Forex market

Are you thinking of investing in foreign currencies? Your financial consultant can tell you why forex is better over any other markets. Forex trading has some features unique to itself, like the forex day trading market. Another good feature of forex market is it has large number of traders and is also very flexible in terms of working hours. Forex market operates 24 hours a day!

Going by the name, we understand that it involves exchange of money only during daytime. Hence one buy will always be equal to one sell of foreign exchange currency. The main objective is to not let any variation at the end of the day. In case of any discrepancies, the amounts of buys are tallied with the amount of sales. In normal trading, the closing price of last day may not tally with the opening price of the present day. Forex day trading ensures that there are no such fluctuations.
We will share all the little bits of information and also the tips to day trade in the forex market. Here you go:
Decentralization of activities – Since the forex day trading market is decentralized, any one can trade from any part of the world. Take this opportunity to trade on the market, even if you are not located in the place there.
24 hours operative – The market works 24 hours a day and round the year. Hence if some currency is at low in one part of the world due to closing hours, it may be stronger in another part of the world. Hence one may trade hoping for a consistent performance throughout the schedules.
Be an early bird – Always go for early trading. Currency prices are always on the early morning base. If you invest in the morning trades, you might see fair chances of the values appreciating in the later part of the day.
Get knowledgeable – To know the trading, you should learn it! Gain knowledge on the know-how of the market. Be an avid reader of financial articles and magazines. You can also take up some courses or examinations to arm you stronger.
Be a good observer – Always keep a constant watch on the trading sessions. You can do so for every one-hour or two hours. This will get you a clear picture on the ups and downs happening in the market.
Study price movements – Check for the market trends. Always follow the market trend when you a new entrant. Go along with the market flow.
Get your own technique – Once you start following the market trends, you need to set your own analysis into them. Develop your own techniques to understand the trades. You will come up with the best approach for yourself.
Picking up this trade is not an overnight job. When you achieve brilliant results on your trades, don’t go overboard. Be consistent with the same strategies till you establish your roots into the market.

Trade Forex From Home

Million Dollar Traders was on BBC2 last night. What a great introduction to city traders and how unpredictable the Stock market can be! So thats why I trade the Forex and not the Stock Market then!

Some of the trainees have aspirations to trade full time including a retired man who was interviewed stating that he wanted to use his savings to trade from home after the series had finished. With the availability of great trading from home facilities avaialble to anyone, anywhere in the world and anytime day or night - trading from home, especially within the Forex market is a real possibility.

Well I guess it was pretty bad timing as the program was filmed last year when Freddie Mac and Fannie Mae announced financial meltdown in the US so the newbies couldn't be trading at a worse time! However the familiar 'frozen finger' inability to place a trade was prevalent so too was emotional attachment and emotional reactions, loss of confidence etc to trading which most newbies go through - including myself.......oh yes some good 'ol roller-coaster days but have managed to keep it together long enough to have learnt and come through the other side.

Having said that I haven't been able to do it trading the UK Stock market - Forex is where its at as far as I'm concerned so hats off to the guys in the program for trading the UK Stock market through one of the most difficult periods in a generation.

Trading psychology and risk management as emphaised in the program are essential key factors to get right when trading any market. Building this into your strategy, giving yourself targets such as the '3 srikes and your out' rule will make this easier to deal with. Don't allow yourself more than 3 trades to go against you in one trading period. If that happens finish for the day there.

Trading any market has the ability to wipe out your money, savings and future. As the Million Dollar Trader program is showing, trading without strategies is like playing with fire. Formulate a good solid trading strategy before you open any position - it will also make you more confident as knowing you have done your homework is good for your trading mindset.

Forex Tips 1--7

Tip 1. Gamblers go to casino. All unproved, spontaneous actions in Forex trading — are a part of pure gambling.
Any attempt to trade without analysis and studying the market is equal to a game. Game is fun except when you are losing real money...

Tip 2. Never invest money into a real Forex account until you practice on a Forex Demo account!
Allow at least 2 month for demo trading. Consider this: 90% of beginners fail to succeed in the real money market only because of lack of knowledge, practice and discipline. Those remaining 10% of successful traders had been sharpening and shaping their skills on demo accounts for years before entering the real market.
A good demo account to start practicing with could be, for example, FXGame from Oanda.

Tip 3. Go with the trend!
Trend is your friend. Trade with the trend to maximize your chances to succeed. Trading against the trend won't "kill" a trader, but will definitely require more attention, nerves and sharp skills to rich trading goals.

