1. Understand the FOREX marketplace. Like any advanced field of endeavor, FOREX trading has its share of arcane vocabulary and practices. A would-be trader must master how foreign currencies are priced, how trades are placed and how to know when to enter and exit a trading position.
2. Open an online FOREX brokerage account at a good broker. What makes a broker 'good?' You will want one that offers reliable information through tutorials and personal contact. You can compare the pricing schemes of various brokers; some charge a fixed amount or percentage fee per transaction. Also check a broker's reputation by looking for any online complaints against the broker. Finally, the broker should offer a powerful, intuitive trading platform that permits you to easily enter and monitor the types of trades you plan to make.
3. Perfect your trading strategy. FOREX traders use fundamental and/or technical analysis to guide their trades. Fundamental analysis interprets the economic, social and political factors that influence the demand for different currencies. Technical analysis uses past prices and trading volumes to predict future prices. Fundamental analysis is most often used for establishing long-term positions whereas technical analysis is favored by day traders.
4. Investigate FOREX signaling software. Because of the rapid-fire pace of FOREX trading, many traders rely on real-time software to signal trading entry and exit points. Almost all of these software packages rely on technical analysis to generate signals. The better programs offer a wide range of strategies that use price trends and moving averages to suggest buy and sell transactions. In some cases, brokers may offer trading platforms that are integrated with signaling programs -- these are often a good choice because they require you to only learn one system.
5. Practice with simulated trading. Most broker platforms offer a simulation mode, in which practice trades are made without monetary risk. By extensively testing your trading strategy in simulation mode, you can make important improvements before you “go live.” The testing period will also allow you to establish the trading discipline -- knowing when to cut your losses and take your profits -- employed by successful FOREX traders.
Sunday, April 26, 2015
Saturday, April 25, 2015
How to Figure Direction in the FOREX Market (3 Steps)
1. Determine the long-term trend. Plot a 13-week SMA line onto a weekly price chart for your currency pair. If current prices are above the SMA line, you are in a long-term uptrend. The reverse is true if current prices are below the SMA line.
2. Determine the intermediate-term trend. Plot a 13-period SMA onto a four-hour price chart and compare the result with the one obtained for the long-term trend. If they agree and if the trend line on the four-hour chart makes an angle of 20 degrees or more with respect to current price line, then the intermediate trend direction is confirmed and may hold long enough for you to place a profitable trade.
3. Determine the short-term trend. Plot an SMA of the last 55 hourly mean prices--the average of each hour’s high and low prices--for your currency pair onto a one-hour price chart. When the one-hour SMA moves into agreement with your other two SMAs, you have identified the possible start of a short-term trend and a trading opportunity.
2. Determine the intermediate-term trend. Plot a 13-period SMA onto a four-hour price chart and compare the result with the one obtained for the long-term trend. If they agree and if the trend line on the four-hour chart makes an angle of 20 degrees or more with respect to current price line, then the intermediate trend direction is confirmed and may hold long enough for you to place a profitable trade.
3. Determine the short-term trend. Plot an SMA of the last 55 hourly mean prices--the average of each hour’s high and low prices--for your currency pair onto a one-hour price chart. When the one-hour SMA moves into agreement with your other two SMAs, you have identified the possible start of a short-term trend and a trading opportunity.
Sunday, April 19, 2015
How to make money trading foreign exchange (FOREX) from your PC
1.
GET EDUCATED - This is by far the most absolutely important step. You need to know what the market is all about. What are currency pairs, pips, market makers, managing margins etc. These are terms you will hear bantered about and are absolutely important in understanding when to trade and when not to trade. However, you should feel rest assured that you will not have to know everything in order to place your first trade and make serious money. Below, under the resources section are links to some websites which beginners can use to get some education. These websites absolutely breaks it down in extremely simple (sometimes too simple) terms. They also offer advance tutorials for those of us who would like to sharpen our skills. There you can create your own username and meet the growing community of like minded traders who you can share ideas and ask questions. Best of all they are free.
2.
OPEN A FREE PRACTICE ACCOUNT - Just as important as the first step, you should immediately open free a practice account. Everything is not going to come at you all at once, so the best way is to learn as you go. Therefore, you need to visualize what a pip is and see how spreads work on an account that actually follows the market movements, while not risking your own money. Usually, these providers allow you to trade, some fake money so you can test your strategies and realize 'profits' and 'losses.' This way you will understand the risk involved. They also afford you the opportunity to upgrade your account by depositing nominal amounts into a real account (called mini and micro accounts). This has some positives and negatives. The positive is that some of these account requirements can be as low as $1. The draw back is you will never truly understand the gravity of your investment if your only risking one dollar. The average micro account usually starts at $200, that is even a bit low, but you will at least see what it means to gain on a lot or lose on a trade. Trust me, $200 is nothing to lose in this market. Again, below under the resources section are links to some sites where you can get a free practice account. There you can practice trading a micro account which starts at $100, once you have been through all the tutorials and feel comfortable with your trading strategy. Now, there are many companies out there offering practice accounts, but not all of them try to make the process easy by offering tutorials on trading and the like.
