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2010-05-14T23:13:38Z

Find the Right Broker

2009-12-08T20:07:27Z

By Steve Welker

Most traders find that it is necessary to utilize a broker when making transactions on the FOREX exchange. A broker is a middleman that handles the actual buying and selling of orders for traders. The broker may be an individual or a company, they will often also offer advise and suggestions for their clients but they only execute orders based on the decision of the trader. Brokers earn their profit either through fees or commissions.

In the case of a FOREX broker they must be associated with a large financial institution to have access to the necessary funds for margin trades. When looking for a broker in the U.S. you need to be sure that the broker is registered as a Futures Commission Merchant by the Commodity Futures Trading Commission. This will allow you to protect yourself from fraud and abusive trade practices.

To start trading in the FOREX market you must open an account with a broker. There are a large, even overwhelming, number of brokers available on the internet. To pick the right broker yourself you need to be prepared to spend some time doing some research. This will help you understand the different services available from various brokers as well as their fees and commission structures.

As with anything else there is no better way to find out the truth about a broker than to talk to someone who actually uses them. Talk to anyone you know that is involved in the FOREX market and find out which broker they use. Then ask them what they like or dislike about their broker and any problems they may have had in dealing with them.

One way to test an online broker is to contact their help desk and see how quickly they respond to your questions and how helpful the answers are. Be sure to keep in mind thought that just as it is with many other things with FOREX brokers you may find that the level of pre-sales help is significantly better than the level of help you receive after you sign up for your account.

While customer satisfaction and safety is of paramount importance they are just a couple of factors that you should pay attention to. Just as importantly is how fast the broker can execute a trade and what level of slippage you will experience with them. Any broker that is online should provide automatic execution and be able to describe their slippage policy. They should be able to provide you detailed information on how much slippage you can expect in both normal and fast moving markets.

Another vital factor is your costs. What is the brokers spread? Is this spread fixed or can it vary. If you are looking at a mini-account do they use the same spread or do they have a higher spread. Are there any other fees or hidden costs involved? Be sure to keep in mind that the cheapest broker may not be the best, the broker that has slightly higher spreads might provide extra services that more than compensate for higher costs.

Everyone needs a margin account to effectively trade in the FOREX exchange, be sure to get the details of the broker's margin accounts and fully understand them before opening an account. What are the margin requirements? What method does the broker use to calculate margins? Does the margin vary depending on the day, the currency involved or event the account type? Many brokers have different margin policies for mini-accounts.

To be successful at trading FOREX you need good trading software and you need to be comfortable with using it. Most brokers will offer free practice accounts that function just like a real account and use the same software. Sign up for several of these and thoroughly test the software paying close attention to the reliability and speed especially when the market is moving quickly.

Some other things to look into are minimum balance requirements, interest on balances, and what currencies can be traded. You should ask about lot sizes and irregular lots and be sure to see if the client accounts are insured and to what level.

Fibonacci Retracement trading-Take Advantage !

2009-12-08T20:02:04Z

By Tim Grimsley

Fibonacci, Actually named Leonardo of Pisa, was born in Pisa, Italy about 1175 A.D.. Today, he is recognized as the greatest European mathematian of the middle ages. Fibonacci is credited with introducing the Arabic-Hindu numeral system to Europe. He also introduced the decimal system. Both became the basis of mathematics we use today. Enough background for now.

Although Fibonacci covered an entire realm of mathematics, the main numbers used in trading are actually percentages. The percentages are 38.2%, 50%, and 61.8%. These areas are viewed as trend retracement points. The most commonly held theory is that a 38.2% retracement of a trend is a failed reversal and theoverall trend should continue. A retracement to the 61.8% mark signals that the retracement is the beginning of a new trend. The 50% level is used for different strategies if confirmed by several other signals

The use of Fibonacci numbers in trading has become increasingly popular in recent years. It does not take long when looking at charts to see several examples of Fibonacci tracements. On numerous occassions I have watched analysts making market predictions on T.V. shows. I will often check the charts about what they discussed. Some of the predictions for new price levels are dead on Fib. retracement numbers.

Fibonacci numbers, as with all technical indicators should not be used by themselves. They should be combined with other indicators to make a complete system to trade with. I do believe that Fibonacci numbers should be a part every traders list of indicators. They do seem to be extremely accurate, This could possibly a self fufilling prophecy. If enough people believe it, they will cause it to hold true.

In any case, if you do not currently use them, you may want to look into it.