Tip 4. Always take a look at the time frame bigger than the one you've chosen to trade in.
It gives the bigger picture of market price movements and so helps to clearly define the trend. For example, when trading in 15 minute time frame, take a look at 1 hour chart; trading hourly would require obtaining a picture of daily, weekly price movements.

If a trend is hard to spot — choose a bigger time frame. Up and down market patterns are always present. Always make sure you know the dominant trend, unless you are a scalper. Scalpers have no need to spend their time studying big trends, what's happening in the market here and now (during 5-10 minute time frame) should be of only importance to a Forex scalper.

Tip 5. Never risk more than 2-3% of the total trading account.
One important difference between a successful and an unsuccessful trader is that the first is able to survive under unfavorable conditions on the market, while an unsuccessful trader will blow up his account after 5-10 unprofitable trades in the row.

Even with the same trading system 2 traders can get opposite results in the long run. The difference will be again in the money management approach. To introduce you to money management, let's get one fact: losing 50% of total account requires making 100% return from the rest of money just to restore the original balance.

Tip 6. Put emotions down. Trade calm.
Don't try to revenge after losing the trade. Don't be greedy by adding lots of positions when winning.
Overreaction blocks clear thinking and as a result will cost you money. Overtrading can shake your money management and dramatically increase trading risks.

Tip 7. Choose the time frame that is right for you.
Choosing wise means that you are comfortable and have time enough to analyze the market, place and close orders etc. Some people can't wait for hours for the price to make a move, they like action and therefore prefer smaller time frames. On the contrary, for others 10-15 minutes is a hustle to be able to make the right decision.

Forex Tips 8--15

Tip 8. Not trading or standing aside is a position.
When in doubt — stay out. If it is not clear where the market will move — don't trade. In this case saving present capital is and absolutely better choice than risking and losing money.

Tip 9. Learn to use protective stops. Respect them and don't move.
Hoping that market will turn in your direction is a very delusive hope. By moving a stop loss further a trader increases his chances to end up with much bigger loss.

When holding to a losing trade too long, and even if funds permit, traders as a rule are very reluctant to accept big losses, thus often continue "hoping for best". In the mean time invested money is stuck in the open trade for unknown period of time (weeks and even months) and cannot be used for opening new positions. Not working money — dead money. Also this will result in constant interest payments for holding open positions.

Tip 10. "Keep it simple, stupid" — applies to indicators, signals and trading strategies.
Too much information will create a controversial picture of when to trade and when not to. To avoid lots of confusion create a simple but working method of trading Forex.

Tip 11. Think about risk/reward ratio before entering each trade.
How much money can you lose in this trade? How much can you gain? Now, make a decision if the trade is worth entering.
Example: if trader is looking for possible 35 pips gain and possible 25 pips of loss, such conditions are not worth trading. Compare it with the situation when a trader has 100-120 pips of potential gain and only 10-20 pips of possible loss. This is the trade to open!

Tip 12. Never add positions to a losing trade. Do add positions when the trade has proven to be profitable.
Don't allow a couple of losing trades in a row become a snowball of losing trades. When it is obviously not a good day, turn the monitor off. Often not trading for one day can help to break a chain of consecutive losses. Trying to get revenge can often make things worse.

Tip 13. Let your profits run.
Let your position be open for as long as the market wishes to reward you. Of course, for this traders need a good exit strategy, otherwise they risk to give all profits back...
Running two or more open trades gives an option to close some positions earlier and keep others running for higher profits.

Tip 14. Cut your losses short.
It's better to finish unprofitable trade quickly than wait for the situation to get worse. Don't put a stop loss too far — it's your money you risk. Better calculate the best spot to enter when a potential loss would be minimized. Again: respect your stop and don't move it "cherishing hopes".

Tip 15. Trade currency pairs in respect to their active market hours.
Learn about overlapping market hours: when two markets are open and highest volume of trades is conducted.
For example, Australian and Japanese trading sessions are overlapped from 8pm to 1 am EST. At that time trader can successfully trade AUD/JPY currency pair.

Forex Tips 16--22

Tip 16. Choose the right day to trade.
This recomendation is often wrongly taken as an optional thing, because everyone knows that Forex market is open 24 hours a day 7 days a week. Yet, choosing the time to trade can make a difference between successful and hopeless trading.

It's proved and highly recommended not to trade on Mondays, when the market has recently awaken and is making first "probation steps" to form a new or confirm a current trend; and on Fridays afternoon, during the huge volume of closing trades. The best days to trade are Tuesdays, Wednesdays and Thursdays.

Tip 17. Learn about Fibonacci levels and how to use them for trading.
Fibonacci can be very helpful in trading, even partially using the study, for example, to determine the best exit, can bring traders to a new edge of trading.

