GET RICH WITH FOREX

Sunday, August 9, 2009

HOW TO START FOREX?


eToro


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but before you do any mistake read the article below to enlarge your knowledge about forex and to not loose your money from the first day ,good luck!!!

INTRODUCTION

trading forex on internet become one of the most lucratif business on the planet,it's the worldest largest finance market with more than 5 trillions dollars traded daily.
every one can start trading forex with a small investement th problem with start to trading n the forex is getting the information and training ,people are loosing hundreds of dollars and somtimes thousends to learn forex but here i'm going to show you all the tricks that you can use to learn to trade like a pro you don't need to pay to learn online everything is free

How does Forex work? Learn Forex!

FOREX works merely . Exchanging foreign currency is the buying of one currency while selling another at the exact same time. It is done in pairs. Four major currency pairs are usually used for investment purposes. They are the Euro against the US dollar, the US dollar against the Japanese yen, the British pound against the US dollar, and the US dollar against the Swiss franc. The way it works is, with the ever changing value of each nations currency constantly changing, one nations currency is never precisely equal to another. FOREX traders use this to turn a profit.

For example, if the 1 Japanese Yen is worth approximately $1.48 U.S. and you believe that the Yen will increase in value in comparison to the U.S. dollar, you would sell your dollar and purchase the Yen. Once the value of the Yen increases, you would sell it back to purchase the U.S. dollar.

E.X. 1: The Yen is currently valued at $1.48 USD. You sell $14,800 to buy 10,000 Yen. The Yen proceeds to increase in value. After a short amount of time, your Yen is valued at $1.62 USD. You sell your 10,000 and re-purchase the USD. Your initial investment of $14,800 has turned into $16,200, almost a 10% profit.

One thing that makes FOREX so much more exciting is the large amount of margin that is allowed by most brokerages. Margin is a system used in FOREX that allows an individual to increase his purchasing power greatly. An investment on $1000 of your own money will offer you $100,000 worth of purchasing power at a 100:1 ratio that most brokerages offer. This allows you to purchase and sell in much greater amounts than would otherwise be possible.

How to Start FOREX Trading ?

Welcome to the world of the Foreign Exchange market. FOREX is a system in which money is converted back and forth at different values in order to accumulate a profit. Foreign currency trading, while somewhat complex, can be easy to understand if taken one step at a time.

First off, it is very important to know just what you are being a part of. The Foreign Exchange Market is the biggest market in the world, with an average daily turnover of $1.2 TRILLION dollars. That is over 30 times larger than the combined value of ALL U.S. equity markets. With numbers so large, it is easy to understand that the possibility of profit is quite large.

Very briefly, trading cannot be attempted without a brokerage firm. First thing on the list of things to do to begin trading "FX" is to sign up with a broker. ForexTips.com, easy-forex.com and TradeJuice.com all have reliable, easy, cheap software that can be used. Sign up for an account, fund it with a credit card, cash, check or money order, and get ready to go!

Once you are all signed up and funded, you are ready to trade.

Where to start Forex trading ?

FOREX can be EXTREMELY profitable if you come at it correctly. Here are some of the important Do's and Don'ts of FOREX trading.

Do make sure to keep a constant eye on your margin. If your available margin drops too low, your broker will make a margin call. If you don't deposit money within 24 hours, they will sell your currency for the current market value, and you can take substantial losses.

Don't :
Don't EVER invest more money than you can afford to lose. All over the internet are horror stories of people investing their life savings into programs. The best advice is to consider your income and your plans, and make sure that necessities are put first. Substantial losses are sometimes hard to recover.

Do :
Do utilize stop/loss purchases. These decrease the likelihood of extreme losses. If used correctly, these techniques can actually increase your earnings because it will sell if it gets too high, but continue accumulating as it increases.

Don't :
Don't make too many transactions at a time if you plan on carefully watching each currencies movement. Multiple transactions cause problems when timing is as important as it is. Keep your purchases to a maximum of 2-3 at a time. This makes it much easier to buy and sell quickly.
Utilizing these simple do's and don'ts can save you from a potential lifetime of problems. Just make sure to take care with your spending and use common sense when dealing with money.

