Exchange Commission) or international equivalent license. Never relinquish direct control over your money/trading account to anyone (i.e.. the ability to make withdrawals, deposits etc. directly by your own authority into your own account).A good fund manager, if you do choose to go the (legitimate) Managed Account route rather than the Self-Trader route, will make certain you have your own 'segregated account' in your own name in a bank or brokerage firm. These individual segregated accounts can still be traded together as though they were in a single account by a designated trader as long as the clearing house uses a trading platform that allows it. You, as the investor/account holder, have direct access online to your account activity at all times, and direct control over your own account in your own name (just like a bank account). The importance of this, for the safety of your funds, cannot be over emphasized.Questions From Our Email Inbox Thank you for inviting people to learn from your experience. I found that to be very generous. I was hoping you may be able to shed little light on just how to go about finding the right currency pairs to buy.This is where charting software will make it self-evident for you to know what pairs are 'trending'. Technical analysis using charting software: Elliott Wave, Retracements, Fibonacci patterns, short term trending, etc. Good charting software is invaluable! Look at it as one of your 'costs of doing business'.I have just begun learning how the FOREX works. There are so few opportunities for the lower economic class to achieve financial independence.It took us a full year to learn to trade forex to achieve consistent profits, but well worth the time and effort. Forex trading can be the great leveler of the self-investor playing field. I and we believe that with dedication to sound, risk-management trading methods you can succeed.I'm trying to build a financial base, but I just can't find a door in. Is it possible for me to participate directly in the FOREX with smaller amounts - like $1000?Beginning with $1K. is more of a challenge and more of a risk (but not impossible). $1K represents 1 lot in Forex Trading, and that is the minimum (leveraged) trade that can be made. Perhaps that $1K would be better spent on trading education?I have participated in Forex 'Games' and other types of online investments that claim to be investing in Foreign Currency (among other things), with returns of 50% a month and more. I actually did get paid. Opinions please?We strongly urge you to resist any further temptation to send your money away to an investment-type pool (by this we mean do not send your money away to be under someone else's control and in someone else's account). It is unjustified risk, there are much better ways to begin to experience profits from forex trading. Many such online investments have totally disappeared into the Internet ethers from which they came. Typically these investments give no contact information, claiming to be 'offshore', 'for privacy reasons'. They last a few months, their bulletin boards or email newsletters extoll their climbing numbers of 'members' and pay-outs, then without warning their site goes off-line forever. And you never knew who they were that disappeared with your trust and your money or e-gold.How do you forecast which currency is next in line to increase?It is not so much that you want to know when any one currency is going up. You can make profits whether a currency is going up (buy), or down (sell). All Currencies are continually rising and falling relative to other currencies, and forex trading is in fact trading one currency relative to another. Good trading opportunities are always present when you know how to recognize them. Technical analysis using charting software, market sentiment, experience will show you which currencies to pair to trade. Forex Trading is a skill of identifying (and acting on) the probabilities.How do you choose when to rollover or close positions?Technical analysis using charting software that (when you learn how to identify what you are seeing) depicts resistance levels (how high it will likely rise to) or support levels (how low it will likely stop dropping at). This is helpful for determining whether to rollover the trade for a bigger forecasted profit the next day. However, a rollover does have additional clearinghouse fees attached. Quick in-and-out trades are closed intentionally with the goal of a smaller profit gain (such as a 4 pip profit).For example, Beginners, who are learning to read their charts, can do very well closing positions at whatever point they have gained +4 pips profit. This represents a $40. profit (in this example we are trading 1 lot Euro/USD, so 1 pip equals $10.). A $40./4 pip gain is a relatively small move on the chart and may not seem impressive until you consider that If you do this successfully 4 times a day you have made $160. profit. With 