Forex Autopilot

An important question for all investors is: Can I afford to invest?

America always has been a land of promise. Whatever the course of our economy in the years immediately ahead, it is likely that opportunities for investment will be both numerous and attractive. Energetic new companies will emerge, looking for venture capital. Solid old companies will come forth with exciting new products. One industry or another will enjoy a boom period relative to the rest. And, of course, there will be casualties, too. There inevitably are.

For the observant investor this activity, properly evaluated and properly timed, will bring rewards. There will be chances to buy stocks before they have called attention to themselves and begun to rise, or to buy a Blue Chip, temporarily out of favor, at a depressed price. There will be stock splits, dividend increases, new issues, mergers, spin-offs, as well as the tidal rise and fall of stock prices all of this characteristic of the restless life of the market as a reflection of American business.

If you have never invested before, you are bound to be tempted.

Whether or not you yield will depend on your answer to the first hard question about investing: Can you afford it?

It is a lonely question and only you can answer it, for it involves not only how much money you feel able to invest, but what kind of person you are. Actually, it is several questions wrapped into one. You are asking, first, whether your financial condition permits you to invest; second, whether you can assume the risk implicit in stock investment; and, third, whether the market is a safe place for you to be.

Let’s take them one at a time.

Your Financial Position: One point should be made clear at the outset: you don’t have to be wealthy to invest. Among outsiders you can hear it said that stock ownership is a rich man’s game. This can mean any of several things: that the market is too complicated for the little man, that brokers aren’t interested in small orders, that only the person who can lose a bundle without feeling it should invest. However persuasive these arguments, they are all untrue.

The fact is—according to a recent New York Stock Exchange Survey—that almost half of all shareowners are in the $5,000—$10,000 a year income bracket. The median income of the 3,860,000 people who have become stockholders since 1956 is $6,900.

This would seem to suggest that an understanding of market operations is not too difficult to acquire, and that an attentive, interested broker is not too hard to find. It can also be assumed that these are shareowners with a fair appreciation of the value of a dollar and in no position to laugh off losses.

The goals a small investor can hope to achieve and the pattern of investment possible within the limits of a modest income will be outlined further on. The conclusion to be reached here is that investment is not a matter of enlarging a fortune you already possess, but of making available some money, however small the amount, to start with.

Regardless of your salary or income level, investment is possible if three conditions can be met:

1. If you are assured of a steady income.

2. If you are meeting your current running expenses and obligations.

3. If you have a cash reserve with which to meet unforeseen emergencies.

These conditions are, first of all, safeguards made necessary by the inescapable fact that stock prices fluctuate. Your judgment of when to buy, when to sell, and how long to hold should never be dictated by outside circumstances. Investment should be undertaken only with funds you can honestly and legitimately earmark as extra. With a regular income and your monthly bills paid, you know where you

stand and what amount can be put aside, in reserve, for any investment opportunity that arises. Or, of course, for emergencies. A sudden demand for ready cash—to pay a hospital bill, an insurance premium, or your income tax—should come, if possible, from your reserve, not from cashing in your investments. Whether your stocks are up or down, you are likely to take a loss—on the downswing because you may be selling at less than you paid, on the upswing because you may be selling at less than the potential.

A reserve also enables you to pick and choose. The fact that you have a few hundred dollars lying idle does not automatically mean the time is ripe to buy stocks. There’s no hurry. As the professionals say, “The market is always there.” If the trend of the market isn’t to your liking, or the price of a stock is higher than you want to pay, a reserve allows you the luxury of waiting for a more favorable situation.

Finally, a reserve permits investment over a period of time rather than all at once. As you learn more about the market, you will hear both sides of this argument. Some experts feel you should back what seems to be a good situation with all the investment funds at your command. Others will warn against getting greedy, and advise partial investment here and there, at different times, to spread the risk. This is not the place to discuss the merits of these techniques. The point is to give yourself the flexibility of moving either way your judgment dictates.

Remember: your income need not be large, so long as it is regular and enables you to put aside a surplus after you have taken care of your bills and the possibility of trouble. The surplus need not be large, either. Saving, as has been said many times, is a matter of regularity. No one considers $5 too small an amount to put into a savings bank; don’t worry if that’s all you can save each week for your accumulating investment reserve. In most markets, brokers usually can suggest a number of sound, solid stocks, offering liberal yields, that sell for less than $20 per share.