Tip 18. Always ensure that a signaling bar/candle on the chart is fully formed and closed before you enter a trade.
A golden rule of trading: "Always trade what you see, not what you would like to see" is the best explanation here.

Tip 19. If you ask for someone else's advice as about how and when to trade
in other words, choose to rely on live trading signals from other traders, make sure you do it for your benefit, not for disaster. If you use such signals to discover how other traders do analysis and study on the price — you are on the right track and soon you'll be able to do analysis yourself.
But if you're just blindly following recommendations and your only task is to push the correct button... think again.

Tip 20. Using a highly leveraged account comes at a cost.
It will, of course, give a trader more financial gear to trade, but for inexperienced traders high leverage, and, in fact, any Forex leverage can be disastrous. When a trader signs up for a high leverage without knowing how to accurately use it to own advantage, he simply signs up for additional risks that multiply with higher leverage in a tight "friendly" proportion.

Tip 21. Learn to measure trading success by the end of the day, week and then month and year.
Do not judge about your trading success on a single trade. To be successful traders don't need to win every trade, they also don't become rich in one trade — they need to be profitable in a long run.

Tip 22. There is no such thing as a secret approach to understanding the market.
Take the time to develop a solid trading system and find out that the secret to trading success lies in hard work and constant learning.

European Stocks Likely To Extend Previous Session's Recovery

(RTTNews) - The major European markets are likely to open modestly higher on Tuesday on the back of strong Wall Street and Asian cues amid optimism about quarterly results of U.S. banks. Encouraging British retail sales data and news from the beleaguered housing market may also help stocks add to their previous session's gains.

Housing market sentiment in Great Britain improved to a 21-month high in June, according to the latest survey results from the Royal Institution of Chartered Surveyors. The Institute said Tuesday that its topline house price balance improved to minus 18.1 in June from a revised reading of minus 43.8 in May.

Separately, total retail sales in the United Kingdom jumped 3.2 percent year-over-year in June after falling 0.8% in May, the British Retail Consortium said on Tuesday.

Investors also look forward to British consumer prices and DCLG house prices reports for more insight on the state of the domestic economy.

At 5.00am ET, German ZEW survey and Eurozone industrial production reports are expected. German ZEW economic sentiment is expected to rise to 47.8 in July from 44.8, while current situation is predicted to improve to minus 88 from minus 89.7. Economists predict Eurozone industrial output to grow 1.5% in May from the prior month, while see another 17.5% annual decline.

Asian stocks rose sharply on Tuesday, aided by the overnight surge on Wall Street. An upward revision to Singapore's 2009 GDP forecast by the government, strong earnings forecast by Korea's largest steelmaker POSCO and an improvement in business conditions in Australia, also helped lift investor sentiment.

Meanwhile on Wall Street, positive analyst comments on the financial sector helped stocks surge higher on Monday with bank stocks leading the way. The major averages saw some further upside going into the close, ending the session at their best levels of the day. The Dow Jones Industrial Average closed up 2.27%, the Nasdaq Composite index moved up 2.12% and the S&P 500 index rose 2.49%.

In economic news, the U.S. federal deficit topped one trillion dollars for the first time ever, according to Treasury Department statistics released on Monday. The Department reported that the federal deficit in June totaled $94.3 billion, pushing the total in the current fiscal year to nearly $1.1 trillion..

Crude oil futures drifted lower on Monday, briefly touching their lowest level in almost two months, on concerns that a gloomy economic outlook could curb energy demand. After closing at $59.69 a barrel, down 20 cents in New York trading on Monday, the commodity is now trading firm at $60.18 in Asian trading amid a stock market rally.

In corporate news, Frankfurt Stock Exchange listed Software AG said it has plans to acquire software, solutions and services company IDS Scheer AG for a total of 482.4 million euros. In addition, the company said that the founders of of IDS have agreed to sell their stake.

Kosmos Energy announced that it has signed definitive documentation for $750 million project finance debt facilities, which would be secured by the shares of the company's subsidiary Kosmos Energy Ghana and its interest in the world-class Jubilee oil field offshore Ghana.

Alcatel-Lucent SA's labor unions requested a meeting with French President Nicolas Sarkozy to discuss planned job cuts and the company's future. Sarkozy will meet with Alcatel-Lucent Chief Executive Officer Ben Verwaayen on July 15.

Swiss engineering group Sulzer reported a 29 percent drop in first-half orders and does not expect a quick recovery in its key markets.

German automaker Daimler AG announced Monday the sale of 40% of its equity interest in Tesla Motors Inc. to its new major shareholder Aabar Investments PJSC of Abu Dhabi.