4 such daily trades in a four day trading week you will have made $640. (consider also that this is even without the magic of compounding). We leave the monthly and yearly calculations to you.What indicators do you utilize? We have tried everything we could ever get our hands on. Over time we have selected the ones that are most consistent and well suited to our trading style. See our review of different indicator tools in Tools of the Trade. You will develop your own trading style (best times of day, favorite currency pairs, best instinctual moving-average chart pattern etc.). But experience with basic technical analysis using charting software is always the starting point. Then you add forex forecasting email subscriptions, Allan Greenspan's body language (no kidding) etc.Are there any real time & reliable direct (commission free) market maker entry sites online?Yes. It is not necessary to pay a clearinghouse (also known as a market maker, or forex brokerage house) an additional 'commission' for self-trading using their platform/services. They are usually compensated in the 'spread' between the buy price and sell price.Tools of The Trade - Preparing to TradeThis is a collection of Forex "Tools of the Trade" -- products and services that we have found to be the best of all we have tried over many years, and additionally selected because the companies behind them have demonstrated reliable service, integrity and value. They are beginner-friendly, yet offering a growing trader lots of support. Look for the Forex-Trader discounts.To trade Forex successfully you will need the basics:1. A reliable, reasonably fast computer, preferably with high speed access to the internet (DSL or Cable Modem for example). An Internet dial-up account or the telephone becomes your back-up should your primary access fail.2. Good foreign currencies "charting software" with a reliable, accurate data feed so that you can track currency movements in real time and perform the technical analysis necessary to trade effectively.3. An on-line Forex trading account with a brokerage firm which provides a reliable Trading Platform, fair "spreads", quick execution of trades, good on-line reporting, and excellent customer service.4. A subscription to at least one Forex Trading "Advisory Service" which provides market overviews at least daily. This gives you the context and overall directions of the market and will greatly assist in your own analysis and decision making.Most importantly, you will need effective training and/or mentoring to master the techniques and discipline which 90 percent of beginning traders lack. This can be home study via cd's or on-line lessons, classes you travel to, or trainer/mentors who come to you.1. COMPUTER HARDWARE: Specially Configured for Trading.MicronPCThere are many good choices for computer hardware. Over the last 6 years we have come to rely on consumer-poll-leader MicronPC to provide reliable hardware and great customer support. Their technical support is available 7 days a week and 24 hours per day and it is actually quick and friendly. We have made a special arrangement with MicronPC to provide substantial discounts to Forex-Trader referrals. Click the link below to see four configurations with detailed information and directions on how to order and receive a discount averaging hundreds of dollars off the price you would pay if you went directly to the Micron website and configured the same machine.TelekineticsComputer Trading Hardware For the Consummate Trader.This is the Quintessence of Trading Computers.TriKinetic is the only computer manufacturer dedicated exclusively to building trading computer solutions backed by lifetime technical support for the serious trader for whom downtime is not an option. With over 5 years experience and key relationships with the trading industry players, TriKinetic is a leader in complete 'Plug-n-Trade' (turnkey) trade stations.2. FOREX CHARTING SOFTWAREE-SignalThis charting software by Townshend Analytics professional charting software, works with a variety of data sources such as Comstock by Standard and Poors, Infotek etc. We use Comstock data for its Realtick is available by the month, a nice startup cost feature for beginners.3. TRADING PLATFORMS Clearinghouses Providing On-line Access to the Forex Trading Market.FXCM - Forex Capital Markets LLC A few the many reasons that we have been with FXCM the longest (and happiest) of the many Trading Clearinghouses we've tried -- they are commission-free and offer individual client accounts which are viewable online, their trading platform has the most efficient execution, with trader-friendly spreads and policies for both beginners and advanced traders with either large or small accounts. With an eye to coming regulations they voluntarily registered with U.S. regulatory agencies to demonstrate client assurance of safety through compliance with Securities rules.A Word of Experience:FXCM