Enjoy Trading and Enjoy Life

2009-12-07T23:43:20Z

By Tim Grimsley

I speak to traders that spend every waking hour focused on trading. While this may be fine for some it is not for me, I know this because I used to be that guy. I originally became interested in trading because I dreamed of being rich and having the time to do what ever I wanted. I have a compulsive nature to begin with and I hunger for knowledge. This combination led me to work constantly, to learn more about trading. I maintained a full time job and studied trading strategy at night, often until midnight only to get up the next day at 4:30 A.M. to go to work. Studying the markets were a 7 day a week thing for me. This went on for a couple of years.

From time to time I would personally meet other traders and met some through the net. Over time I noticed that some traders did not obsess over trading the way I did. Most did but a handful did not.I thought that one day if I worked hard enough I would be like them. Then one day I met a man that changed my thinking. Through our discussions about trading I realized that he started about the same time as myself. He did not have as much experience as I had and it was apparent that his knowledge of the markets was not as extensive as myself.

The curious thing was that he traded only 2 hours per day and did not work any other job. The rest of his time he played golf and spent time with his family. I questioned him in hope that he would share his secret trading formula with me. To my surprise he did not have a secret weapon for trading markets. Instead he had a secret weapon for life in general. ENJOY IT!! That day I realized that I had lost sight completely of my original goal which was to have more time. I had ran completely in the opposite direction. Instead of trading freeing from a job it had become more of a job than my actual job was. My percentage of winning trades was not where I wanted it to be and thought that I could study my way to a better percentage.

After talking with him I decided to take a break from trading and come back with a new perspective. When I again started to trade I only allowed myself to spend 2 hours per day on trading. I was much more relaxed and I traded less often. This turned out to be great, my win percentage went up because I was more selective in my trades and I was not stressed out about everything. Today I enjoy life much more and trading is what I thought that it could be.... Thanks Robert

Remember there is alot more to life than trading. Life is to short to spend every hour looking to make the next great market move. What if that next move doesn't occur in your lifetime, then what have you gained. Trading is wonderful and I do love it but I'm not going to sacrifice my life and the happiness of those I love for it. I have a life I fully intend to enjoy it.

Elliott Wave Theory – The Myth and Reality

2009-12-07T23:32:24Z

By Stephen Todd

Elliot wave theory enjoys massive popularity - being described as advanced technical analysis, by many brokers and publishers.

Elliot wave theory has a huge and devoted following - shame the theory has no basis of sound logic that can help you make money!

Let’s look at Elliott wave theory in more detail and then look at sensible market analysis.

The theory was named after Ralph Nelson Elliott, who concluded in his book “natures law” that the movement of financial markets could be predicted by observing, and identifying a repetitive pattern of waves.

Elliott’s Profound Observation

Elliott came to the stunning conclusion that all natural phenomena are cyclical - and this includes the financial markets. This is true, but we know that anyway - we know that at some time in our lives, we will feel rain when we venture outside, the question is when exactly?

So, markets are cyclical - big deal! What we want from an investment theory, is the probability of the event - i.e. when is it most likely to occur.

Elliott wave theory is an objective investment theory - but there isn't any objectivity in it at all!

It's all a subjective interpretation of peaks and troughs, in any time frame you like!

Does this sound a logical predictive theory to you?

The Theory

Based on rhythms found in nature, the theory suggests that the market moves up in a series of five waves and down in a series of three waves.

The difference between the Elliott wave principle and other cyclical theories is that the theory suggests no absolute time requirements for a cycle to complete - well that’s a lot of help!

The subjectivity is so great in Elliott wave, that like most theories, everything is explainable in hindsight - but the difficulty is actually predicting the future.

There are so many interpretations of the actual peaks and troughs in various time frames, that everyone will see them differently, this is hardly the basis of a predictive theory.

Elliott wave theory claims to be able to predict the market - but gives no objective way of doing it in practice.

Who uses Elliott Wave Theory?

1. Investors who want an easy way to make money, and are attracted to the mysticism of such tools as the Fibonacci number sequence, to predict market retracements.

2. Investors who believe in the false assumption that you can predict market behavior in advance - and want an easy way to make money.

How Markets Really Move

Market prices are a reflection of the following:

Supply and demand fundamentals + human psychology = price action

This looks simple, but is in reality, complicated equation - which is impossible to predict in advance.

Trading markets via technical analysis is all about putting the odds and probability in your favor, and no more than that. It is NOT a way of predicting the future.

