1. Find a broker that offers a high amount of leverage for an account of the size that you plan on opening. To profit from small fluctuations in the Forex market, you have to use a large amount of leverage. For example, some brokers offer leverage as high as 500:1. This will give you the greatest profits when the market moves only a small amount in your favor. You could work with a broker that offers 200:1, 100:1 or 50:1 leverage and potentially still be profitable with this type of trading strategy.
2. Find a broker that allows scalping as a trading strategy on their platform. Some brokers do not allow you to open and close a trade within a short period of time. You might have to leave your trades open for at least five minutes or longer. If you plan on being profitable with scalping, you need to find a broker that has no restrictions on trading time limits. This way, you can open a trade and close it out at any time that the Forex market moves in your favor.
3. Choose currency pairs that tend to range back and forth frequently. Some currency pairs are better than others when it comes to scalping strategies. You do not want to choose a currency pair that trends frequently.
4. Trade during the best times for scalping for your particular currency pair. For example, you might want to trade when volume in the market is low and not much movement is taking place. At the end of the United States trading session is a popular time to scalp, as there is not a lot of traders in the market for a few hours.
5. Analyze the market and place a trade in the direction that you believe the price will go. If you think the market will move up in the short term, place a 'buy' trade. If you think the market will go down in the near future, place a 'sell' trade. Set take profit and stop-loss levels on your trade. Once the market moves to that threshold, your trade will close out. You can also avoid setting a take profit level and simply close out the trade manually when the market has provided you with enough profit.
Thursday, January 29, 2015
How to Calculate Pips on FOREX Commissions
1. Learn how forex prices work. Currencies trade in pairs. The exchange rate tells you how much of one currency is required to buy one unit of the other. For example, if the euro and US dollar are quoted at EUR/USD = 1.2500, you need $1.2500 to buy one euro. The quote is to four decimal places because the pip for the US dollar is $0.0001 (1/100 cent). Forex brokers set their fees in terms of pips.
2. Look at the exchange rate quoted for a currency pair. You will see two prices listed. The bid is the price the broker will pay you for a currency and the ask is the price at which the broker will sell you the currency. Note that the ask is always a few pips higher than the bid.
3. Subtract the bid price from the ask price to find the spread. The forex broker keeps the spread as his fee/commission. For example, suppose you place an order using U.S. dollars to buy euros. If the ask price is $1.2500 and the bid is $1.2496, the difference of four pips is the broker's share.
4. Multiply the spread by the number of units of currency bought (or sold). A standard 'lot' of US dollars is $100,000. At EUR/USD = 1.2500 one lot equals 80,000 euros. If the spread is four pips (from Step 3), multiply 80,000 times $0.0004 to find the spread the forex broker keeps (in this example it works out to $32).
2. Look at the exchange rate quoted for a currency pair. You will see two prices listed. The bid is the price the broker will pay you for a currency and the ask is the price at which the broker will sell you the currency. Note that the ask is always a few pips higher than the bid.
3. Subtract the bid price from the ask price to find the spread. The forex broker keeps the spread as his fee/commission. For example, suppose you place an order using U.S. dollars to buy euros. If the ask price is $1.2500 and the bid is $1.2496, the difference of four pips is the broker's share.
4. Multiply the spread by the number of units of currency bought (or sold). A standard 'lot' of US dollars is $100,000. At EUR/USD = 1.2500 one lot equals 80,000 euros. If the spread is four pips (from Step 3), multiply 80,000 times $0.0004 to find the spread the forex broker keeps (in this example it works out to $32).
Wednesday, January 28, 2015
How to Trade the Asian Opening With FOREX
1. Determine the local time in relation to GMT. Since Forex is a 24-hour market, you need to find the exact local time when certain events are due.
2. Access a Forex news calendar to find news events due while the Asian market is closed.
3. Gather news releases, reports and market analysis of important news events. News events are usually categorized into groups by importance. Forex calendars provide an indicator of importance for news events.
4. Select news that's more likely to affect Asian currencies such as JPY. AUD and NZD are also preferable, since Sydney and Tokyo are open simultaneously, with only a two-hour difference in opening times.
5. Carry out a fundamental analysis based on the news events, reports and results. Outcome of this exercise should provide buy or sell signals for currencies JPY, AUD or NZD paired with the major currency of the country that releases the news. For example, if the news event takes place in the U.S., then the instruments in focus would be USDJPY, AUDUSD and NZDUSD.
Trade the Asian Open
1. Determine the Tokyo open in local time. Tokyo open is at 00:00 hours GMT.
2. Place orders according to the news analysis and reports. If the trading platform allows pending orders, use buy-stop or sell-stop orders.
3. Use one-hour, four-hour or one-day time frames to trade, as smaller time frames may be too noisy at market openings.
2. Access a Forex news calendar to find news events due while the Asian market is closed.
3. Gather news releases, reports and market analysis of important news events. News events are usually categorized into groups by importance. Forex calendars provide an indicator of importance for news events.
4. Select news that's more likely to affect Asian currencies such as JPY. AUD and NZD are also preferable, since Sydney and Tokyo are open simultaneously, with only a two-hour difference in opening times.
