Perhaps the most positive feature abut this market is that there would always be a global demand for currency exchange and the market can seriously impact the global economy. As long as there is trading between two countries, Forex market would continue to exist and grow. And international trading can only flourish if there is technological development and enhancement of communication routes. For example Germany can trade with the USA and get paid in Euros of the same value as US dollars.
This perhaps explains how Forex trading risks can be a rewarding and winning experience every single day of the year. The currency fluctuations have made millions of people richer by millions. And the best news is that this market is now open to people like you and me. All we need is the internet and the willingness to learn the art of making money.

There are 3 popular misconceptions or wrong notions about Forex day trading, which are familiar to anyone who has spent some time in this business. Beginners however give a lot of credence to these ideas and this leads them to the path of assured failure.
So how do you bypass these common pitfalls in Forex trading? Let us first take a brief look at the 3 ‘avoidable’ areas in Forex trading.
Misconception number one is that this trade generates regular income and profits. Now use your common sense here. Can anything be able to generate regular income and also profits which is so unpredictable and alterable as the Forex market? The market is volatile and changing all the time. Even after using all your best Forex strategies it is very common to find that the assured profit, in a moment’s notice can turn into a blockbuster failure! So the next time some one tells you that he is making x% profits every month, look for the nearest exit in the room.
Ability for price prediction.This is misconception number two. Imagine this. Is it humanly possible to foresee future? You can come close to the results but this does not mean that you are 100% accurate all the time. If only there was a theory that was in place which predicted the future trend and prices accurately all the time, after taking in to account interest rates cuts, falls and rises, bank policies, change of authority diktat, and more. Impossible!
The third misconception is that this trade allows amassing huge profits with minimum exposure. There are some crazy advertisements of systems, which assure you 100% profits with only 1% drawdown. Check the profit and loss account of individuals who have used such systems and you know the truth.
The truth of the mater is that 95% of traders lose their money if they believed even one of the misconceptions cited above. There are three essential lessons to be drawn from the Forex market and they are (1) think of long term profits (2) risks are part of every day life in this trade (3) you have to play against odds with least amount of certainties. Trust the old saying: no risk, no gain.
Tags: Forex trading, lies
Forex demos are offered by companies that are selling forex trading softwaresMarch 19th, 2009 by Forex Admin 1 Comment Filed in Forex basics, Forex demos
Practice makes it perfect. Due to the numerous risks that you’re getting yourself into when you join the forex trader, practice became some sort of a pre-requisite for newbie forex traders. Before, a lot of people are really scared to try their luck in the forex market because of how intricate and complicated the market is. Now, due to the existence of forex demo, a lot of people are becoming more confident in trying out their luck in market trading.
A demo is a virtual forex account wherein you could put your theories and trading styles into practice. It’s a practice account where you use paper money instead of real money. In a forex demo, you get to be exposed to different investment concepts like charts, opinions, fundamental analysis, and technical analysis. You can visit online forums where you could read the opinions of other traders especially the experienced ones. You can also put your strategies into test by doing your trading activities and see their effects. In this way, you can see how effective your strategies and you can try new ideas. However, in a demo your trading transactions get recorded in a different realm; it doesn’t get recorded into the actual market since there’s no real money involved.
Normally, demos are offered by companies that are selling online forex trading softwares or platforms. They let you try the demo for 30-days for free. One of the reasons why companies offer forex demos is to encourage individuals to use their software when they start trading in the real live forex market. The main goal of fore-demos is to make an individual more confident not only with the forex market trading business but also with the trading platform that is being offered by the company so that he could eventually move up to trying the real live forex trading market using the same trading platform.

With communication technology becoming more and more advanced, it is not uncommon to find Forex traders doing their trading business sitting in the comfort of their homes. In fact, all that you need is a high speed internet connection and a reliable computer facility. The number of casual and full time Forex brokers is on the rise not because there is an internet explosion but also because of the gaining popularity of some commodity trades.
This article would equip you with the knowledge of the Forex market as well as how to find a worthy online Forex broker, in case you too want to become a broker yourself. Usually Forex traders allow anyone the facility to trade on Forex on phone, online as well as from your mobile! As Forex day trading is increasingly getting popular, so are the numbers of online Forex brokers. It is not uncommon to find people taking up commodity trading as their second or even third career option. The increasing demand is counteracted by brokerage firms as well as financial institutions with similar enthusiasm. This is a good example of modern technological marvel, at work. There are some guidelines before you choose an online broker or online firm to do Forex trading.

