Forex Manual Blog

06294086 asked:


Hello guys,

I’m interested in learning more about forex, options and futures trading. I heard that there are mini or micro account that can go as little as US$ 200 or 300 dollar. Is it true ?

Also, any recommendations for free forex, options and futures trading simulators ? I know that some websites provide this service but usually the virtual capital is too high (10K or up), and I want to set the initial capital to small amount like US$ 300 or 500.

If possible, is there any recommendations for courses/books ? I’m not aiming for those fancy amount of income, several thousand/month is OK. Of course I’m not looking for courses that cost hundreds or thousands of dollars…
Thanks for the input. I agree that it’s a bit too much to expect thousands of returns for such a small amount of capital.

But, if I expect my capital which is around 300 or 500 to be doubled by around 1-2 month. Doesn’t is sound possible ????
My plan is actually something like this :
The capital will be 300 or 500. The goal is to double the capital by around 1 - 2 mounth(s).
When I have more money, I will buy more lots…

To make it safer, every time I manage to double the previous capital, I will do one more time before I plan to use more capital to trade.

It will be something like this (US$500 capital) :
500 - 1000 - 1000 (don’t use for trading) - 2000 - 2000(don’t use for trading) - 4000 and so on …

Now the problem is to find the system that are able to do this… Any recommendations ?

I personally distrust systems that cost hundreds or thousands or dollars. There are simply too many scams…

HAKE

Sujoy Mukherji asked:


 

The foreign exchange market, also defined as currency market or forex or FX is the biggest and concurrently the only market without any premise, standing floor or headquarter; there is no central exchange, or clearing house.Its daily turnover is much more than 3 trillion dollars, made by transactions between large banks, central banks, currency speculators, multinational corporations, governments. If we combined daily turnovers of all equity stock exchanges on the whole world, we would have to multiply them by more than 10 in order to amount to forex volume.

The Foreign Exchange market (”Forex”), is the largest financial market in the world, the daily average turnover of which reaches US$1.2 trillion. The main essence of Foreign Exchange is the simultaneous buying of one currency and selling of another (world’s currencies are on a floating exchange rate and are always traded in pairs, e.g. Euro/Dollar or Dollar/Yen).

FX Trading is not centralized on an exchange, as with the stock and futures markets. On the contrary, Forex market is considered an Over the Counter (OTC) or ‘Interbank’ market, due to the fact that transactions are conducted between two counterparts over the telephone or via an electronic network.

Historically, Forex has been mainly dominated by banks, including central banks, commercial banks, and investment banks. However, the percentage of other market participants is rapidly growing, and now includes large multinational corporations, global money managers, registered dealers, international money brokers, futures and options traders, and private speculators.

One of the main advantages of Forex is that it is a true 24-hour market that begins each day in Sydney, and moves around the globe as the business day begins in each financial center, first to Tokyo, then London, and New York. Unlike any other financial market, investors can respond to currency fluctuations caused by economic, social and political events at the time they occur - day or night.

For example, if you buy the shares of company XYZ at N10 per share and the share appreciates to N15 and you sell it, you will make N5 of each share bought with the company shares exchange rate. Same vein, if you buy USD$ at N120 and $ appreciates to N125, and you sell, you will make N5 of each $ you bought, but unlike stocks, interest exchange rate can appreciate within 1 minute of purchase.

Traders can reduce their risks in forex trading by implementing forex buy and sell signal generator softwares. These tools require minimum human interaction and thus allow pragmatic decision making. This reduces the chances for financial loss and enable better forecasting patterns.

For the institutional investor, absolute consistency is not a problem, since they have an array of personnel and resources at their disposal. For individual investors, there are three groups. Those who trade without consistency, those who trade with manual consistency, and those who trade with automated consistency. The novice, of course, is the trader who thrashes from trade to trade. The individual investor who uses consistent discipline or automation as the foundation of his trading activity maximizes his level of sophistication.

Successful trading in forex demands being a sophisticated investor, who would be operating with awareness of their environment, and that awareness informs their trading plan.



YASUDA

chris asked:


A lot has been researched and documented about the Forex (Foreign Exchange) money making secrets. I being one of those part-time traders for a few years now, is approaching the whole Forex money making aspect from a different angle. The

ideas that are listed below are not rocket sciences, but it is basically aimed at minimizing the amount of time that you spend sitting infront of your computer, watching the Forex trading charts etc but make a reasonable returns on your investments. This article is NOT written with full-time Forex day traders in mind as they will always have to go through the daily grind of candlesticks and pips and whatsoever. This article is for those who have a full-time job or something but want to try their hands in the Forex market, but they either donot have the necessary expertise nor have the time and energy to do so.

(1). Get to know Forex traders in your Area/State/Country:

I actually find this idea the best choice if you want to make money in Forex. The reason being obvious,you donot want to spend time, neither do you have the expertise, so why not leverage on an expert trader’s skill. You can scour the Yellow Pages, Internet Business/Trade directories, manuals, journals, newspapers, articles etc to get to know about Forex Traders in your area.