5. Carry out a fundamental analysis based on the news events, reports and results. Outcome of this exercise should provide buy or sell signals for currencies JPY, AUD or NZD paired with the major currency of the country that releases the news. For example, if the news event takes place in the U.S., then the instruments in focus would be USDJPY, AUDUSD and NZDUSD.
Trade the Asian Open
1. Determine the Tokyo open in local time. Tokyo open is at 00:00 hours GMT.
2. Place orders according to the news analysis and reports. If the trading platform allows pending orders, use buy-stop or sell-stop orders.
3. Use one-hour, four-hour or one-day time frames to trade, as smaller time frames may be too noisy at market openings.
Monday, January 26, 2015
How to Understand FOREX Pips (7 Steps)
1.
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The GBP/USD exchange rate is the 4th most traded currency pair.
Take the sterling dollar exchange rate GBP/USD 1.3035-1.3037. The rate is quoted to four decimal places with the final decimal place being 1/100th of 1 percent. The smallest change to a rate is one pip or one basis point. The only exception to this rule is Japanese Yen which is quoted to only 2 decimal places (USD/JPY 98.40).
2. Calculate what a one pip change in the GBP/USD rate of 1.3050 would be in dollars if you bought GBP 1,000,000. As a pip is 1/100th of 1 percent and there are 1.3050 dollars to every one sterling pound, a one pip change is 1,000,00x0.0001=100 dollars.
3. Calculate the value of the loss or gain in dollars if the GBP/USD rate moved to 1.3055. In step 2 the GBP/USD rate was 1.3050 dollars for every pound. Now there are 1.3055 dollars for every pound. More dollar pips per pound means the pound has appreciated in value against the dollar. So 1,000,000x0.0001x5=500 dollars. If you sold GBP1,000,000 you would receive 500 dollars more than you sold to buy sterling.
4.
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The EUR/USD exchange rate is the most traded currency pair.
Imagine that the market rate for EUR/USD was 1.2234-37 (the offer side of a rate is always quoted as the last two pips, 1.2237). You would buy Euro at the offer rate (1.2237) and sell Euro at the bid rate (1.2234). If you wanted to buy EUR 1,000,000 you would buy using the offer rate of 1.2237. The difference between the bid rate and offer rate is 3 pips or 300 dollars. (1,000,000x0.0001x3=300 dollars).
5. Buy 1 million Euro at 1.2237. You now have to wait for the markets bid rate which is at 1.2234 to move above 1.2237 to make a profit. The market has to move at least 4 pips for you to make a 100 dollar profit on the deal. (1,000,000x0.0001x4=400 dollars).
6. Think about the consequences if the EUR/USD rate drops by only one pip to 1.2233-36, you are already 4 pips in the red at 400 dollars because you would have to sell at 1.2233 which is 4 pips lower than the rate you bought at.
7. Watch how pips move because the movement gives buyers or sellers a small indication in which direction a currency pair is going. You see GBP/USD at 1.3540-43 and then it moves to 1.3540-42. This could mean that GBP will appreciate as the bid and offer have narrowed to 2 pips so more buyers would come into the market and buy sterling at the cheaper rate of 1.3542. If however the rate widened to 1.3538-43 (5 pips), this could indicate that more people are selling sterling at 1.3538 and that sterling will depreciate.
Fotolia.com'>
The GBP/USD exchange rate is the 4th most traded currency pair.
Take the sterling dollar exchange rate GBP/USD 1.3035-1.3037. The rate is quoted to four decimal places with the final decimal place being 1/100th of 1 percent. The smallest change to a rate is one pip or one basis point. The only exception to this rule is Japanese Yen which is quoted to only 2 decimal places (USD/JPY 98.40).
2. Calculate what a one pip change in the GBP/USD rate of 1.3050 would be in dollars if you bought GBP 1,000,000. As a pip is 1/100th of 1 percent and there are 1.3050 dollars to every one sterling pound, a one pip change is 1,000,00x0.0001=100 dollars.
3. Calculate the value of the loss or gain in dollars if the GBP/USD rate moved to 1.3055. In step 2 the GBP/USD rate was 1.3050 dollars for every pound. Now there are 1.3055 dollars for every pound. More dollar pips per pound means the pound has appreciated in value against the dollar. So 1,000,000x0.0001x5=500 dollars. If you sold GBP1,000,000 you would receive 500 dollars more than you sold to buy sterling.
4.
Fotolia.com'>
The EUR/USD exchange rate is the most traded currency pair.
Imagine that the market rate for EUR/USD was 1.2234-37 (the offer side of a rate is always quoted as the last two pips, 1.2237). You would buy Euro at the offer rate (1.2237) and sell Euro at the bid rate (1.2234). If you wanted to buy EUR 1,000,000 you would buy using the offer rate of 1.2237. The difference between the bid rate and offer rate is 3 pips or 300 dollars. (1,000,000x0.0001x3=300 dollars).
5. Buy 1 million Euro at 1.2237. You now have to wait for the markets bid rate which is at 1.2234 to move above 1.2237 to make a profit. The market has to move at least 4 pips for you to make a 100 dollar profit on the deal. (1,000,000x0.0001x4=400 dollars).