Charting software is free with a demo or live account, although useful it is not as complete as professional charting software. Also, their 'Mini-Account' might seem like a good start for a cautious beginner, however we have experienced much safer and more profitable trading results by learning to trade on their free demo account then, when ready, going 'live' with a 'full-size' trading account.4. TRADING ADVISORY SERVICESTrading Advisors are the esteemed 'Forecasters' of the Forex Trading Industry, experts who predict upcoming market moves based on experience, technical analysis and a host of other indicators.Forex Advisor - Live Trading AdvisoryThis advisory service is one we are enjoying more everyday, naturally first because of its value and consistently profitable returns month after month with truly excellent risk management protocols. But also because this system is the ultimate in 'live coached trading'. This advisory teaches you risk-safe, consistently successful, profitable trading strategies -- one live session at a time.A professional trader does all the analysis and posts charts and how-tos online on a leading edge proprietary Live Trading Platform while calling real-time trades with specific entry, exits and stop loss points.Max's Forex Trader AdvisoryThis twice-daily Trading Research email advisory service heralds the opening the European Trading Market and later in the day the opening of the Asian Trading Market with market analysis, related insights, movements to watch for, and trading suggestions. Written by Max, the esteemed forex trader from New Zealand, whose passion for, and intimate knowledge of the foreign currency exchange is a good marriage.SPECIALIZED TRADING ANALYSIS SOFTWARENostradamusAn intriguing 'Wheel of Fortune' compass design displays and forecasts the trends, reversals, etc. of the forex market via sophisticated algorithms. It gives clear buy and sell signals, and continuously displays its trading profit history related to its predications. Subscribe to it monthly per currency pair, or subscribe to all currencies.
How do I begin? Please give it to me SIMPLY.
1. The best advice on how to learn to trade profitably is to learn from experts with proven track records. Many learning styles are available to beginners at all levels: books, CDs, online courses, group seminars, even one-on-one mentors who will come right your home for a few days. We outline our Forex-Trader picks in Learning Forex Trading. Learning to trade from experts is worth every penny and has saved us untold thousands in mistakes. We would not recommend starting forex trading without any training. It is not hard to learn, nor difficult to trade successfully, but you must first provide yourself with a basic functioning knowledge of 'the game you're in'. 2. While you are learning you will need charting software to practice reading the Market. Charting is an indispensable tool that shows you in real-time data what the market is doing moment by moment and also what the market has done in the past. As you learn to analyze these charts you can determine what trades to enter and exit, where to set your stop losses, limits etc. There are several good charting software services that you can subscribe to online monthly. See our Forex-Trader tested Charting Software picks in Tools of The Trade.3. Then, to perform your actual trades online you need a real-time 'trading platform' to execute your 'buys' and 'sells' directly in the Foreign Currency Market. You obtain a trading platform from a Forex Clearinghouse that is connected real-time to the interbank market. There are many good Clearinghouses (also confusingly called Brokerage Firms, Market Makers, etc.) that provide you with the trading platform to trade the funds in the account you have opened with them. Before you begin trading your 'real' money, while you are learning, you will practice on your own 'demo account' with play-money in it, which will be provided to you by the clearinghouse you plan to trade through. The contractual relationship you enter into with your Clearinghouse is a very important one because the Clearinghouse you choose determines many trading features and financial advantages to you both as a trader and as an investor. Forex-Trader tested Clearinghouses are reviewed in Tools of The Trade.We have outlined a Getting Started path with uncomplicated steps. This is the path that we would take if we were beginning trading over again today with 'what we know now'. The products and services we mention in these steps are all ones that we have personally used for some time with consistent success. As always you are free to forge your own path, and if you do, happy hiking. There is a mountain of products and services try out, and if you find ones you like better we would love to compare notes with you.Explain More About Charting ServicesTo trade successfully you also must have good charting software and instantaneous data feeds