FOREX vs. Futures and Commodities Trading

Before understanding the differences in trading futures and commodities, it is important to know exactly what they are. Commodities are all natural things that are planted or found in nature. The list of commodities includes:

Light crude oil
Natural Gas
Unleaded Gas
Gold
Silver
Aluminum
Copper
Platinum
Coffee
Cocoa
Wheat
Soybeans

Firstly, learning to trade commodities is an arduous task. If you were to search online for sites or e-books which can teach you, it is nearly impossible to find without having to pay a large upfront fee. With FOREX, this is not a problem. There are many places which not only provide free information, many brokerages actually offer 'demo' accounts, with which a trader can use fake money to trade using real-time information. This is perfect for people who would like to learn FOREX without putting any of their money at risk. This is generally not an option with commodities.

Next, there is the question of the profit margin. In this area, commodities are the better of the two. However, this victory is not without its inherent risks. With FOREX, it is very simple to buy and sell without taking very large losses in the event of any kind of a catastrophe. This is not the case with commodities. It is extremely easy to go bust very quickly in the event of a natural disaster or other problems of that nature. For example, if you invest a large amount of money in wheat and the years crop is extremely lower than expected due to drought or natural disaster, it can easily become a disaster for your wallet. This is eclipsed however by the extremely large profit that can be made trading commodities. In an extremely good year, it is actually possible to make up to 500% return on your money.

Clearly, both options have their positive and negative aspects. As always, it is the traders job to do their homework and to fully understand the risks involved with these types of markets. The money is there to be made with just a little bit of research and care.

FOREX vs. Stock Trading

There are a few major differences between Trading Stocks and FOREX Trading.
Firstly, one of the major points of FOREX is the availability of margin. In FOREX trading, margin is usually offered at a 100:1 ration, meaning if you deposit $1,000 your potential spending capacity is $100,000. This greatly increases the profit margin as well as the users buying power. In stock trading, margin is offered usually at a 2:1 ratio.

Secondly, the width of the bid/ask spread and the transaction costs are very important. FOREX spreads are normally less than 5 pips, where each pip is worth $0.0005 cents. That brings the total cost per FOREX transaction to less than a penny. This is less than 10% of a stock transaction, which could be up to a .125 spread. Then, the transaction fees for FOREX are nearly nonexistent, where in stock trading, each trade can cost anywhere from a few dollars to $100 or more when you use a full service broker. Obviously, the transaction and bid/ask spread can accumulate into a large amount of money fairly quickly.

Finally, issues of liquidity. Because of the fact that the FOREX market is nearly 50 times larger than that of the US stock market, there is always a demand for any currency that you may be willing to buy or sell. This makes sure that prices are stable and that a trader can always be offered the fair market price. This is not the case in stock trading, where any big transaction can cause massive fluctuations in the value of a company and its stock.

Make Money with Forex trading

Making money with FOREX only takes a little bit of common sense and practicality. While there is no sure strategy to constantly pull a profit, there are 4 strong strategies that should always be considered while trading.

The state of the nations whose currency you are buying/selling. If the economy that uses a currency that you are actively buying or selling has an economic crisis, a political coup or other political problems, you can bet that the value of that nations dollar will fall, even if it is only due to the other FOREX traders who are releasing their currency as a pre-emptive strike to others who will all do the same.

Buy low, sell high. This might seem overwhelmingly obvious, but it is strange how many people seem to forget that the market runs in patterns. When a currency suddenly drops dramatically, for the most part, the currency will eventually work its way back up in value. Of course, since nothing is 100% sure, it is always best to place stop/loss orders to ensure that the value of your currency doesn't drop low enough to cause a margin call.

The FOREX market is a 24 hour market. Take advantage of this. There are always trades and purchases to be made, and there are always active currencies. Remember, just because it is 3am in California doesn't mean it is 3am around the world. There is a famous saying that, "It is always noon somewhere."

The most important FOREX tip money can buy is this. Always, always, always keep an eye on your margin. Just because you can buy $100k worth of a currency does not mean you are not liable for the money. If your margin is too deep and your currency falls below a certain point, your broker will make a margin call. You will then have a certain amount of time to deposit more money to cover your share of the margin. If you are unable to make the margin call, the broker will sell your currency, most often times at a loss to you, and they will take their money back from the sale price of your currency. Obviously, this is something that must be cared for extremely well.