6. Think about the consequences if the EUR/USD rate drops by only one pip to 1.2233-36, you are already 4 pips in the red at 400 dollars because you would have to sell at 1.2233 which is 4 pips lower than the rate you bought at.
7. Watch how pips move because the movement gives buyers or sellers a small indication in which direction a currency pair is going. You see GBP/USD at 1.3540-43 and then it moves to 1.3540-42. This could mean that GBP will appreciate as the bid and offer have narrowed to 2 pips so more buyers would come into the market and buy sterling at the cheaper rate of 1.3542. If however the rate widened to 1.3538-43 (5 pips), this could indicate that more people are selling sterling at 1.3538 and that sterling will depreciate.
Friday, January 23, 2015
How to Set Up Auto Trade FOREX with My Macd MetaTrader
1. Download and Install MetaTrader 4. You can get it with a free demo account from a number of brokers including FXCM.com, FXOpen.com and InterbankFX.com. One advantage of getting it from FXOpen.com is that the demo is unlimited. With most of the other brokers the demo account expires after 30 to 60 days. If you wish to open up an account with real money, some brokers require a minimum deposit of $2000, while others have no minimum.
2. Install MetaTrader. Once you've installed it you will need to reboot your computer. After you've done this launch the application. When it is open go to file “New Chart” and click on the forex pair that you are interested in trading.
3. Add the Expert Advisor (EA). Go to “View” and click “Navigator.” This will bring up a window. Scroll down until you see the heading “Expert Advisors.”
4. Add the Macd indicator and configure the EA. Under the “Expert Advisors” heading you will see an indicator labeled “Macd Sample.” Either right-click on this and click “Attach to Charts” or drag and drop it to the chart of the currency pair.
5. Set the EA up to autotrade. Once you've attached the EA to the chart, it will bring up a window called “Inputs”; to change any of these, left-click once and you can change the value within the boxes. If you don't know what you are doing then leave the values at default settings. If you do know then adjust the position-sizing and stop losses to your tastes. Then click “Common” and make sure the drop-down box is set to “Long and Short.” Make sure “Enable Alerts,” “Allow Live Trading,” “Allow DLL Imports” and 'Allow Import of External Experts” are all checked. The rest of the boxes should remain unchecked. Then click “OK.”
6. Check the upper right-hand corner of the screen. If everything is set up correctly, there will be a white smiley face there. If it isn't then there will be a frowning face. If there is an X then just click on “Expert Advisors” on the toolbar. If it doesn't seem to be working, check that everything is set up correctly under the “Common” setting.
2. Install MetaTrader. Once you've installed it you will need to reboot your computer. After you've done this launch the application. When it is open go to file “New Chart” and click on the forex pair that you are interested in trading.
3. Add the Expert Advisor (EA). Go to “View” and click “Navigator.” This will bring up a window. Scroll down until you see the heading “Expert Advisors.”
4. Add the Macd indicator and configure the EA. Under the “Expert Advisors” heading you will see an indicator labeled “Macd Sample.” Either right-click on this and click “Attach to Charts” or drag and drop it to the chart of the currency pair.
5. Set the EA up to autotrade. Once you've attached the EA to the chart, it will bring up a window called “Inputs”; to change any of these, left-click once and you can change the value within the boxes. If you don't know what you are doing then leave the values at default settings. If you do know then adjust the position-sizing and stop losses to your tastes. Then click “Common” and make sure the drop-down box is set to “Long and Short.” Make sure “Enable Alerts,” “Allow Live Trading,” “Allow DLL Imports” and 'Allow Import of External Experts” are all checked. The rest of the boxes should remain unchecked. Then click “OK.”
6. Check the upper right-hand corner of the screen. If everything is set up correctly, there will be a white smiley face there. If it isn't then there will be a frowning face. If there is an X then just click on “Expert Advisors” on the toolbar. If it doesn't seem to be working, check that everything is set up correctly under the “Common” setting.
Thursday, January 22, 2015
How to become a millionaire with FOREX (4 Steps)
1.
How FOREX Trading works.When you're playing the FOREX market there are two choices: buy or sell. Since there are only about 30 or so currency pairs(example: British Pounds vs U.S. Dollars or Euros vs Swiss Francs) the market isn't very wide.
A normal trade goes something like this: Say that 1 euro is worth $1.30 U.S. . From this price you can either buy euros, hoping it will go up higher, or sell euros, hoping it will go lower vs the dollar. When you make your trade you buy or sell in 'lots'. A lot is a larger block of money that your brokerage is offering a piece of. The overall size of a lot is not relevant to trading FOREX accounts because you determine what price to put on a currency price move. Since currency prices move very slight amounts the pennies are sub divided into 'pips'. These are hundredths of a penny in the case of the USD-EUR pair. So using our example earlier; the Euro is worth 1.3000 and it goes up to 1.3025, that's a move of 25 pips.When you place your trade a pip can be worth 1 penny, 1 dollar or even more. That 25 pips could be worth 25 cents, 25 dollars or more. When you close your order the money is yours. Simple.
2.