critical to helping you analysis and interpret the movement of currencies moment to moment so you know when/why to buy or sell -- this you subscribe to monthly. You can get a 2 week or more demo to familiarize yourself with one that has the features you like. The costs also vary, and some companies require a year commitment. There are some free charting services offered through the clearinghouses, but they tend to lack the tools to be truly useful. There are also some costly proprietary Specialty Software charting 'hybrids' which are market forecasters tools that look more like video games than charts.Explain More About How Clearinghouses WorkA good clearinghouse (i.e.. your computer access/link to the live Forex Exchange Market) is the partner with which you trade the money you have deposited with them in your trading account. After trying and demo-ing many we have found a small handful that are truly excellent for the beginner (and continue to be excellent as you grow) -- meaning user friendly, legally accountable to regulatory bodies, and offering fair costs (spreads) for their services/trading software platforms. There still are many worrisome ones practicing in this closing era of unregulated forex trading (new Commodities laws are imminent).The topic of matching the right clearinghouse for your needs is discussed more in Tools of the Trade, because it depends on a number of factors -- how much you can open an account with, how much the clearinghouse profit spread, what your liquidity needs are, your minimum/maximum stop loss and margin requirements, even where you live and how much time you have to give to trading in a 24 hr. day.How Much Does it Cost to Begin to Trade?Learning to trade will entail the cost of books and whatever training method you choose. It will also include a reliable computer with a minimum 128 Mb of memory to run the charting software and trading platform. Ongoing 'costs of operation' include the monthly costs of high-speed internet, charting software, the email forecasting subscriptions -- plan on spending $150./mo. up for ongoing costs.What about Pooled Clearinghouse Accounts to Trade with More Leverage?We strongly do not recommend pooled accounts in any circumstance. Perhaps you are considering self-trading a pooled- together family account because it would give you a perceived advantage of more leveraged funds to trade (50:1 up to 100:1 leverage) -- any risks of loss represent a potential risk to family relationships, and for this reason alone we do not
recommend aggregating with family or friends. However much worse are the too-numerous negative experiences of people allowing their investment funds to leave their control to become part of a 'managed' pooled account. Not only is it a very risky investment idea, it is illegal for anyone to 'pool' accounts without compliance with SEC (a USA Securities Exchange Commission) or international equivalent license. Never relinquish direct control over your money/trading account to anyone (i.e.. the ability to make withdrawals, deposits etc. directly by your own authority into your own account).A good fund manager, if you do choose to go the (legitimate) Managed Account route rather than the Self-Trader route, will make certain you have your own 'segregated account' in your own name in a bank or brokerage firm. These individual segregated accounts can still be traded together as though they were in a single account by a designated trader as long as the clearing house uses a trading platform that allows it. You, as the investor/account holder, have direct access online to your account activity at all times, and direct control over your own account in your own name (just like a bank account). The importance of this, for the safety of your funds, cannot be over emphasized.Questions From Our Email Inbox Thank you for inviting people to learn from your experience. I found that to be very generous. I was hoping you may be able to shed little light on just how to go about finding the right currency pairs to buy.This is where charting software will make it self-evident for you to know what pairs are 'trending'. Technical analysis using charting software: Elliott Wave, Retracements, Fibonacci patterns, short term trending, etc. Good charting software is invaluable! Look at it as one of your 'costs of doing business'.I have just begun learning how the FOREX works. There are so few opportunities for the lower economic class to achieve financial independence.It took us a full year to learn to trade forex to achieve consistent profits, but well worth the time and effort. Forex trading can be the great leveler of the self-investor playing field. I and we believe that with dedication to sound, risk-management trading methods you can succeed.I'm trying to build a financial base, but I just can't find a door in. Is it possible for me to participate directly in the FOREX with smaller amounts - like $1000?Beginning with $1K. is more of a challenge and more of a risk (but not impossible). $1K represents 1 lot in Forex Trading, and that is the minimum (leveraged) trade that can be made. Perhaps that $1K would be better spent on trading education?I have participated in Forex 'Games' and other types of online investments that claim to be investing in Foreign Currency (among other things), with returns of 50% a month and more. I actually did get paid. Opinions please?We strongly urge you to resist any further temptation to send your money away to an investment-type pool (by this we mean do not send your money away to be under someone else's control and in someone else's account). It is unjustified risk, there are much better ways to begin to experience profits from forex trading. Many such online investments have totally disappeared into the Internet ethers from which they came. Typically these investments give no contact information, claiming to be 'offshore', 'for privacy reasons'. They last a few months, their bulletin boards or email newsletters extoll their climbing numbers of 'members' and pay-outs, then without warning their site goes off-line forever. And you never knew who they were that disappeared with your trust and your money or e-gold.How do you forecast which currency is next in line to increase?It is not so much that you want to know when any one currency is going up. You can make profits whether a currency is going up (buy), or down (sell). All Currencies are continually rising and falling relative to other currencies, and forex trading is in fact trading one currency relative to another. Good trading opportunities are always present when you know how to recognize them. Technical analysis using charting software, market sentiment, experience will show you which currencies to pair to trade. Forex Trading is a skill of identifying (and acting on) the probabilities.How do you choose when to rollover or close positions?Technical analysis using charting software that (when you learn how to identify what you are seeing) depicts resistance levels (how high it will likely rise to) or support levels (how low it will likely stop dropping at). This is helpful for determining whether to rollover the trade for a bigger forecasted profit the next day. However, a rollover does have additional clearinghouse fees attached. Quick in-and-out trades are closed intentionally with the goal of a smaller profit gain (such as a 4 pip profit).For example, Beginners, who are learning to read their charts, can do very well closing positions at whatever point they have gained +4 pips profit. This represents a $40. profit (in this example we are trading 1 lot Euro/USD, so 1 pip equals $10.). A $40./4 pip gain is a relatively small move on the chart and may not seem impressive until you consider that If you do this successfully 4 times a day you have made $160. profit. With 4 such daily trades in a four day trading week you will have made $640. (consider also that this is even without the magic of compounding). We leave the monthly and yearly calculations to you.What indicators do you utilize? We have tried everything we could ever get our hands on. Over time we have selected the ones that are most consistent and well suited to our trading style. See our review of different indicator tools in Tools of the Trade. You will develop your own trading style (best times of day, favorite currency pairs, best instinctual moving-average chart pattern etc.). But experience with basic technical analysis using charting software is always the starting point. Then you add forex forecasting email subscriptions, Allan Greenspan's body language (no kidding) etc.Are there any real time & reliable direct (commission free) market maker entry sites online?Yes. It is not necessary to pay a clearinghouse (also known as a market maker, or forex brokerage house) an additional 'commission' for self-trading using their platform/services. They are usually compensated in the 'spread' between the buy price and sell price.Tools of The Trade - Preparing to TradeThis is a collection of Forex "Tools of the Trade" -- products and services that we have found to be the best of all we have tried over many years, and additionally selected because the companies behind them have demonstrated reliable service, integrity and value. They are beginner-friendly, yet offering a growing trader lots of support. Look for the Forex-Trader discounts.To trade Forex successfully you will need the basics:1. A reliable, reasonably fast computer, preferably with high speed access to the internet (DSL or Cable Modem for example). An Internet dial-up account or the telephone becomes your back-up should your primary access fail.2. Good foreign currencies "charting software" with a reliable, accurate data feed so that you can track currency movements in real time and perform the technical analysis necessary to trade effectively.3. An on-line Forex trading account with a