Are there better theories than Elliott wave around, for making money from the markets? - A good exercise would be to poll the entire top performing fund managers in the world and see how many of them take the theory seriously.

Predictive and subjectivity don’t mix!

The Elliott wave theory is a predictive theory that leaves everything to subjective analysis.

If Elliott had worked out a predictive theory, why didn’t he give an objective way to make money from it? - Like most predictive theories it doesn’t work.

If all investors could predict the market in advance, we would all know what was going to happen - and there would actually be no market at all, as we would all know the market price in advance!

Elliott wave theory is supposed to be a predictive theory, but the only thing you can predict with it, is you will lose your money.

Author Bio:

Stephen Todd

web site promotion via keyword articles and web press releases

Electronic Currency Exchange: Trading Digots for a profitable living

2009-12-07T23:28:47Z

First of all, if you're just finding out about electronic currency exchange trading, then probably you're still asking "what in the world does this electronic currency business is", and most importantly, "how do I make money from it?"

Well, you are reading this at the right time, because electronic currency exchange is a business that is expanding and offering new ways to profit from it. This means that in the next months learning how to trade digots will prove to be more profitable than it is today.

But what does "digot" mean?

Digot is the value of a given currency when using the electronic currency exchange system. So if your account is in dollars, then a digot will stand for a dollar. If you are reading this, it means you are interested in making more money, and I must congratulate you, because electronic currency exchange is a fantastic vehicle to make money without much work required. This is why some people call this opportunity the anti-business.

If you like the old saying "the less you work, the more you make" then you will love the electronic currency exchange business. Let me explain how it works:

You get started with whatever amount of money seems reasonable to you. I got started with $200, but I've heard of people getting started trading digots with amounts ranging from $50 to $10,000 so it's entirely up to you and what you can afford. Keep in mind that the more you start with, the faster you will see profits, so it may be worth not buying that new PC to put in as much as you can from the start.

After you have the electronic currencies set up, every 24 hour period you will generate from 2 to 4 percent of your investment.

What makes this system so profitable, is that you have the option of reinvesting your profits, so that you gain interest of what you gained interests the day before AKA "Compounded interest" over your digots. It's very easy to see how your money can have the snowball effect and turn into a truly automatic cash machine.

When I was looking to get started, I started with an online course, so I had no learning curve. This is the path I recommend, but if you are short of money, you can also exchange your time and efforts and research online for how to trade ecurrencies.

Do You Know Your Currency Pairs?

2009-12-07T22:47:13Z

When I thought about some of the first things I learned before trading the Forex market, fundamental analysis came to mind. Fundamental analysis refers to factors that affect the price of a currency pair. It is important not only to perform technical analysis based on your charts and indicators, but to also be aware of the macroeconomic events that can affect a currency pair. What helped me in my forex education was learning each currency's characteristics. Whichever pair or pairs you choose to trade, knowing each of their characteristics is extremely valuable because it aids in the accuracy of any trade you perform.

Europe- Euro. This currency is rather new. It began trading in 1999; however the EURO/USD pair is the most traded. Because of this, the EURO/USD is very liquid. The euro is greatly affected by interest rates. If you are trading the EURO/USD pair, you must pay attention to the Euribor (Europe's three-month interest rate), to watch for any changes in investor reactions when trading the EURO/USD pair since the Usd and Euro rates affect each other. The EURO/USD is my personal favorite pair because of the many opportunities it gives for potential trades.

Japan- Japanese Yen. Japan is the largest economy in East Asia; therefore the yen is used as an alternate for the whole region's economy. If there is trouble in the surrounding countries, the yen may drop in value. The Bank of Japan is known for intervening in the forex market to defend the yen's value. Another factor affecting the yen is the overall strength of its banking sector.

United Kingdom- British Pound. This currency is important to watch because the U.K. is one of the largest economies in the world. The pound is affected by energy and oil prices. As they rise, the pound should strengthen.

Switzerland- Swiss Franc. The Swiss Franc is known as an investor’s safe haven in times of crisis and uncertainty. Since Switzerland's banks controls much of the world's wealth, any reports of bank mergers and/or poor earnings directly affect the value of the franc.

"The Commodity currencies" as they are called refer to the Canadian, Australian, and New Zealand dollars. Since commodities consist of the majority of Canada's exports, the currency will strength or weaken depending on these prices. Usually the Usd and Cad will normally trend in the same direction because most of Canada's exports are shipped to the U.S.