There is no rule about the number of shares an investor must buy. If you can afford a single share (plus commissions), a broker will get it for you. As a matter of fact, through the Monthly Investment Plan you can buy a fraction of a share, although the Plan requires a minimum investment every month.

To invest in the Forex, you will probably need a float of around $400 and invest from $1 to $10 per pip to start with, then reinvest your profits.

So there is a much smaller outlay required to invest in Forex, although it is more speculative.

Good Forex software will help to reduce the risks involved.

Long gone is the time when only banks and private institutions could trade the Forex market. Now, individuals have access to trade their own money, and lots of it.  The exchange of foreign currencies has since been open to private investors, central banks like Bank of America, and several countries.  But now with the introduction of the Expert Advisor trading systems, the smaller trader can now automate their trades like the big companies do.

The systems allow the user to set their own parameters and trading guidelines.  The program consists of software that has been develeoped for a specific type of trading style, not everyone trades the same.  Some spot trade, some trade big, some hedge and so on and so forth.  The developers of these types of software take into consideration any nuances of Forex trading as well as being aware that the market is trading 24 hours a day, even during weekends.

Without these types of systems in place, the trader would have to monitor the pair that is being trades on a constant  basis along with monitoring opening and closing times which is almost impossible to keep up with.  By using the Expert advisors a trader can setup trading signals to make life a bit easier such as a type of order, stop loss, trade entry, news tickers etc.

Some of the key benefits of using an automated trading system is that it gives the trader full control, but cuts out the emotional bond a trader has with his money…making the temptation to trade on a whim a lot less likely.  This takes the guesswork out of trading if the trader implements the right trading signals for this trading style.

The EA is a mathematical algorythm and it performs solely on formulas, so if the EA doesnt perform like it should it can be changed, augmented and tweaked until the trader finds the recipe for success that they are looking for.  Then, this process is repeated constantly to achieve a money making strategy.

Trading also involves the trends of the market, be it long-term or short-term.  These trends play a big role in the amount of trades that a trader is involved in.  The EA, if setup correctly, will take these trends in-stride and make the trades accordingly, minimizing the drawdown or losing trades.  Using historical data, traders can analyze and test their trading theories and strategies, some EA’s have a built-in function to record such data.

Almost every expert advisor system being developed now is made using the MetaTrader 4 platform since it provides reliable historical data that you can download from their site or any other, multilanguage support, solid and user-friendly interface.

Automated expert advisors are becoming the tool of choice for many traders and companies around the glode, most are free, but the ones that really rake in the money you have to pay for.  You get what you pay for.

We highly recommend anyone who is interested in making money with Forex Trading to look into getting Forex Megadroid bot as it is well worth the money!

Auto Pilot Forex Trading Tips

Foreign Exchange Market is a market where traders buy and sell currencies with the hope of making a profit when the values of the currencies change in their favor. People are making vast amounts of money from Forex trading. The Forex Market has a big potential for everyone, ranging from large corporate firms to ordinary, everyday people like you and me.

It is a very exciting trade with a huge money-making potential. Just imagine yourself sitting comfortably in your pajamas at your computer… you turn on the internet and make a few quick transactions and by the time that you get up to get a cup of coffee, you are several hundred dollars rich! Would you like that? I would!!

I can hear you say, “Wait a minute!!  This sounds just like another one of those confusing markets like stocks, options or traditional futures, so what makes this market any different?”

Aaah! Good question! So, in answer to your question, here are 10 good (if not great) reasons to enter the Forex Trade:

1. First and foremost, Forex trading allows for small investments. You do not have to be able to invest thousands of dollars to get started with this trade. You can start trading Forex with as little as $300 to $350 and could be well on your way to earning more than that on your first day.

2. The Forex markets are always open! You are able to trade anytime and from anywhere in the world. No waiting for the stock exchange to open. The market is ongoing, with generally only minor breaks on the weekends.

3. The funds that you invest are liquid; you can cash them anytime you want. No waiting for days to get your stocks converted into hard cash.

4. The value of the Forex Trading market is COLOSSAL: it is 30 times larger than all of the US equity markets combined. It is the largest market in the world with daily reported volume of 1.5 to 2.0 trillion dollars. This massive value makes it a lucrative and desirable trade to invest in.

5. It is a highly stable trade and offers greater strength over other markets. Countries and people are ALWAYS going to need currency. Although the value of different currencies goes up and down, the fluctuations are not as dramatic as stock prices and generally follow a predictable trend.