Setting up a FOREX account.The are dozens of online FOREX brokerages. These brokers make trading FOREX simple fast and easy. I am a fan of one called IBFX but most of the brokerages are the same with a few slight differences like deposit methods and minimum balance. I would look at a few before deciding to open a live money account. Once you've decided on a broker you'll download an account interface program, sort of like a control panel. These programs allow you to monitor all aspects of the currency markets from real time charting, to news headlines, to your trade execution. FOREX interfaces can monitor your trades and even automatically place them for you. Without these great programs trading online wouldn't be as fun.When trying out any FOREX online broker always open a demo account and get a full understanding of their software and client relations. I prefer my broker be located in the United States, that way I retain at least a slight amount of recourse-ability.
3.
Develop a system of Expert Advisers.Expert Advisers sound like people who tell you how to trade, but in reality they are automated trading programs that execute trade for you. Expert Advisers are computer algorithms that are programmed to read a certain market condition and execute a trade in response. They can be extremely profitable but you must understand that Expert Advisers are like golf clubs: They work as long as they are used under the correct FOREX market conditions. Expert Advisers are easy to find. Many are published for free and available in your FOREX Interface program. There are also independent programmers who are perfecting entire systems of FOREX trading centered around these Expert Advisers, they charge hundred to thousands of dollars for these simple programs. The idea behind the big price is the promise of big returns. Surprisingly some of them work extraordinarily well.
4.
Money ManagementI am a firm believer that it is very easy to make money on the FOREX. The hard part seems to be keeping it once you've made it. Since FOREX accounts are based on how much money you put into them, there is always a chance that a bad decision can wipe it all out quickly. Very turbulent market moves can happen with major banking news, like an announcement of a government bailout. This can send a currency pair rocketing hundreds of pips. To avoid losing all you money you need to use money management.Money management is the practice of not leaving yourself exposed to wipe outs on the FOREX. The easiest form of money management is to take your profits and move them into a separate FOREX account. That way if account A is wiped out account B still has your profits. Sort of like blackjack except in FOREX the odds that you'll win are much higher so the same bet over and over is actually a smart idea. Try a demo account for the FOREX. If you make money with the demo account, you will make money with a live account. I once put $250 into a FOREX account and had $1600 within a week. Solid money management and modest daily goals will make you a FOREX Millionaire in no time.
How FOREX Trading works.When you're playing the FOREX market there are two choices: buy or sell. Since there are only about 30 or so currency pairs(example: British Pounds vs U.S. Dollars or Euros vs Swiss Francs) the market isn't very wide.
A normal trade goes something like this: Say that 1 euro is worth $1.30 U.S. . From this price you can either buy euros, hoping it will go up higher, or sell euros, hoping it will go lower vs the dollar. When you make your trade you buy or sell in 'lots'. A lot is a larger block of money that your brokerage is offering a piece of. The overall size of a lot is not relevant to trading FOREX accounts because you determine what price to put on a currency price move. Since currency prices move very slight amounts the pennies are sub divided into 'pips'. These are hundredths of a penny in the case of the USD-EUR pair. So using our example earlier; the Euro is worth 1.3000 and it goes up to 1.3025, that's a move of 25 pips.When you place your trade a pip can be worth 1 penny, 1 dollar or even more. That 25 pips could be worth 25 cents, 25 dollars or more. When you close your order the money is yours. Simple.
2.
Setting up a FOREX account.The are dozens of online FOREX brokerages. These brokers make trading FOREX simple fast and easy. I am a fan of one called IBFX but most of the brokerages are the same with a few slight differences like deposit methods and minimum balance. I would look at a few before deciding to open a live money account. Once you've decided on a broker you'll download an account interface program, sort of like a control panel. These programs allow you to monitor all aspects of the currency markets from real time charting, to news headlines, to your trade execution. FOREX interfaces can monitor your trades and even automatically place them for you. Without these great programs trading online wouldn't be as fun.When trying out any FOREX online broker always open a demo account and get a full understanding of their software and client relations. I prefer my broker be located in the United States, that way I retain at least a slight amount of recourse-ability.
3.
Develop a system of Expert Advisers.Expert Advisers sound like people who tell you how to trade, but in reality they are automated trading programs that execute trade for you. Expert Advisers are computer algorithms that are programmed to read a certain market condition and execute a trade in response. They can be extremely profitable but you must understand that Expert Advisers are like golf clubs: They work as long as they are used under the correct FOREX market conditions. Expert Advisers are easy to find. Many are published for free and available in your FOREX Interface program. There are also independent programmers who are perfecting entire systems of FOREX trading centered around these Expert Advisers, they charge hundred to thousands of dollars for these simple programs. The idea behind the big price is the promise of big returns. Surprisingly some of them work extraordinarily well.
4.
Money ManagementI am a firm believer that it is very easy to make money on the FOREX. The hard part seems to be keeping it once you've made it. Since FOREX accounts are based on how much money you put into them, there is always a chance that a bad decision can wipe it all out quickly. Very turbulent market moves can happen with major banking news, like an announcement of a government bailout. This can send a currency pair rocketing hundreds of pips. To avoid losing all you money you need to use money management.Money management is the practice of not leaving yourself exposed to wipe outs on the FOREX. The easiest form of money management is to take your profits and move them into a separate FOREX account. That way if account A is wiped out account B still has your profits. Sort of like blackjack except in FOREX the odds that you'll win are much higher so the same bet over and over is actually a smart idea. Try a demo account for the FOREX. If you make money with the demo account, you will make money with a live account. I once put $250 into a FOREX account and had $1600 within a week. Solid money management and modest daily goals will make you a FOREX Millionaire in no time.