Next, do a little bit of research (a.k.a due diligence) and see if they are operating a Managed fund or so called Hedge fund. Any professional Forex trader who is trading on behalf of his clients, will have to be legitimate. Filter down your list to a bunch of Forex traders who operate a Managed fund. Refer to their websites, articles, press releases etc and evaluate their Forex trading skill and professionalism. Make a visit to their office once, get to know their offers, Forex trading methodologies etc and then make a decision if you want to make some investment with them.

The best choices would be an established Forex fund manager in your area, rather than an XYZ in a ABC Country. This gives you the best chance of monitoring their performance, communication and more importantly their authenticity.

However, there are Forex traders who does not operate on a large scale and does not own a Company or anything of that sort. In this case, you can still approach them a depending upon the law in your country/area, you will have to give him the Power of Attorney to manage your Forex funds.

(2). Friend/Close associate/Collegue/Boss:

This is quite similar to (1), however this does not involve the legalities of Hedge fund management. However, this idea is more discrete and it all depends on your acquitance with other retail Forex traders anywhere in the world. Note that, a mutual trust and a healthy relationship is what it matters in such association. This way, you both will share your Forex trading secrets, merge trading methodologies of yours and evolve a new innovative platform and thus rewarding mutually. You can join in various Forex forums, business seminars, chat rooms and make your presence felt with your knowledge. Donot approach these forums with the sole idea of meeting someone special to make you big money in Forex. Such relationships takes time.

(3). FreedomRocks/ FusionATS:

I am not going to go into great details about these Forex trading platforms as there are tonnes of information available on the Internet about them. These sites basically help a novoice trader to make reasonable (if not big) profit in the Forex market by making use of their trading strategies. This does not call for a thorough knowledge on Forex, but just

the basics would do. However, as time goes by, and your knowledge improves, you can make the system work really well for you.

Finally, Forex market is BIG, it’s really BIG and very liquid and definitely money is there for those who has the will to do so. So, good luck with your Forex venture.

Chris

www.forexaim.com



STROZIER

Andrew Daigle asked:


Online trading has caused a major paradigm shift in investing. At the turn of the millennium, there are over 6 million online investment accounts, up from 1.5 million in 1997. As a result, start-up firms now compete directly with financial institutions to serve investors in the new Economy, and the clear winner is the customer. The competition between the brick and mortar institutions and the Internet-based companies has dramatically lowered the costs of investing, and empowered the individual investor to take control of their own investment strategy.

On-line trading will revolutionize the currency markets by making it accessible to the small and medium sized investor. For the first time, these investors have the ability to execute transactions of between $100,000 and $10,000,000 at the same prices the Interbank market offers for deals well over $10,000,000. This benefits both those who wish to speculate on the direction of the currency markets for profit, as well as the money manager or corporate treasurer looking to hedge against unwanted exposure to future price fluctuations in the currency markets. I am going to discuss the Benefits of Trading Forex.

Very few on-line brokers are able to offer their clients real-time bid/ask quotes, which facilitates instantaneous deal execution - no missed market opportunities. Real-time prices also allow investors to compare an on-line broker’s dealing spread with that of other pricing services, to ensure they are receiving the best possible price on all their Forex transactions.

Many on-line Forex brokers require their clients to request a price before dealing. This is disadvantageous for a number of reasons, primarily because it significantly lengthens the execution process from just a few seconds to possibly as long as a minute. In a fast paced market, this could make a significant difference in an investor’s profit potential. Also, some of the more unscrupulous brokers may use the opportunity to look at an investor’s current position. Once they have determined whether the investor is a buyer or a seller, they ’shade’ the price to increase their own profit on the transaction.

Timing is everything in the fast-paced Forex market. On-line trades are executed and confirmed within seconds, which ensures that traders do not miss market opportunities. Even the incremental extra time it takes to complete a transaction over the phone can mean a big difference in profit potential. Introduction simply, executing trades electronically reduces manual effort, thereby lowering the costs of doing business. On-line brokers are then able to pass along the savings to their client base. The fast-paced nature of the Forex market compels traders to execute multiple trades each day. It is vital for each client to have real-time information about their current position in order to make well-informed trading decisions.

Access to timely and relevant information is critical. Professional traders pay thousands of dollars each month for access to major information providers. However, the very nature of the Internet affords users free access to reliable market information from a variety of sources, including real-time price quotes, international news, government-issued economic indicators and reports, as well as subjective information such as expert commentary and analysis, trader chat forums etc.

The main advantage of the Forex market over any exchange-traded instruments is that the Forex market is a true 24-hour market. Whether it’s 6pm or 6am, somewhere in the world there are always buyers and sellers actively trading Forex so that investors can respond to breaking news immediately. In the currency markets, your portfolio won’t be affected by after hours earning reports or analyst conference calls. The ECNs (Electronic Communication Networks) exist to bring together buyers and sellers when possible.