6. You do not have to worry about commissions, exchange fees nor any hidden charges when you trade Forex.  Forex brokers make only a small percentage of the bid and there are very respectable and free brokers available as well. Is that not wonderful for you?

7. You make profits no matter which way the currency is going. You will not worry about a falling currency value if you know what to do with it and make good gains.

8. Forex is a very transparent market. Unlike equity markets, where analysts have an unfair advantage over the layman because of their insider knowledge, the relevant information for Forex is equally available to every one through international news. Therefore, all Forex traders are in a position to make pertinent decisions according to the current market situations.

9. Forex market is extremely quick! It takes not more than 1 to 2 seconds to complete your transactions because it is all done electronically, online and in Real Time.

10. The final good news is that you do not need any formal education, licensing, diploma or degree to trade Forex. All you need is the know-how of how it works, trading strategies and some tips and techniques and you can be on your way to earn big profits.

Forex trading online may be the fastest path to financial freedom and an end to all your financial worries. It truly is an excellent, if not THE best home business opportunity for ordinary people.

You owe it to yourself to give it a try!

HOW TO predict the Future ? by studying the Past (Technical Analysis):

1) The best traders don’t discount one or the other but understand that having an understanding how the fundamentals influence market sentiment gives him/her an edge over those traders who don’t.

2) In my opinion, TECHNICAL analysis is the easiest and most accurate way of trading the FOREX market.

3) “The number’s don’t lie” – all available information and its impact on the market, are already reflected in a currency’s price.

4) Prices move in trends – the foreign exchange market is mostly composed of trends and therefore a place where technical analysis can be very effective.

5) History repeats itself – over time, certain chart patterns become consistent, predictable and very reliable. The question is SEEING them.

PRICES MOVE IN TRENDS

The traders who don’t believe this obviously have no need to implement a trading methodology on technical analysis. But, research has shown that those who trade “with the trend”, greatly improve their changes of making a profitable trade.

Finding the prevailing trend will help you become aware of the overall market direction and offer you better visibility,especially when shorter-term movements tend to clutter the picture.

HOW does technical analysis help to determine what the trend is and HOW to trade with then trend versus against it?

Even though, you learn you how to use and read various technical indicators to identify a long- term trend, spot predictable chart patters and use certain rules to enter and exit a high-probability trade, and even though a ll this involves sound logic, parameters, methods, formulas, data, and research, these technical indicators, by themselves, are not the Holy Grail of FOREX trading.

It takes discipline and emotional control to stick with trading following through the inevitable market ups and downs. Keep in mind, good technical traders expect ups and downs.

Which technical indicators are the BEST?

NONE - technical indicators should simply be components of your overall customized, personalized trading system, and not a stand alone system.
The objectives as a FOREX Technical Trader are:

1) To figure out the price action of the currency pair. Price is the main concern. If the EUR/USD is at 1.2224 and goes to 1.2020, 1.1980, 1.1940- the market is in a down trend.

Despite what every technical indicator might predict, if the trend is down, stay with the trend. Indicators showing where price will go next or what it should be doing are useless.

A trader should only be concerned with what the market is doing, not what the market might do. The price tells you what the market is doing.

2) Always remember that technical indicators are only giving you confirmations based on what the market is telling you. So listen to the market and let it tell you which method, strategy or techniques you should use.

HOW DO Economic Events impact Global Currencies:

When I asked several traders about their thoughts about using fundamental analysis as a part of their trading decisions, I have received two opposite responses.

RESPONSE of Trader A

Fundamentals that you read about are typically useless as the market has already discounted the price. I am looking at (1) the long term trend, (2) the current chart pattern and (3) identifying a good entry point to buy or to sell.

RESPONSE of Trader B

I almost always trade on a market view. I don’t trade simply on technical information alone. I use technical analysis and it is terrific, but I can’t initiate or hold a position unless I understand why the market should move.

There is a great deal of hype attached to technical analysis by some technicians who claim that it predicts the future.

Technical analysis tracks the past; it does not predict the future. You have to use your own intelligence to draw conclusions about what the past activity of some traders say about the future activity of other traders.

For me, technical analysis is like a thermometer.

Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he’s not going to take a patient’s temperature. If you want to be a successful trader in the market, you always want to know where the market is- up – down- trending or choppy .You want to know everything you can about the market to give you an edge.

Technical analysis reflects the vote of the entire marketplace and, therefore, does pick up unusual behavior. By definition, anything that creates a new chart pattern is something unusual.

It is very important to study the details of price action to see and observe. Studying the charts is absolutely crucial and alerts to existing disequilibrium and potential changes.