Forex or Foreign Exchange is nothing but a market where corporations, nations and retail investors exchange their money to make a profit. Though the smallest increment in the Forex, the pip, has only a value of 0.0001 of a dollar in most cases, its value quickly adds up to huge profits or losses, due to the fact that trillions of dollars are exchanged in the Forex market which is open 24 hours a day, 6 days a week. Added to that, Forex is one of the most exciting, highly volatile and attractive investment markets in the world.
To explain the exchange of currencies let’s take the following example. If an organisation in the U.S. wants to send money to their office in Europe, they have to convert their U.S dollars into Euros, as one U.S. dollar does not have the same value as a Euro. In order to convert the money, the organisation has to buy Euros with their U.S. dollars through the Forex market. The transaction has to be made in pairs, which means that the organisation has to buy the USD/EUR currency pair to send money to its office in Europe. The converted value of the money depends on the current value of the currency pair in the market. If the USD/EUR has a current value of 1.2500USD, then the organisation will obtain 80,000 Euros if it converts $100,000 at the Forex.
Now coming to the pips, one movement of the above transaction will equal $10 (0.0001 x $100,000). If a trader moves in and out of a position quickly, it is possible for him to make a profit even if the price fluctuates by a few pips. Although it is possible to make a substantial profit in the transactions, making an equal loss is also a possibility.
Because of the huge amounts invested and the strict rules and regulations of the Forex, trading in this market was restricted until recently to corporate giants, central banks and big investment firms. But now, due to advances in technology and relaxation of rules, Forex market is open to retail investors also. An investor can now secure a position with just 1/100th of the total amount traded. On the other hand the probability of losing the investment is high due to the highly volatile nature of the market.
However, with careful analysis and using different strategies, charts and trading systems, it is possible for a trader to determine when to enter and exit a position to make a profit. Though it is possible to make unlimited profits, because of the unpredictability of the Forex market, stops are placed on orders to prevent losses. Even if you are a seasoned trader and use a proven system, it is always wise to place stops on each and every order, as the market can swing unexpectedly sweeping away your investment in the blink of an eye.
The non-stop excitement and the potential to make unlimited profits are the main reasons for the popularity of the Forex. On the other hand, Forex is a high risk market where millions are made and lost every day. If you are a beginner, with hopes to make your millions, it is better to start with a dummy account to gain enough knowledge before entering the real, highly volatile but extremely profitable Forex market. Forex or Foreign Exchange is nothing but a market where corporations, nations and retail investors exchange their money to make a profit. Though the smallest increment in the Forex, the pip, has only a value of 0.0001 of a dollar in most cases, its value quickly adds up to huge profits or losses, due to the fact that trillions of dollars are exchanged in the Forex market which is open 24 hours a day, 6 days a week. Added to that, Forex is one of the most exciting, highly volatile and attractive investment markets in the world.
To explain the exchange of currencies let’s take the following example. If an organisation in the U.S. wants to send money to their office in Europe, they have to convert their U.S dollars into Euros, as one U.S. dollar does not have the same value as a Euro. In order to convert the money, the organisation has to buy Euros with their U.S. dollars through the Forex market. The transaction has to be made in pairs, which means that the organisation has to buy the USD/EUR currency pair to send money to its office in Europe. The converted value of the money depends on the current value of the currency pair in the market. If the USD/EUR has a current value of 1.2500USD, then the organisation will obtain 80,000 Euros if it converts $100,000 at the Forex.
Now coming to the pips, one movement of the above transaction will equal $10 (0.0001 x $100,000). If a trader moves in and out of a position quickly, it is possible for him to make a profit even if the price fluctuates by a few pips. Although it is possible to make a substantial profit in the transactions, making an equal loss is also a possibility.
Because of the huge amounts invested and the strict rules and regulations of the Forex, trading in this market was restricted until recently to corporate giants, central banks and big investment firms. But now, due to advances in technology and relaxation of rules, Forex market is open to retail investors also. An investor can now secure a position with just 1/100th of the total amount traded. On the other hand the probability of losing the investment is high due to the highly volatile nature of the market.
However, with careful analysis and using different strategies, charts and trading systems, it is possible for a trader to determine when to enter and exit a position to make a profit. Though it is possible to make unlimited profits, because of the unpredictability of the Forex market, stops are placed on orders to prevent losses. Even if you are a seasoned trader and use a proven system, it is always wise to place stops on each and every order, as the market can swing unexpectedly sweeping away your investment in the blink of an eye.
The non-stop excitement and the potential to make unlimited profits are the main reasons for the popularity of the Forex. On the other hand, Forex is a high risk market where millions are made and lost every day. If you are a beginner, with hopes to make your millions, it is better to start with a dummy account to gain enough knowledge before entering the real, highly volatile but extremely profitable Forex market.