HADDIX

Pramod P asked:


Hellooo…,
I m currently persuing MBA (MMS FROM MUMBAI UNIVERCITY) doing a summer project on CENTRAL BANKS’ INTERVENTION IN FOREX MARKETS ITS IMPACT ON FOREX RATES. I have got very less info on the same.Hence, if possible, please help me. You may suggest me websites or Books on the same.
Thanks a lot in advance

EM

John Callingham asked:


With the unreliability of the stock market these days, more and more people are looking into Forex trading. Why, you ask? It’s really simple - because it’s easier to make money in Forex trading than in any other financial markets out there, and the risks involved are notably less.

If you are interested in beginner investing for Forex trading, you’re in the right place. The Internet is home to a number of websites dedicated to helping beginners like you make it in the foreign currency market. Almost every piece of information about anything and everything under the sun is readily accessible nowadays, thanks to the advancements in technology, and doing some research is the first step in your journey if you want to earn big bucks in the Forex market.

Instead of going out of your house and browsing through rows upon rows of shelves at the bookstore, just type in the right set of keywords onto the search engine and after a few seconds, voila! You have all the information you need for beginner investing for Forex trading. You won’t have to spend a dime, and you can easily sort out the authorities on the subject matter at hand from the wannabes. It is very important to filter information and trust only those that come from credible sources; otherwise, you’ll be working your way through the Forex market like a blind person.

As a beginner, it’s important that you invest in books. Beginner investing for Forex trading requires you to study the history of the Forex market and, more importantly, predictions for future trading strategies. You also have to learn how to read charts and master the foreign currency lingo in order to feel at ease, feel right at home whenever you’re trading. While you can find several e-books online, most of the reputable guides and manuals written by Forex market experts are published outside of cyberspace. The books you buy and the information they’ll give are priceless, so you can expect great returns for your little investment.

The most important thing in beginner investing for Forex trading is keeping yourself updated. Make it a point to read the newspaper everyday. Don’t just turn right away to the business section; the value of a particular currency rests on many factors, including politico-economic issues and natural disasters in the country of that currency. It’s best if you read every page of the paper. Moreover, the market landscape of Forex trading changes everyday, that’s why it’s vital that you make it second nature to keep yourself abreast of the changing market value of different currencies, especially the major ones, so you know what to buy and what to sell.

Finally, don’t forget to take down notes. While it is exciting, Forex trading is in truth a hit and miss thing. There’s no or little insider information and the values are constantly fluctuating, not fixed. Remember to keep a record of all your losses and your profits. This is the only way you can point out your mistake and avoid them in the future.

With a little help, you can be successful at beginner investing for Forex trading.



SALGADO

melgonz@sbcglobal.net asked:


I would like to learn how to perform correlated/hedge trades…such as the EUR/USD + USD/CHF. Can anyone recommend some books on the subject? Thanks.

QUEBEDEAUX

Kelly Price asked:


There are lots of forex trading systems online and all promise to make you a lot of money, some can but most don’t. This article is all about finding the best currency trading system for you…

Lets look at the points to consider in no particular order of importance, they ALL are!

1. Mechanical or Human Input

Some traders like a completely automated forex trading system, others like to have some manual input on the trading signals - the one you choose will simply depend on your trading personality.

2. Do You like Action or - are You More Patient?

If you are a patient trader, then a long term forex trading system will suit you. If you like short term trading, then you will be more attracted to swing trading - again this is simply personal preference.

3. Is the Track Record Realistic?

The first question you need to ask yourself is the track record real?

By this we mean has it been traded. 99% of forex trading systems we see on the net have not and simply make the track record up in hindsight and use this warning:

“CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.

The system may work - but most simulations fail and really you best off with a real time track record.

4. Can You Stand the Peak to Valley Drawdown?

A track record can make profits but it will have drawdown so assume that you join on the worst possible day and check the worst drawdown.

Can you stand it in terms of size and time to recovery?

Always assume your worst drawdown is ahead of you.

5. Do You Have Confidence in the Logic?

You will never have the discipline to apply any currency trading system unless you understand and have confidence in the logic. Keep in mind, any forex trading system has loses, so you need the discipline to ride them out.

Make sure you take the time to learn the logic and have confidence in it, as without the discipline to follow your trading system - you don’t have one!

The Myth and Reality

The above are basic questions you need to ask when considering buying any trading system.

There is a huge industry in forex robots and vendors promising you huge riches based upon a simulated track record but they normally always fail.

Be sensible and be realistic in terms of seeking out a trading system that’s right for you in terms of - your personality, your tolerance of risk, your objectives and your understanding.

Spending some time and keeping your feet on the ground, will enable you to find a forex trading system that’s just right for you and can lead you to currency trading success.



POLSON