For forex traders, the fundamentals are everything that makes a country tick.

The release of economic & inflation indicators (i.e., consumer spending, employment cost index, government spending, producer price index, etc.), political actors, government policy or an individual event can set the market in a frenzy. These have to be considered when making the decision “ to trade or not to trade.”

Technical analysis, is a way of using historical price data in different ways to predict the future price of a currency pair.

Fundamental analysis is a very effective way to forecast economic conditions, but not necessarily exact market prices, and you SHOULD trade in agreement with the supporting technical indicators.

Foreign exchange traders put the most emphasis on technical analysis, because traders around the world use similar charts and tools in predicting market trends.

The reason the FOREX market can be so predictable some times is that if the majority are using the same graph for determining patterns and trends, then it is highly likely that they will act in a similar manner.

So several thousand traders who have all charted the same resistance line, for example, will most likely either set their trades and direction conform to that line.

When fundamental data is made available to the public there is a reaction from investors and speculators.

Information in the form of news and economic indicators is more vague than that of technical indicators. There is a lot of gray area in this type of analysis. The market will ultimately react to how people think the economic data compares to the current market situation.

Economic indicators usually reveal information that “Should cause a currency to go up in price” or “May cause a currency to go down”. The words “SHOULD” & “MAY” in the quotes above reveal the ambiguity of the fundamental data.

Here is an example of what analyzing fundamental data is like. Let’s suppose there are six economic indicators (there are a lot more).

Let’s call our six indicators 1, 2, 3, 4, 5, and 6. Now we wait for the data from our indicators to be published in a financial magazine or at an online source. We get the readings for our economic data for the EURO as following:

Indicator 1: is in a range where the Euro may go up
Indicator 2: is in a range where the Euro should go up
Indicator 3: is in a range where the Euro could go down
Indicator 4: is in a range where the Euro usually goes down
Indicator 5: is in a range where the Euro could go up
Indicator 6: is in a range where the Euro may go down

By looking at the above indicators, you don’t know what the Euro is going to do. Furthermore, currencies are always traded in pairs. So you would have to get the fundamental data for another currency pair and compare it with the EURO. I think you can image that this is not a simple task.

I do not want to discourage you away from fundamental data. The best way to learn is to learn about one piece of economic data at a time. Eventually you will build a puzzle from all of the fundamental and technical data and make more informed trading decisions.

HOW TO READ FOREX PRICE CHARTS?

Forex Price Charts, what DO they mean and HOW to use them?

Important numerous facts as discipline, trading rules, not being greedy etc., but one of the most important things is:

LEARN to read the charts as Charts represent the lifeblood of the market.

I admit that reading charts, and interpreting patterns, are more an art than a skill. Base and apply your entry and exit decisions on YOUR OWN combined methods of technical and fundamental analysis.

FOREX charts, are easier to interpret and to use. They reflect a slower moving, stable economy of a country, compared to the stock market, with its daily drama of company reports, Wall Street Analysts and shareholder demands.

Unlike stocks, currency charts do not spend much time in trading ranges and have the tendency to develop strong trends. Furthermore, Forex with its 4 Mayor currencies is easier to analyze than tens of thousands of stocks.

(Mayor currencies are: USD/JPY, EUR/USD, GBP/USD and USD/CHF)

The complimentary FREE live charting software, with the ultimate cutting edge technology provided by http://www.fenixcapitalmanagement.com/ , will be absolutely sufficient for you to analyze and watch any one currency pair. Understanding just a few basic points about the technical analysis of currency chart can lead to increased profit potential.

Pricing – Price reflects the perceptions and action taken by the market participants. It is the dealing between buyers and sellers in the Over-The-Counter (OTC) or “interbank” market that creates price movement. Therefore, all fundamental factors are quickly discounted in price. By studying the price charts, you are indirectly seeing the fundamental and market psychology all at once , after all the market is fed by two emotions – Greed and Fear – and once you understand that, then you begin to understand the psychology of the market and how it relates to the chart patterns.

Data Window Chart – FCM and most online charting stations, when you click on a price bar or candlestick, it will display a small box of data usually called a display window which will contain the following items:

H = Highest Price
L = Lowest Price
O = Opening Price
C = Close Price (or Last Price)

The most common types of price bars, used in FOREX trading, are the Bar Chart and the Candlestick chart:

Bars Charts -

Price bars are a linear representation (a line) of a period of time. This enables the viewer to see a graphic representation summarizing the activity of a specific time frame. As an example, I use 10 minutes, 60 minutes and daily time interval for my systems. Each bar has similar characteristics and tells the viewer several important pieces of information.