brokerage firm which provides a reliable Trading Platform, fair "spreads", quick execution of trades, good on-line reporting, and excellent customer service.4. A subscription to at least one Forex Trading "Advisory Service" which provides market overviews at least daily. This gives you the context and overall directions of the market and will greatly assist in your own analysis and decision making.Most importantly, you will need effective training and/or mentoring to master the techniques and discipline which 90 percent of beginning traders lack. This can be home study via cd's or on-line lessons, classes you travel to, or trainer/mentors who come to you.1. COMPUTER HARDWARE: Specially Configured for Trading.MicronPCThere are many good choices for computer hardware. Over the last 6 years we have come to rely on consumer-poll-leader MicronPC to provide reliable hardware and great customer support. Their technical support is available 7 days a week and 24 hours per day and it is actually quick and friendly. We have made a special arrangement with MicronPC to provide substantial discounts to Forex-Trader referrals. Click the link below to see four configurations with detailed information and directions on how to order and receive a discount averaging hundreds of dollars off the price you would pay if you went directly to the Micron website and configured the same machine.TelekineticsComputer Trading Hardware For the Consummate Trader.This is the Quintessence of Trading Computers.TriKinetic is the only computer manufacturer dedicated exclusively to building trading computer solutions backed by lifetime technical support for the serious trader for whom downtime is not an option. With over 5 years experience and key relationships with the trading industry players, TriKinetic is a leader in complete 'Plug-n-Trade' (turnkey) trade stations.2. FOREX CHARTING SOFTWAREE-SignalThis charting software by Townshend Analytics professional charting software, works with a variety of data sources such as Comstock by Standard and Poors, Infotek etc. We use Comstock data for its Realtick is available by the month, a nice startup cost feature for beginners.3. TRADING PLATFORMS Clearinghouses Providing On-line Access to the Forex Trading Market.FXCM - Forex Capital Markets LLC A few the many reasons that we have been with FXCM the longest (and happiest) of the many Trading Clearinghouses we've tried -- they are commission-free and offer individual client accounts which are viewable online, their trading platform has the most efficient execution, with trader-friendly spreads and policies for both beginners and advanced traders with either large or small accounts. With an eye to coming regulations they voluntarily registered with U.S. regulatory agencies to demonstrate client assurance of safety through compliance with Securities rules.A Word of Experience:FXCM Charting software is free with a demo or live account, although useful it is not as complete as professional charting software. Also, their 'Mini-Account' might seem like a good start for a cautious beginner, however we have experienced much safer and more profitable trading results by learning to trade on their free demo account then, when ready, going 'live' with a 'full-size' trading account.4. TRADING ADVISORY SERVICESTrading Advisors are the esteemed 'Forecasters' of the Forex Trading Industry, experts who predict upcoming market moves based on experience, technical analysis and a host of other indicators.Forex Advisor - Live Trading AdvisoryThis advisory service is one we are enjoying more everyday, naturally first because of its value and consistently profitable returns month after month with truly excellent risk management protocols. But also because this system is the ultimate in 'live coached trading'. This advisory teaches you risk-safe, consistently successful, profitable trading strategies -- one live session at a time.A professional trader does all the analysis and posts charts and how-tos online on a leading edge proprietary Live Trading Platform while calling real-time trades with specific entry, exits and stop loss points.Max's Forex Trader AdvisoryThis twice-daily Trading Research email advisory service heralds the opening the European Trading Market and later in the day the opening of the Asian Trading Market with market analysis, related insights, movements to watch for, and trading suggestions. Written by Max, the esteemed forex trader from New Zealand, whose passion for, and intimate knowledge of the foreign currency exchange is a good marriage.SPECIALIZED TRADING ANALYSIS SOFTWARENostradamusAn intriguing 'Wheel of Fortune' compass design displays and forecasts the trends, reversals, etc. of the forex market via sophisticated algorithms. It gives clear buy and sell signals, and continuously displays its trading profit history related to its predications. Subscribe to it monthly per currency pair, or subscribe to all currencies.