Interest rate risk: The forex risk that a trader faces in his business, caused by price fluctuations in the forward spreads, coupled with mismatches in the forwarded amount as well as gaps in maturity levels during transactions, is called interest rate risk and is similar to forex credit risk. This type of risk is directly related to currency switches, forward outright, futures and options. Traders attempt to reduce this type of risk by setting a limit to the total volume of mismatches. One of the common ways is to divide the mismatches depending on their maturity dates in two categories: up to six months and over six months. All transactions in this market are computerized including the dates of delivery, gains or losses. For more accurate forecasting of market trend and its subsequent impact on outstanding gaps, it is imperative to have knowledge of analyzing the interest rate scenario on a daily basis.

In any business, especially forex trading, you have an equal probability to lose as to win. Losses are unavoidable as nobody can predict the future. There are only three possibilities in trading, a win, a loss or a break-even. Once a trader has the misfortune to run into a series of losses it triggers a destructive behaviour on his part to get away from the misery of his situation. A simple forex trading secret says that the destructive behaviour starts when one indulges in activities that may seem harmless in the beginning. On excessive use, the activities become uncontrollable which puts your physical and mental health at risk. Smoking, drinking and indulging in other harmful activities are a few examples. Though these activities seem to help you with your situation, they only serve to cover up your problem and does nothing to solve it.
Sadly this is not a good approach to your problem with your forex trading account. To get rid of your misery, the first step is to acknowledge your destructive behaviour and take steps to put a stop to it. Instead of ruining your health and being forced to take action when the situation gets impossible, it is better and easier to put a stop to your destructive actions as soon as possible. The only way to solve your problem is to face it. Be honest with yourself and analyze the reasons for your failure. You cannot succeed without hard work, dedication and determination. Review your steps to find out where and what you have done wrong. You have to review both your system and yourself. Minimize your risk to make things easier for you here is a checklist to review yourself and your system.
Checklist for your system:• Did you check your system or software thoroughly before trading?• Did you use an out-of-sample data to check your system?• Did you check your system code?• Where you over-enthusiastic and over-optimized your system?• Did you start with a small initial investment before going for higher transactions?• Are you aware of the limitations of our system?• Do you even have a system to help you in trade?• If you do not have a system, how do you know that your strategy will be profitable?

Now, as laid out by the grid system, one should check the status of the cash for any movement in the forex market. To accomplish this, one should re-enter the market and conduct a buy and sell transaction. At this point, let’s make an assumption that the market price is back to 100. This makes the second sell positive by 100 and similarly the second buy has a negative 100. As said by the rules, one should cash in the sell and increase the account by another 100, which makes a total profit of 200 at this point. The first sell made which has remained active will have moved from the level of 200, from a negative 100 to a positive 100, at this point where it is breaking even.
Now if you add all the four transactions made above, you will be surprised to see a gain. In the first transaction, we cashed in the buy for a +100, the second transaction we cashed in the sell for +100, at which point the first sell is breaking even and the second buy was a -100. This makes up to an overall profit of 100. You can now liquidate all of the transactions and make a decent profit. This is just one market strategy that can be applied to turn the ‘buy and sell simultaneously’ action into profits. There are numerous other strategies that can be applied to such scenarios to make substantial profits.
Tags: forex transactionsNow, as laid out by the grid system, one should check the status of the cash for any movement in the forex market. To accomplish this, one should re-enter the market and conduct a buy and sell transaction. At this point, let’s make an assumption that the market price is back to 100. This makes the second sell positive by 100 and similarly the second buy has a negative 100. As said by the rules, one should cash in the sell and increase the account by another 100, which makes a total profit of 200 at this point. The first sell made which has remained active will have moved from the level of 200, from a negative 100 to a positive 100, at this point where it is breaking even.
Now if you add all the four transactions made above, you will be surprised to see a gain. In the first transaction, we cashed in the buy for a +100, the second transaction we cashed in the sell for +100, at which point the first sell is breaking even and the second buy was a -100. This makes up to an overall profit of 100. You can now liquidate all of the transactions and make a decent profit. This is just one market strategy that can be applied to turn the ‘buy and sell simultaneously’ action into profits. There are numerous other strategies that can be applied to such scenarios to make substantial profits.
Tags: forex transactions