First, the highest point of the bar represents the highest price that was achieved during that time period. The lowest point of the bar represents the lowest price during the same period. Regular bars display a small dot on the left side of the bar which represents the opening price of the period and the small dot on the right side represents the closing price of the period.

Candlesticks - Japanese Candlesticks, or simply Candlesticks as they are now known, are used to represent the same information as Price bars. The only difference is that the difference between the open and close form the body of a box which is displayed with a color inside. A red color means that the close was lower than the open, and the blue color represents that the close was higher than the open.

If the box has a line going up from the box it represents the high and is called the wick. If the box has a line going down from the box, it represents the low and is called the tail.

Many interpretations can be made from these “candlesticks” and many books have been written on the art of interpreting these bars.

Chart Intervals & Time Frames:

A chart Time Scale & Period, or time frame, basically refers to the duration of time that passes between the OPEN and the CLOSE of a bar or candlestick.

For instance, with your broker software, you will be able to view a currency pair, in a 1-hour time frame over a 2-day period, 5-day period, 10-day period, 20-day period and 30- day period.

Most of the short-term time intervals (5-min and 1-min charts) are used for entry and exit points and the longer- term time intervals (1-hour and daily charts) are used to see where the general trend is.

What are *PIPS* ?

Currencies are traded on a price/ point (pip) system. Each currency pair has its own pip value.

When you see a FOREX price quote, you’ll see something listed like this:

EUR/USD 1.2210/13

Explanation:

a) If you want to BUY the EUR/USD ( meaning you BUY EUROS and SELL US$ ) you buy 100,000 EUROS and you SELL 122,130 US$, or in other words you receive
122,130 US$ for 100,000 EUROS.

b) If you want to SELL the EUR/USD ( meaning you SELL EUROS and BUY US$ ) you buy 122,100 US$ and sell 100,000 EUROS, or in other words you receive 100,000 EUROS for 122,100 US$.

The difference between the bid and the ask price is referred to as the spread. In the example above, the spread is 3 or 3 pips.

Since the US dollar is the centerpiece of the FOREX market, it is normally considered the ‘base’ currency for quotes. In the “Majors”, this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair.

For example a quote of USD/CHF 1.3000 means that fore one U.S. dollar you receive 1.30 Swiss Francs. or in other words, you receive 1.30 Swiss Franc for each 1 US$.

When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/CHF quote above increases to 1.3050 the dollar is stronger because it will now buy more Swiss Franc than before.

The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as EUR/USD 1.2080, meaning that for EURO you receive 1.2080 U.S. Dollars.

In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one Euro, British pound or an Australian dollar.

In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.

Currency pairs that do not involve the U.S. dollar are called cross currencies, but the calculation is the same. For example, a quote of EUR/JPY 134.50 signifies that one Euro is equal to 134.50 Japanese yen.

HOW TO BUY ( going “ LONG ”)and SELL ( going “ SHORT ”) in the FOREX Market?

Keep in mind 2 very important rules:

RULE # 1) Cut your LOOSING trades and let your WINNING trades RUN

YOU WILL HAVE LOSING TRADES. Every FOREX trader has. The secret is, that a consistent, disciplined trader, at the end of the day, adds up more winning trades than losing trades.

When you and see on your charts, without any doubt, that you are in a losing trade, don’t keep losing money. Most of the novice traders are lowering their stop loss just to “prove they are right” or “hoping that the market will reverse”. 99% of these trades, are ending up with more losses. Most of the profitable trades are usually “right” immediately.

Remember, smart traders know there are many other opportunities. CUT your losses short and compound those winning positions.

RULE 2) NEVER EVER trade FOREX without placing a Stop Loss Order.

PLACE a STOP order, right along with your ENTRY order, via your online trading station, to prevent potential losses.

Before initiating any trade, you have to calculate at what point ( price) you would be wrong, because the market changed direction, and would want to cut your losses.

To make profits, in the FOREX, a trader can enter the market with a *buy position* (known as going “long”) or a *sell position* (known as going “short”).

As an example let’s assume you’ve been studying the EURO. The EURO is paired first with the U.S. dollar or USD.

Your trading methods, rules, strategies, etc., tell you that the EURO will rice in the next 2 weeks, So you buy the EUR/USD pair meaning you will simultaneously buy EUROS, and SELL dollars).