Wednesday, January 21, 2015
How to Find Free Forex Buy and Sell Indicators That Are Reliable
1. Research the websites of Forex brokers who provide free trading signals for account holders. Many brokers offer trading indicator and signal services to their account holders. You will find the types of signals offered on a broker's website. Make a list of several Forex brokers who offer free trading indicators.
2. Open free practice accounts with the brokers on your list. All Forex brokers allow someone to sign up for demo accounts to practice trades. Sign up for one or two accounts at a time and learn how to use each broker's trading software.
3. Practice trades using the free indicators or buy/sell signals provided by each broker. Keep track of which signals from which brokers provide the best results. Trade with the indicators for at least a month to get an accurate representation of the validity of a trading plan.
4. Open a live trading account with the broker whose trading signals provided the best results. Start trading using the indicators with small lot sizes, keeping track of your results. Most brokers with signals have several to choose from, so you can switch to the indicator you believe will provide the best results.
2. Open free practice accounts with the brokers on your list. All Forex brokers allow someone to sign up for demo accounts to practice trades. Sign up for one or two accounts at a time and learn how to use each broker's trading software.
3. Practice trades using the free indicators or buy/sell signals provided by each broker. Keep track of which signals from which brokers provide the best results. Trade with the indicators for at least a month to get an accurate representation of the validity of a trading plan.
4. Open a live trading account with the broker whose trading signals provided the best results. Start trading using the indicators with small lot sizes, keeping track of your results. Most brokers with signals have several to choose from, so you can switch to the indicator you believe will provide the best results.
How to Trade the Forex Weekend Gaps (5 Steps)
1. Choose the currency pair you want to trade. Although there are many different currency pairs traded every day, the most actively traded currency pairs traded today are the euro-dollar (symbol EUR/USD), the dollar-yen (symbol USD/JPY) and the pound-dollar (symbol GPB/USD). If you are new to FOREX, you may want to start out trading the euro-dollar pair, as it is the most liquid, and therefore less volatile than other pairs.
2. Identify the currency pair's closing exchange rate set on Friday. The closing exchange rate for the gap strategy is the closing exchange rate achieved on Friday at 5:00PM EST. For example, if the EUR/USD closed at 1.3800 on Friday at 5:00PM EST you would record this information and compare it to the following week's opening exchange rate, to be set on Sunday evening when the Asian market opens at 7:00PM EST.
3. Determine the percentage size of the gap. For example, you may want your gap to be greater than or equal to one percent, half a percent, or even a quarter of a percent. Assume you had chosen one percent. In this case you would want to verify if Sunday night's Asia opening exchange rate is off by one percent or more from where the exchange rate closed on Friday at 5:00PM EST.
4. Initiate a trade if the gap is greater than or equal to your predetermined criteria. For example, if you are using a one-percent gap criterion in the EUR/USD, then you would buy the currency pair if the exchange rate opened the week one percent or more below where it closed on Friday. If the EUR/USD currency pair opened the week one percent or more above where it closed on Friday, you would sell the currency pair.
5. Close out your trade once the gap has been closed or if the gap continues to widen beyond your initial criterion.
2. Identify the currency pair's closing exchange rate set on Friday. The closing exchange rate for the gap strategy is the closing exchange rate achieved on Friday at 5:00PM EST. For example, if the EUR/USD closed at 1.3800 on Friday at 5:00PM EST you would record this information and compare it to the following week's opening exchange rate, to be set on Sunday evening when the Asian market opens at 7:00PM EST.
3. Determine the percentage size of the gap. For example, you may want your gap to be greater than or equal to one percent, half a percent, or even a quarter of a percent. Assume you had chosen one percent. In this case you would want to verify if Sunday night's Asia opening exchange rate is off by one percent or more from where the exchange rate closed on Friday at 5:00PM EST.
4. Initiate a trade if the gap is greater than or equal to your predetermined criteria. For example, if you are using a one-percent gap criterion in the EUR/USD, then you would buy the currency pair if the exchange rate opened the week one percent or more below where it closed on Friday. If the EUR/USD currency pair opened the week one percent or more above where it closed on Friday, you would sell the currency pair.
5. Close out your trade once the gap has been closed or if the gap continues to widen beyond your initial criterion.
Saturday, January 17, 2015
How to Scalp on the Forex
1. Ensure you are trading with a broker filling orders through an electronic communications network (ECN) or straight-through processing (STP) of trade orders. Avoid Forex brokers using their own dealing desks. To scalp, you want a broker providing typical spreads of two pips or less on the major currency pairs.
2. Download the broker's charting software and set up the software using candlestick price indicators at one- and five-minute intervals. If you have not used the broker before, sign up for a demo account and practice trading using simulated money until you are proficient with the broker's order system.
3. Select trading indicators to provide guidance of buy and sell points. Support and resistance lines, pivot points and parabolic SAR are some indicators often used by scalping traders. The price chart software will allow you to install these indicators as overlays or in separate boxes, tracking with the currency values.