Australia- Australian Dollar. The Australian dollar is most connected to gold prices. The interest rate differential is monitored because it can guide the long-term trend.

New Zealand- New Zealand Dollar. The New Zealand dollar is linked to commodity prices. It is also closely related to the Australian dollar, meaning they can act as alternatives for each other.

Do You Have A Back Up Plan?

2009-12-07T22:38:58Z

By: Pat Jackson

I know a woman in her sixties. She worked for a company for a little more than a decade as an administration and office assistant for a staff of one hundred sales people, who loved her dearly. She always made sure all the faxes got to their desks; the stationery stock was full and each staff member had what he needed.

Beyond her job description, she was like a mother to all of them: making sure the toilets got cleaned, old food was removed from the fridge and decorating the entire floor which the department occupied. She worked hard and never complained. She was always smiling, friendly and polite.

She felt good about being a ‘mother’ to all the people who entered and left that department. She was comfortable with her position. No-one else could do the things she did. And she did them better than anyone else in the building.

One day, she went to work as usual. After doing her morning chores, she was invited to the office, where she was told her services were no longer needed. The company was undergoing certain cost-cutting measures in every department and unfortunately, her role would have to be sacrificed. She was then asked to leave the building as soon as possible. She was assured, however, that before having made the decision, every attempt had been made to find a position for her somewhere within the company.

She has financial obligations to fulfil and she still hasn’t saved enough for her retirement. She still has credit to pay off and she was saving for a trip overseas, something she never got around to doing in her younger years. She wanted to save up to establish a book-selling business. Suddenly, she would have to re-evaluate her plans. Losing a job and nearing retirement age, she will have to relinquish some of the things she had dreamt for herself.

I am sure you have heard hundreds of similar stories like these. Just five months before writing this article, I had already read about companies cutting costs by laying off jobs. Their main reason is to remain competitive, so they would not have to raise the prices they charge to their customers. Companies are outsourcing jobs overseas because the labour costs in other countries are relatively cheap compared to the local currency and sometimes because of significant skills or technological advantages. Other businesses lessen staff when sales drop and they can no longer sustain to pay the same number of people they have on their payroll. No organisation – not even a big, established business – is immune from the need to become leaner in an ever-increasingly competitive market environment.

In the past, most people believed the companies or the governments – whom they work for – could guarantee them a job for life. Nowadays, I think more and more people are becoming increasingly aware that expecting to have a job-for-life is unrealistic. It is a dire predicament to be working everyday, taking care of someone else’s business and realising that at the end of one’s career, years of service do not guarantee one’s well-being. Because of this, I believe that people are now looking to improve their chances of having enough funds to meet their needs and wants after retirement.

I think there is a dawning awareness that the ultimate responsibility for one’s own well-being lies within each individual. People are beginning to understand that their boss or the company they work for does not have an obligation nor the ability to ensure that they are taken care of when they finish working for them.

According to an article written by John Roskam*, based on a forthcoming Institute of Public Affairs (IPA) Backgrounder on self-employment and the self-reliant society, the trend to self-employment will speed up in coming decades. Five reasons explain this change:

1. Our societies will continue to develop knowledge-intensive and service industries.
2. Jobs of the future need more education; however, better educated workers might opt to work for themselves instead.
3. Older workers are more comfortable with being self-employed than the younger workers, which might indicate individuals would prefer to work for themselves as they grow older.
4. Individuals want more control and flexibility over their working arrangements and self-employment allows for this.
5. Individuals are more willing to assume responsibility for the decisions that affect their lives and their families.

In addition to this trend, more and more people are now seeking to gain greater control over their financial assets.

What we can all learn from this article is the idea that we do not have to rely on our employers to be there for us when we desperately need them to pay us our periodic paycheques at the end of our working days. There are alternatives and, while we still can, I believe we owe it to ourselves and our families to have a back-up plan and look at every single opportunity available. The question for you is this: Do you have a back-up plan?
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Do Not Lose Your Shirt With a Margin Account

2009-12-07T22:36:41Z

By: harwich

The key to the FOREX market for the average investor is the margin. Without margin trading currency trading would be beyond most investors. I will explain what the margin is and how it works.
When you have a margin account you are able to control large amounts of currency with a relatively small cash deposit. When you have a margin account with a broker you are in effect borrowing money from the broker to control a larger lot of currency. Currency is normally sold in lots with a value of $100,000. A common term used when discussing margin accounts is leverage. Leverage is how much you can control with a certain amount of money. The leverage is usually displayed as a ration such as 1:100. That would allow you to control currency worth 100 times the amount of money you have invested.
To better explain this in a FOREX exchange with a 1% margin account you could control $100,000 worth of a currency while only investing $1000. Margin accounts can allow you to greatly increase your profit; they also allow you to increase your risk. With a margin account it is possible for a trader to lose more than their initial investment. With a little prudence though losses can be minimized. Most brokers will terminate a trade before the losses exceed the original deposit.