You open up your excellent trading station software (provided to you for free by Fenix Capital Management, LLC www.fenixcapitalmanagement.com ) and you see that the EUR/USD pair is trading at:

EUR/USD: 1.2010/1.2013

As you you believe that the market price for the EUR/USD pair will go higher, you will enter a *buy position* in the market.

As an example, lets say you bought one lot EUR/USD at 1.2013. As long as you sell back the pair at a higher price, then you make money.

To illustrate a typical FX SELL trade, consider this scenario involving the USD/JPY currency pair:

REMEMBER Selling (“going short”) the currency pair implies selling the first, base currency, and buying the second, quote currency. You sell the currency pair if you believe the base currency (USD) will go down relative to the quote currency (JPY), or equivalently, that the quote currency (JPY) will go up relative to the base currency (USD).

HOW TO CALCULATE PROFIT OR LOSS?

The Profit Calculations, on the Short-sell trade scenario below, may seem somewhat complicated if you’ve never been in the FOREX market before, but this process is continually calculated through your broker trade station (software). I show you this process below so you can SEE how a PROFIT might occur.

The current bid/ask price for USD/JPY is 107.50/107.54, meaning you can buy $1 US for 107.54 YEN, or sell $1 US for 107.50 YEN.

Suppose you think that the US Dollar (USD) is overvalued against the YEN (JPY). To execute this strategy, you would sell Dollars (simultaneously buying YEN), and then wait for the exchange rate to rise.

Your trade would be the following: you sell 1 lot USD (US $100,000) and you buy 1 lot JPY (10,754.000 YEN). (Remember, at 0.25 % margin, your initial margin deposit for this trade would be $ 250.)

As you expected, USD/JPY falls to 106.50/106.54, meaning you can now buy $1 US for $106.54 Japanese YEN or sell $1 US for 106.50.

Since you’re short dollars (and are long YEN), you must now buy dollars and sell back the YEN to realize any profit.

You buy US $100,000 at the current USD/JPY rate of 106.54, and receive 10,654,000 YEN. Since you originally bought (paid for) 10,754,000 YEN, your profit is 100,000 YEN.

To calculate your P&L in terms of US dollars, divide 100,000 by the current USD/JPY rate of 106.54

Total profit = US $938.61

How Currencies are quoted and what moves individual currencies?

ONE of the best advantages in FOREX Trading is

The amount of money you need to place a trade (known as “margin”) is all that can be lost !

You have to know, that despite the super-high leverage offered by some Forex brokers up to (400:1); meaning if you put up $ 1000 the broker will allow you to trade like you really have $400.000).

Forex trading is still less riskier than Stock or Futures Trading, where you can loose more than you have deposited in your account.

This type of LEVERAGE does NOT EXIST in the equities or futures market

In the Equities or Futures markets, very often, sudden and dramatic moves occur, against which you can’t protect yourself, even by having placed your protective stops.

Your position may be liquidated at a loss, and you’ll be liable for any resulting deficit in the account.

But because of the FX market’s deep liquidity and 24-hour, continuous trading, dangerous trading gaps and limit moves are almost eliminated.

Orders are executed quickly, without slippage or partial fills. And finally, there are no margin calls. For your protection, the broker will automatically close out some or all of your open positions if your account equity falls below the level required to hold the positions.

Think of this as a final, automatic stop, always working on your behalf to prevent a debit balance.

Currencies are traded in dollar amounts called “ LOTS”

In Forex trading, with most Brokers, you have the choice between 2 different lot sizes.

Standard Lots or Mini Lots.

One Standard lot is equal to $100,000 in currency. The margin requirements, using a 400:1 Leverage, would be US$ 250, in other word you control $100,000 worth of currency for only 250 US dollars.

You mean, depositing $250 with a broker, I could trade 100,000$ worth of currency ???

NO, be aware, that your account size has to be more than the required margin of US 250. For example, if you place an order to buy 1 Standard lot ( @100,000) of USD/JPY and USD/JPY is quoted as 112.10/112.13, you buy USD/JPY at 112.13.

Your account balance would be $220, because you paid 3 pips or $ 30 for this trade.

If you would close this trade immediately, you have to sell it at 112.10 (the bid price) , for a loss of $ 30.

In fact you could not get executed on this trade, as the brokers trading platform would reject your order, for the reason of having insufficient funds in your account).

So, your account balance has to be minimum $280. $250 for margin and $30 for the trade.