4. Develop profit and stop-loss targets for each trade. Use the daily average true range (ATR) indicator to set a profit goal per trade. For example, a currency pair may have a daily ATR of 100 pips. As a scalper, you may want to make 10 percent of the ATR, or 10 pips with each trade. To limit losses, you could set a stop loss for each trade at six pips. With this plan, even if only 50 percent of your trades are successful, you will be a profitable Forex scalper.
5. Scalp trade Forex using your trading plan during those periods when the exchange prices are fluctuating between support and resistance levels or at specific times each day when the market has shown patterns you can profitably trade. A scalping trade should be entered following the guidance of your chosen indicators and you should be out of the trade within several minutes.
2. Download the broker's charting software and set up the software using candlestick price indicators at one- and five-minute intervals. If you have not used the broker before, sign up for a demo account and practice trading using simulated money until you are proficient with the broker's order system.
3. Select trading indicators to provide guidance of buy and sell points. Support and resistance lines, pivot points and parabolic SAR are some indicators often used by scalping traders. The price chart software will allow you to install these indicators as overlays or in separate boxes, tracking with the currency values.
4. Develop profit and stop-loss targets for each trade. Use the daily average true range (ATR) indicator to set a profit goal per trade. For example, a currency pair may have a daily ATR of 100 pips. As a scalper, you may want to make 10 percent of the ATR, or 10 pips with each trade. To limit losses, you could set a stop loss for each trade at six pips. With this plan, even if only 50 percent of your trades are successful, you will be a profitable Forex scalper.
5. Scalp trade Forex using your trading plan during those periods when the exchange prices are fluctuating between support and resistance levels or at specific times each day when the market has shown patterns you can profitably trade. A scalping trade should be entered following the guidance of your chosen indicators and you should be out of the trade within several minutes.
Thursday, January 15, 2015
How to Start a FOREX LLC Company (5 Steps)
1. Choose a unique company name that is not being used by another LLC in the state you are filing in. You can check to see if a name is open by making an inquiry at the Secretary of State Office in your state. Several state government websites allow you to search for this information online (see Resources).
2. File the Articles of Organization paperwork for a limited liability corporation (LLC). Some people choose to use a lawyer, while others do the paperwork themselves. Filing fees vary from state to state--you'll need to include those with the filing, which is done at a local courthouse or sent to the Secretary of State office. No special paperwork beyond the normal LLC papers are needed to set up a new Forex LLC company.
3. If you are going to be working as a Forex broker, you must get certified as a broker in your country of residence. In the United States this means a Series 7, Series 63, and a Series 65 (or sometimes a 66) license. You will also need to pass the National Association of Securities Dealers Series 3 test. If you're not going to be working as a broker, then you can skip this step and simply proceed after getting the LLC set up.
4. If necessary, create an 'operating agreement' to explain the format and function of your company. Once again most people choose to have a lawyer draw up these papers, which are then filed with the Secretary of State office and cover issues like management powers, payment to owners, and split up of the company in a partnership. In most states this isn't legally required, but if there is more than one owner to the LLC, it's a critical step, and a good idea even for a sole proprietor owned LLC.
5. Take care of any local or state business licenses that are necessary. These costs can vary from state to state, as some areas have both state and local business fees and licenses, while others have neither. Take care of all these licensing agreements and your Forex LLC will be ready to go.
2. File the Articles of Organization paperwork for a limited liability corporation (LLC). Some people choose to use a lawyer, while others do the paperwork themselves. Filing fees vary from state to state--you'll need to include those with the filing, which is done at a local courthouse or sent to the Secretary of State office. No special paperwork beyond the normal LLC papers are needed to set up a new Forex LLC company.
3. If you are going to be working as a Forex broker, you must get certified as a broker in your country of residence. In the United States this means a Series 7, Series 63, and a Series 65 (or sometimes a 66) license. You will also need to pass the National Association of Securities Dealers Series 3 test. If you're not going to be working as a broker, then you can skip this step and simply proceed after getting the LLC set up.
4. If necessary, create an 'operating agreement' to explain the format and function of your company. Once again most people choose to have a lawyer draw up these papers, which are then filed with the Secretary of State office and cover issues like management powers, payment to owners, and split up of the company in a partnership. In most states this isn't legally required, but if there is more than one owner to the LLC, it's a critical step, and a good idea even for a sole proprietor owned LLC.
5. Take care of any local or state business licenses that are necessary. These costs can vary from state to state, as some areas have both state and local business fees and licenses, while others have neither. Take care of all these licensing agreements and your Forex LLC will be ready to go.
Friday, January 9, 2015
How to Trade Forex With the Big Banks (4 Steps)
1. Visit the Currenex website to find Forex firms that use the Currenex network (see Resources). Research 'White Label Partners' and request an account that trades directly within the Currenex network, or with Currenex itself.
2. Choose a broker by evaluating their demo platform product and reviewing their commission structures. Forex brokers offer varying platforms. Some offer more robust charting software than others, and the appearance of their price quotes and order entry systems may differ. Basically, you get what you pay for; brokers with low commissions tend to have low-end platforms as well.