From Computing in Science & Engineering
How Big Can You Think? Challenges at the FrontierThe world is on the threshold of a remarkable era of computing, in which raw computational power is no longer the limiting factor. The author argues that today's approach to computational science requires revision.For more visit Computing in Science & Engineering
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Essential Elements of a Successful Trader
Courage Under Stressful Conditions When the Outcome is UncertainAll the foreign exchange trading knowledge in the world is not going to help, unless you have the nerve to buy and sell currencies and put your money at risk. As with the lottery “You gotta be in it to win it”. Trust me when I say that the simple task of hitting the buy or sell key is extremely difficult to do when your own real money is put at risk.You will feel anxiety, even fear. Here lies the moment of truth. Do you have the courage to be afraid and act anyway? When a fireman runs into a burning building I assume he is afraid but he does it anyway and achieves the desired result. Unless you can overcome or accept your fear and do it anyway, you will not be a successful trader.However, once you learn to control your fear, it gets easier and easier and in time there is no fear. The opposite reaction can become an issue – you’re overconfident and not focused enough on the risk you’re taking.Start by analyzing yourself. Are you the type of person that can control their emotions and flawlessly execute trades, oftentimes under extremely stressful conditions? Are you the type of person who’s overconfident and prone to take more risk than they should? Before your first real trade you need to look inside yourself and get the answers. We can correct any deficiencies before they result in paralysis (not pulling the trigger) or a huge loss (overconfidence). A huge loss can prematurely end your trading career, or prolong your success until you can raise additional capital.Both the inability to initiate a trade, or close a losing trade can create serious psychological issues for a trader going forward. By calling attention to these potential stumbling blocks beforehand, you can properly prepare prior to your first real trade and develop good trading habits from day one.The difficulty doesn’t end with “pulling the trigger”. In fact what comes next is equally or perhaps more difficult. Once you are in the trade the next hurdle is staying in the trade. When trading foreign exchange you exit the trade as soon as possible after entry when it is not working. Most people who have been successful in non-trading ventures find this concept difficult to implement.For example, real estate tycoons make their fortune riding out the bad times and selling during the boom periods. The problem with trying to adapt a ’hold on until it comes back’ strategy in foreign exchange is that most of the time the currencies are in long-term persistent, directional trends and your equity will be wiped out before the currency comes back.The other side of the coin is staying in a trade that is working. The most common pitfall is closing out a winning position without a valid reason. Once again, fear is the culprit. Your subconscious demons will be scaring you non-stop with questions like “what if news comes out and you wind up with a loss”. The reality is if news comes out in a currency that is going up, the news has a higher probability of being positive than negative (more on why that is so in a later article).So your fear is just a baseless annoyance. Don’t try and fight the fear. Accept it. Have a laugh about it and then move on to the task at hand, which is determining an exit strategy based on actual price movement. As Garth says in Waynesworld “Live in the now man”. Worrying about what could be is irrational. Studying your chart and determining an objective exit point is reality based and rational.Another common pitfall is closing a winning position because you are bored with it; its not moving. In Football, after a star running back breaks free for a 50-yard gain, he comes out of the game temporarily for a breather. When he reenters the game he is a serious threat to gain more yards – this is indisputable. So when your position takes a breather after a winning move, the next likely event is further gains – so why close it?If you can be courageous under fire and strategically patient, foreign exchange trading may be for you. If you’re a natural gunslinger and reckless you will need to tone your act down a notch or two and we can help you make the necessary adjustments. If putting your money at risk makes you a nervous wreck its because you lack the knowledge base to be confident in your decision making.Patience to Gain Knowledge through Study and FocusMany new traders believe all you need to profitably trade foreign currencies are charts, technical indicators and a small bankroll. Most of them blow up (lose all their money) within a few weeks or months; some are initially successful and it takes as long as a year before they blow up. A tiny minority with good money management skills, patience, and a market niche go on to be successful traders. Armed with charts, technical indicators, and a small bankroll, the chance of succeeding is probably 500 to 1.To increase your chances of success to near certainty requires knowledge; acquiring knowledge takes hard work, study, dedication and focus. Compile your knowledge base without taking any shortcuts, thereby assuring a solid foundation to build upon.By Jimmy YoungEURUSDTrader
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