BUT….IF, after you have initiated the trade to buy USD/JPY at 112.13, and the USD/JPY falls the next second 1 pip ( approx. $8), your position would be closed automatically, because of margin deficit.

I will explain later about having an adequate account size to trade the Forex Market.

Currencies are always traded in pairs in the FOREX. The pairs have a unique notation that expresses what currencies are being traded.

The symbol for a currency pair will always be in the form ABC/DEF. ABC/DEF is not a real currency pair, it is an example of a symbol for a currency pair. In this example ABC is the symbol for one countries currency and DEF is the symbol for another countries currency.

Some of the most common symbols used in Forex are:

USD – The US Dollar
EUR – The currency of the European Union “EURO”
GBP – The British Pound or cable
JPY – The Japanese Yen
CHF – The Swiss Franc
AUD – The Australian Dollar
CAD – The Canadian Dollar

There are symbols for other currencies as well, but these are the most commonly traded ones.

A currency can never be traded by itself. So you can not ever trade the USD by itself. You always need to BUY one currency and SELL another currency to make a trade possible.

Some of the most traded currency pairs are:

EUR/USD Euro against US Dollar

USD/JPY US Dollar against Japanese Yen

GBP/USD British Pound against US Dollar

USD/CAD US Dollar against Canadian Dollar

AUD/USD Australian Dollar against US Dollar

USD/CHF US Dollar against Swiss Franc

EUR/JPY Euro against Japanese Yen

The currency left of the / is called the base currency.

The currency right of the / is called the counter currency.

When you place an order to buy the EUR/USD, for instance, you are actually buying the EUR and selling the USD.

If you were to sell the pair, you would be selling the EUR and buying the USD. So if you buy or sell a currency PAIR, you are buying/selling the base currency.

The best way to remember is, by just thinking of the entire currency pair as one item.

If you buy it…you buy the first currency and sell the second currency. If you sell it…you sell the first currency and buy the second currency.

That means you would to be able to short-sell with no restrictions so you could make money when the market drops as well as when it rises.

The problem with traditional stock market or commodity trading is that the market has to go up for you to make money. With FOREX trading you can make money in all directions.

10 REASONS TO START TRADING FOREX!

More and more well informed investor and entrepreneurs are diversifying their traditional investments like stocks, bonds & commodities with foreign currency because of the following reasons:

1) FOREX is the largest financial market in the world.

With a daily trading volume of over $1.5 trillion, the spot FOREX market can absorb trading sizes that dwarf the capacity of any other market. In fact, when compared with the $50 billion daily market for equities or the $30 billion futures market, it becomes quickly apparent this gives you, and millions of other FOREX traders, almost infinite trading liquidity and flexibility.

2) FOREX is a True 24-hour market.

The FOREX Market never sleeps.  Trading positions can be entered and exited at any moment around the globe, around the clock, 5.5 days a week. There is no waiting for an opening bell as in the case of trading stocks. It is a 24- hour, continuous electronic (ONLINE) currency exchange that never closes. This is very desirable for you if you want to trade on a part-time basis, because you can choose when you want to trade: morning, noon or night.

3) There is never a Bear Market in FOREX.

You can have access to a seamless exchange of currencies. Currencies trade in “pairs” (for example, US dollar vs. JPY (YEN) or US dollar vs. CHF (Swiss franc), one side of every currency pair (for example, USD/CHF) is constantly moving in relation to the other. Thus, when you buy a particular currency, you are actually simultaneously selling the other currency in that particular pair. As the market moves, one of the currencies will increase in value versus the other. Of course, it is up to you to choose the correct currency to be long ( you bought) or short( you sold).

4) High Leverage – up to 400:1 Leverage.

You are permitted to trade foreign currencies on a highly leveraged basis – up to 400 times your investment with Fenix Capital Management, LLC and with some other brokers.

Standard 100,000- US$ currency lots can be traded with as little as 0.25% margin, or $250.

Mini FX accounts are permitted to trade with just 0.25% margin, meaning, just $25 allows you to control a 10,000-unit currency position.

Futures traders, who are accustomed to margin requirements generally equal to 5-7%-8% of the contract value, will immediately recognize that the FOREX market provides much greater leverage, and for stock traders, who must post at least 50% margin, there’s no comparison. If you’re looking for an efficient use of trading , trade the Forex Market.

5) Price Movements might be Highly Predictable.