The European markets rose on Monday, led by banking and automotive stocks. The FTSEurofirst 300 index of pan-European blue chips closed 1.95% higher, while the narrower DJ Stoxx 50 index rose 2.02%. Around Europe, the U.K.'s FTSE 100 index rose 1.82%, France's CAC 40 index surged up 2.31% and Germany's DAX index climbed 3.19%.

Fundamental or Technical: Which path to follow?

Whether it is fundamental or technical, forex market analysis depends on two key principles. There are tools that can allow us to predict the future price action, and market movements are not completely random. That the first principle must be valid is obvious. If there were no tools with predictive capability, there would be no possibility of profiting from the price action. And if market movements were completely random, there would be no possibility of making predictions in any case.

Predictions are central to many forex strategies, and technical and fundamental studies use different methods for deriving them. The crucial difference lies in the fact that while technical analysis attempts to establish the future value of an asset (in our case, a currency pair), fundamental forex market analysis focuses on discovering whether it is undervalued, or overvalued at present.

Proponents of fundamentals analysis claim that it is difficult to be certain about the future value of any asset in the volatile environment of trading. The best approach is to concentrate on what the current prices are in the market, comparing those values with the theoretical prices determined by fundamentals, and on that basis deciding on the nature of our trade, fundamental analysts suggest. They blame technicians for using unreliable tools for predicting what is obviously unpredictable. At least in the short term, it is impossible to determine the direction of the price, they claim.

In fact, the difference between technical and fundamental analysis is not as deep as it will seem if we evaluate them based on their tools and mission statements. Where the fundamental analyst speaks of an imbalance of supply and demand, an irrational positioning of traders, or faulty risk perception, the technical analyst will speak of divergences, market overextension, panic, oversold or overbought levels, bubbles, and similar concepts, but in truth they all define the same underlying phenomena. The extreme imbalances of fundamental analysis are parabolic price trends in technical jargon. Irrational positioning may coincide with divergences. And panic may match a period of re balancing of fundamental factors.

The crucial point is that these equivalences are valid only when the analysis is correct. When, for instance, an economic situation is coupled to a technical phenomenon (let’s say for example, that the stock prices enter a strong downtrend as banks contract lending and bankruptcies occur, as dictated by theory), the strong relationship is unfortunately devoid of any causality that may facilitate predictions, at least in the short term. In other words, it is not possible to predict the technical configurations that will be caused by economic processes, although we can be pretty sure that something will happen.

In sum, technical and fundamental analysis are just mirror images of each other. But the mirrors work only when there’s something to show. If either of the mirrors is broken (that is, the analysis is faulty), there will be nothing to match. Consequently, instead of worrying about the efficacy of either school, it is better to focus on perfecting our skills so that the analysis that we perform is the best, regardless of the school to which we belong.

The Hidden Techniques of Forex

Forex is a big market to participate in and surprisingly only the top 5% are making money. That means the remaining 95% of traders are either breaking even or losing money. The small minority at the top in this business have their own hidden techniques and strategies that they use to profit. I hope to give you a glimpse into what they do.

The expert trader also knows when it is appropriate to drop the training wheels, which happen to be the demo platforms. I’m not saying demos are bad because they are excellent tools for people relatively new, but there is a point where they can no longer help you and can be detrimental to your success. You have to learn to recognize this point and stop using it.

Forex Trading Strategy - Three Steps of Development

The three steps of development are:-

1. Emotions
2. Complexity
3. Testing

Emotions and intuition cannot be calculated mathematically. Mathematics is the only thing a trading system has to work with. So the first and most fundamental principal of trading system development is that every rule to enter or exit the market must be mathematically justified.

Trading systems grow into more and more complex ones by including rules that take into account more and more parameters. I believe that excessive amount of rules can ruin the successful trading system.

Testing is the absolutely necessary step. You need to have historical price data to test your system.

Choosing the Right Day for Forex Trading

Choosing the right time to trade can make a differences between successful and hopeless forex trading.

It’s proved and highly recommended not to trade on Weekday, Mondays, when the Forex market has recently opened and is making first steps to form a new trend and on Friday’s afternoon, during the big volume of closing trades. The best days to trade are Tuesday’s, Wednesday’s and Thursday’s, So Basically trade between Weekdays.

The Costs Of Forex Trading

The costs of trading depend on several factors, including the instrument and market you are trading. Most of the costs you pay are to your brokerage firm. They need to make a living in exchange for the services they provide.

• Commissions
• Slippage
• Spread
• Platform Fees
• Expenses

However, if you want to look at trading as a business, you may have to minimize them and make sure you are getting the most for every dollar you spend to ensure your long-term survival.

Happy Forex Trading!