Benefits
As discussed before a margin account allows you to buy more with the money you have which can greatly increase your profit on successful trades. By controlling a $100,000 worth of currency for only $1000 the potential gain is greater. When dealing with large lots of currency even small changes can produce significant results.
Currency on the FOREX market is traded in far more precise units than actual cash is. As an example the American dollar is traded down to four decimal points. So when you were to quote the dollar against another currency you will see a price like $1.7834 instead of $1.78. A PIP is the smallest unit when trading currencies, when dealing with $100,000 lots then each pip is worth about $10.
If the price of the American dollar changes from $1.7834 to $1.7934, you have a net difference of 100 pips. If you have a lot of $100,000 then that 100 pips will translate to $1000 where as if you were not using the margin your original $1000 would only show a profit of $10. Hardly what most would consider a highly profitable trade?
In short the primary benefit of using a margin account is that it can greatly increase the profit margin of a trade.

Risks
Since there is such a significant increase in profit potential when using a margin account it only stands to reason that there is also an increase. In fact it is quite possible to have your entire margin account wiped out fairly quickly. When using a 1% margin account a shift in the currency of a single penny will cost you $1000.
The FOREX exchange has many safety features to help you reduce the risk of this happening. One example is a stop loss order. A stop loss order will automatically close out your position in a currency if the price crosses the point you have set. This allows you to limit your losses while still having the opportunity to realize a profit.
Another risk that many people overlook is that if the price nears the point where your losses are close to being equal to the value of your margin account your broker may close out your position. If you were trying to rid out a temporary downturn that you expect to turn around soon you could find that your broker has closed it causing you to lose your entire balance and have no option to make a profit if the price moves up again.

This is a basic introduction to margin accounts and how they work, visit the website listed below to learn more about the FOREX market.

About The Author, harwich

Steve WelkerOwner & Operator of http://www.forex-tradingonline.com

Currency Trading Tips For Beginners

2009-12-07T21:38:21Z

by Mark Freeman

Currency trading is a platform where individuals speculate on the exchange rate between two currencies. Traders buy and sell currencies hoping to realize a profit. In order to succeed in currency trading you will need a source of accurate and timely information. You'll need to familiarize yourself with a whole new language.

When you start currency trading you'll learn what a market trend is and how it will affect your trading. Trends move up, down and sideways. There are also trend classifications within market trends. These classifications are intermediate, short-term and long-term trend. You'll learn how to look at and understand basic trend lines, which is the most valuable trading. You'll learn about channel lines and support levels.

When you enter currency trading you'll be able to make sales online 24 hours a day, 7 days a week, unlike the Stock Market. Many online brokers offer commission free trading and you'll want to make sure that you have instant execution of your market orders.

A new addition to many currency trading online business sites is the ability to set up a free demo account. This is a good way to get practice about trading and learn about live quotes, charts and streaming news before you start investing with real money.

When you set up your demo account it's a good time to test the software that the company offers. If you don't like the software program, contact the company and see how similar it is to the software program you would get if you signed a contract with them. If you don't like the software program try another broker. Also, decide if you want web based or client based software. Web based software is housed on your brokers website, you won't have to install any software onto your computer. A web based software program will allow you to log in from any computer that has an internet connection. Client based software is loaded onto your computer, and can only be accessed from that computer, potentially limiting your usage.

Another thing you'll want to check before choosing an online broker is how quickly they respond to your need for help. Seeing how quickly they respond to your questions could be key in how they respond to customer needs. If you don't get a speedy and accurate reply you may not want to trust them with your business.

You'll need to have high speed internet connection in order to succeed in currency trading online. The currency trading market is a fast moving one and dial up internet access will not work well for this. Another consideration could be the location of the servers used by your broker. If your broker's servers are located quite a distance from you, say in another country, this could potentially slow down your transmissions.

Take you time and investigate online brokers. Talk with friends and family about their dealings with online brokers. Take time and do a thorough evaluation of your options before you trust anyone with your money.