Currency prices in the FX market generally repeat themselves in relatively predictable cycles, creating trends. The strong trends that foreign currencies develop are a significant advantage for traders who use the “technical” methods and strategies.

Unlike stocks, currencies have the tendency to develop strong trends. Over 80% of volume is speculative in nature and, as a result, the market frequently overshoots and then corrects itself. As a technically-trained trader, you can easily identify new trends and breakouts, to enter and exit positions.

6) YOU don’t pay commissions or fees to trade FOREX

When you trade FOREX, through Fenix Capital Management LLC (FCM) you can do it totally FREE of commissions and fees , regardless of your account size.

Fenix Capital Management LLC, requires a very low minimum amount to open a brokerage account, only US$ 200 and they do not charge commissions or fees to trade or to maintain an account, regardless of your account balance or trading volume.

7) YOU don’t have to pay trading fees or exchange fees.

There are none of the usual fees, which futures and equity traders are accustomed to pay:

NO exchange or clearing fees,
NO NFA or SEC fees.

Because currencies trade over-the-counter (OTC), via a global electronic network, in FOREX, what you see on your trading screen, is what you get, allowing you to make quick decisions on your trades without having to worry or account for fees that may affect your profit/loss or slippage.

In the equity and commodity markets, you must pay both a commission and exchange fees. The over-the-counter structure of the FX market eliminates exchange and clearing fees, which in turn lowers transaction costs.

HOW to Forex brokers make money if they don’t charge commissions?

Like all traded financial products, over-the-counter currency trading involves a bid/ask spread, which represents the prices at which your counterpart is willing to trade. Your broker will receive a part of this bid/ask spread.

Because the currency market offers round-the-clock liquidity, you receive tight, competitive spreads both intra-day and night. Stock traders can be more vulnerable to liquidity risk and typically receive wider trading spreads, especially during after-hours trading.

9) Market Transparency.

Market transparency is highly desired in any trading environment. The greater the market transparency, the more efficient the market becomes. Unlike other markets where transparency is compromised (like in the many recent scandals), FOREX markets are highly transparent (i.e., analyzing countries, and having access to real-time research / news, is easier than analyzing companies).

Because of this transparency, as an FX trader, you will be able to apply risk management strategies in accordance to your fundamental and technical indicators.

10) Instantaneous Order Execution

The FX market offers the highest level of market transparency out of all the financial markets. Because of this, order execution and fill confirmation usually occur in just 1-2 seconds.

In Forex, order execution is all-electronic and because you’ll be trading via an Internet-based platform, instantaneous execution is routine.

There are no exchanges, no traditional open-outcry pits, no floor brokers, and consequently, no delays.( will be continued )

Forex trading systems are all about getting investments into the foreign markets. Foreign exchange markets are abbreviated to be called Forex. The worldwide trading of stocks in companies and in products happen over the Forex trading system. There are over a trillion dollars traded on the Forex market everyday. You can learn to chart and follow markets in the Forex trade world on your own, or you can rely on a broker as you would in the New York stock exchange. The Forex trading systems are similar in method, but each is a proven method of how to make money, how to learn about companies and how to follow what is going on with the money you are investing in the Forex trading markets.

You can live anywhere in the world and trade stocks and investments in the companies that are involved in the Forex markets. There are no limitations to the money you can make, or the money you can lose. The Forex markets can be tapped into online, over the phone or by contacting a broker in person.  If you are interested in making money, you can do it on the Forex market, without having to have employees, or a broker to do this. You can get involved in learning about the investments in the Forex markets, and take on the responsibility for your own money, and making your own money. Many are starting their own businesses using their education and experience on the Forex market to make money.

The Forex market is one that is world wide, so there is sure to be something of interest to just about anyone that wants to expand their investments and expand their learning about money in the world wide markets. There are many experts in the Forex markets, and using the Forex trading system that you feel most comfortable with, you can be a Forex market expert as well.

There are no go betweens, such as large banks or such when you are involved in the Forex market. There are no need for fees and transaction fees when you do your own trading on the Forex markets. You can learn the Forex trading system that best suits your learning needs, and follow it to chart companies, chart growths, and to invest in companies that have a solid future. There are companies and markets through out the world that you can invest with, to increase your wealth and your investment portfolio.

A few different regions of trading exist in the Forex markets, with sessions in Tokyo, Asia Pacific, and in the Americas. Trading is always non-stop, and moving from London to New York, to Tokyo and so on again and again. You can invest in the US dollar, the Euro, the Japanese Yen, or in Swiss Franc among others.