3. Check account minimums and fund your account accordingly.
4. Use trading platform to place trades within the intrabank network.
2. Choose a broker by evaluating their demo platform product and reviewing their commission structures. Forex brokers offer varying platforms. Some offer more robust charting software than others, and the appearance of their price quotes and order entry systems may differ. Basically, you get what you pay for; brokers with low commissions tend to have low-end platforms as well.
3. Check account minimums and fund your account accordingly.
4. Use trading platform to place trades within the intrabank network.
Thursday, January 8, 2015
How to Make a Living With Forex
1. Set up a brokerage account with a reliable broker. Oanda.com and FXCM.com are two reliable brokers that have been around for a long time and are well-capitalized enough that you will get your money back.
2. Find a few reliable trading systems (you can find some recommended trading systems below under Resources). There are numerous approaches to trading the markets. Some of them include:Using someone else's trading system from a course.
Purchasing a software that has a system built in and trading it manually.
Purchasing a software that automatically trades the forex markets for you, also known as a trading robot.
Signing up with a reliable forex signal provider and follow its signals.You will want to find at least 2-3 methods that work for you and your particular tolerance for risk. The reason being that markets are constantly evolving and sometimes systems go through periods of draw down or quit working altogether. So if you wish to make a living with forex you do not want to have your entire income dependent on one system. See the resources below for some recommended trading systems.
3. Do your research.The easiest way to find a system or software that works for you is to go to ForexPeaceArmy.com. There you will find a collection of third-party independent reviews specifically geared towards the forex markets. Since affiliate links are not allowed, you will get honest feedback from people who have used the software, signal service or course that you are looking at. You should find systems that are at least two years old, have more than 50 reviews and have four out of five stars. You can also check EliteTrader.com. This is another forum where many professional traders hang out.
4. Test, test, test. No matter which systems you decide to trade with, make sure that you have tested them in a simulator for at least a month before using real money with them. You can get a good simulator from almost any forex broker these days, including Oanda.com and FXCM.com
5. Save, save, save. Because systems can sometimes go through periods of draw-down, have at least six months to a year of living expenses covered before you decide to try to make a full-time living trading forex.
2. Find a few reliable trading systems (you can find some recommended trading systems below under Resources). There are numerous approaches to trading the markets. Some of them include:Using someone else's trading system from a course.
Purchasing a software that has a system built in and trading it manually.
Purchasing a software that automatically trades the forex markets for you, also known as a trading robot.
Signing up with a reliable forex signal provider and follow its signals.You will want to find at least 2-3 methods that work for you and your particular tolerance for risk. The reason being that markets are constantly evolving and sometimes systems go through periods of draw down or quit working altogether. So if you wish to make a living with forex you do not want to have your entire income dependent on one system. See the resources below for some recommended trading systems.
3. Do your research.The easiest way to find a system or software that works for you is to go to ForexPeaceArmy.com. There you will find a collection of third-party independent reviews specifically geared towards the forex markets. Since affiliate links are not allowed, you will get honest feedback from people who have used the software, signal service or course that you are looking at. You should find systems that are at least two years old, have more than 50 reviews and have four out of five stars. You can also check EliteTrader.com. This is another forum where many professional traders hang out.
4. Test, test, test. No matter which systems you decide to trade with, make sure that you have tested them in a simulator for at least a month before using real money with them. You can get a good simulator from almost any forex broker these days, including Oanda.com and FXCM.com
5. Save, save, save. Because systems can sometimes go through periods of draw-down, have at least six months to a year of living expenses covered before you decide to try to make a full-time living trading forex.
Tuesday, January 6, 2015
How to Calculate Profit Loss in FOREX Trading
1. Write out this simple formula on a paper pad: Profit = Price Change in Pips x Units Traded. For example, if your Forex broker requires a 1% margin for you to trade any currency pair, then you can control up to $100,000 with $1,000. So, in this example, if you buy 10 lots of a given currency pair to go long, then you control over $1,000,000 in this currency. Mark down the number of lots you have traded for the 'Units Trading' component of the equation.
2. Use the same example as if you were buying a currency pair at price of 1.25 to go long and then make note of your entry price.
3. As the trade progresses, you then sell it at 1.40. Then you will have made 15 percentage in points, or pips. A pip is the smallest change of price for any foreign currency listed on the Forex. On a standard Forex lot, a pip is equal to $10 when the USD is the quote currency, so you will have earned $150 (15 pips X $10 per pip) per standard Forex lot in this example.
4. Using the Profit = Price Change in Pips x Units Traded formula to calculate Profit/Loss, your calculation would break down as $1,500 = 15 Pips gained x 10 Standard Forex Lots.
2. Use the same example as if you were buying a currency pair at price of 1.25 to go long and then make note of your entry price.
3. As the trade progresses, you then sell it at 1.40. Then you will have made 15 percentage in points, or pips. A pip is the smallest change of price for any foreign currency listed on the Forex. On a standard Forex lot, a pip is equal to $10 when the USD is the quote currency, so you will have earned $150 (15 pips X $10 per pip) per standard Forex lot in this example.
4. Using the Profit = Price Change in Pips x Units Traded formula to calculate Profit/Loss, your calculation would break down as $1,500 = 15 Pips gained x 10 Standard Forex Lots.
How to Run a Forex Business From Home (4 Steps)
1. Sign up for a free practice account at a Forex website (see Resources below). Most of them have this option so that you can learn how to begin. Some of these sites also have online courses and information about Forex workshops in your area. If you're already an active trader, then open an account and start trading.
2. Begin trading when you feel ready. Then start with small amounts until you are confident enough to take on bigger trades. You can open or close your account at any time you want, and you don't have to buy any currency to trade it.
3. Download a program called Forex Killer. After you've set it up, it can automatically do trades for you while you're away from your computer or sleeping.
4. Take your time and let your business grow. Within time, it is quite possible that this can become your full-time career, and you can be a professional and well-qualified trader.
2. Begin trading when you feel ready. Then start with small amounts until you are confident enough to take on bigger trades. You can open or close your account at any time you want, and you don't have to buy any currency to trade it.
3. Download a program called Forex Killer. After you've set it up, it can automatically do trades for you while you're away from your computer or sleeping.
4. Take your time and let your business grow. Within time, it is quite possible that this can become your full-time career, and you can be a professional and well-qualified trader.
Friday, January 2, 2015
How to Grid Trade FOREX (8 Steps)
1. Start to grid trade FOREX by opening a buy and a sell transaction on the same currency. We'll use the euro and US dollar currency pair as an example. Assume the starting price is EUR/USD = 1.3000 (meaning it takes $1.3000 to buy one euro). Note the quote is taken to 4 decimal places. In Forex, the smallest price change is 1/100 cent (called a pip), or $0.0001. To start, the grid consists of 1 buy at 1.3000 and one sell at the same exchange rate.
2. Set your target price levels. Some traders do this by placing orders to automatically close out a buy (or sell) when a target price is reached. To keep it simple, we'll use a target of plus and minus 100 pips or one penny (usually the difference is smaller). The target in our example for the buy is 1.3100 and for the sell, 1.2900.
3. Close out the gain when a target price is reached. For example, if the exchange rate falls to 1.2900, close out the sell. At this point, you have a 100 pip profit on the sell which is now closed. The buy is showing a 100 pip loss, but is still open.
4. Open a new sell and buy at the target price, each with its own target price at plus and minus 100 pips. In this example, the second buy and sell are at 1.2900 with targets at 1.2800 and 1.3000.
5. Wait for the exchange rate to fluctuate back to 1.3000. When this point is reached, the second sell will show a 100 pip loss. However, the first buy will be back to its original level, wiping out its loss and the second buy shows a 100 pip gain, offsetting the 100 pip loss on the sell side. The net gain/loss in the open transactions is now zero.
6. Close out all three transactions if you are done trading for the day. The first buy shows no net change. The second buy is at plus 100 pips and the second sell is at minus 100 pips. However, remember you already closed out the first sell for a 100 pip profit, which is yours to keep since all transactions are now complete.
7. Close out only the transactions that have reached their target level, instead of closing out all transactions and open new buy and sell pairs as appropriate. Normally a trader will continue this process throughout the trading day, accumulating profit with each swing of the exchange rate up and down, and close everything out only at the end of the trading session.
8. Open a virtual (practice) Forex account online. Many good Forex dealers allow you to do this for free. The grid trading sequence described here is extremely simple. You should practice grid trading until you are comfortable dealing with the way currency exchange rates fluctuate in the real world. Once you reach that point, you'll be ready to grid trade FOREX.
2. Set your target price levels. Some traders do this by placing orders to automatically close out a buy (or sell) when a target price is reached. To keep it simple, we'll use a target of plus and minus 100 pips or one penny (usually the difference is smaller). The target in our example for the buy is 1.3100 and for the sell, 1.2900.
3. Close out the gain when a target price is reached. For example, if the exchange rate falls to 1.2900, close out the sell. At this point, you have a 100 pip profit on the sell which is now closed. The buy is showing a 100 pip loss, but is still open.
4. Open a new sell and buy at the target price, each with its own target price at plus and minus 100 pips. In this example, the second buy and sell are at 1.2900 with targets at 1.2800 and 1.3000.
5. Wait for the exchange rate to fluctuate back to 1.3000. When this point is reached, the second sell will show a 100 pip loss. However, the first buy will be back to its original level, wiping out its loss and the second buy shows a 100 pip gain, offsetting the 100 pip loss on the sell side. The net gain/loss in the open transactions is now zero.
6. Close out all three transactions if you are done trading for the day. The first buy shows no net change. The second buy is at plus 100 pips and the second sell is at minus 100 pips. However, remember you already closed out the first sell for a 100 pip profit, which is yours to keep since all transactions are now complete.
7. Close out only the transactions that have reached their target level, instead of closing out all transactions and open new buy and sell pairs as appropriate. Normally a trader will continue this process throughout the trading day, accumulating profit with each swing of the exchange rate up and down, and close everything out only at the end of the trading session.
8. Open a virtual (practice) Forex account online. Many good Forex dealers allow you to do this for free. The grid trading sequence described here is extremely simple. You should practice grid trading until you are comfortable dealing with the way currency exchange rates fluctuate in the real world. Once you reach that point, you'll be ready to grid trade FOREX.
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