3.
GET CHARTING SOFTWARE: This is a very important step, but you can wait until you are familiarized with the inner workings of the market. The charting tools helps you to intelligently guage the market trends and plot your trading positions. This tool is essential, but I say wait, because the websites below actually provide free charting tools. Once you understand them, then you can probably consider purchasing more advanced charting tools. Why? Well, just take a look at the picture I used to represent this this step in this article. This is typical for the average Forex Trader. They are on top of their game and are not about to lose money because they did not invest a small amount of their earnings in the best charting technology. Of course small is relative, because charting tools can range from $0 - $10,000 or more. Additionally, there might be a monthly fee charged for the data feed. Believe me, this is a worthy investment. I actually own and use two charting softwares and accompanying data feeds. I am sure that there are others who use more than that. Now, there are tons of offers on the internet for charting tools ranging from the ridiculous to really good. The important thing to remember is, during your practice, you will have developed a trading style, so you should pick the tool that best fits your trading style. I am confident if you follow steps 1 and 2, you will find the right charting tool that best fits your trading style. Coupled with step three, you should be on your way to making lots of money. Happy trading!
GET EDUCATED - This is by far the most absolutely important step. You need to know what the market is all about. What are currency pairs, pips, market makers, managing margins etc. These are terms you will hear bantered about and are absolutely important in understanding when to trade and when not to trade. However, you should feel rest assured that you will not have to know everything in order to place your first trade and make serious money. Below, under the resources section are links to some websites which beginners can use to get some education. These websites absolutely breaks it down in extremely simple (sometimes too simple) terms. They also offer advance tutorials for those of us who would like to sharpen our skills. There you can create your own username and meet the growing community of like minded traders who you can share ideas and ask questions. Best of all they are free.
2.
OPEN A FREE PRACTICE ACCOUNT - Just as important as the first step, you should immediately open free a practice account. Everything is not going to come at you all at once, so the best way is to learn as you go. Therefore, you need to visualize what a pip is and see how spreads work on an account that actually follows the market movements, while not risking your own money. Usually, these providers allow you to trade, some fake money so you can test your strategies and realize 'profits' and 'losses.' This way you will understand the risk involved. They also afford you the opportunity to upgrade your account by depositing nominal amounts into a real account (called mini and micro accounts). This has some positives and negatives. The positive is that some of these account requirements can be as low as $1. The draw back is you will never truly understand the gravity of your investment if your only risking one dollar. The average micro account usually starts at $200, that is even a bit low, but you will at least see what it means to gain on a lot or lose on a trade. Trust me, $200 is nothing to lose in this market. Again, below under the resources section are links to some sites where you can get a free practice account. There you can practice trading a micro account which starts at $100, once you have been through all the tutorials and feel comfortable with your trading strategy. Now, there are many companies out there offering practice accounts, but not all of them try to make the process easy by offering tutorials on trading and the like.
3.
GET CHARTING SOFTWARE: This is a very important step, but you can wait until you are familiarized with the inner workings of the market. The charting tools helps you to intelligently guage the market trends and plot your trading positions. This tool is essential, but I say wait, because the websites below actually provide free charting tools. Once you understand them, then you can probably consider purchasing more advanced charting tools. Why? Well, just take a look at the picture I used to represent this this step in this article. This is typical for the average Forex Trader. They are on top of their game and are not about to lose money because they did not invest a small amount of their earnings in the best charting technology. Of course small is relative, because charting tools can range from $0 - $10,000 or more. Additionally, there might be a monthly fee charged for the data feed. Believe me, this is a worthy investment. I actually own and use two charting softwares and accompanying data feeds. I am sure that there are others who use more than that. Now, there are tons of offers on the internet for charting tools ranging from the ridiculous to really good. The important thing to remember is, during your practice, you will have developed a trading style, so you should pick the tool that best fits your trading style. I am confident if you follow steps 1 and 2, you will find the right charting tool that best fits your trading style. Coupled with step three, you should be on your way to making lots of money. Happy trading!
Thursday, April 16, 2015
How to Set Up a Forex Trading Business (7 Steps)
1. Decide on a business model. There are many approaches to developing a forex trading business:You could manage your own money.
You could manage other people's money.
You could send out trading signals to other people.If you are just getting started, then the obvious place to begin is to manage your own money first. Then you can start managing other people's money or selling your trading signals later.
2. Find a forex trading system that suits your needs and that wins consistently. The easiest way to do this is by going to ForexPeaceArmy.com. Here you will find hundreds of independent third-party reviews of trading courses, systems, software and signals. Since no affiliate links are allowed, most of the reviews are honest and unbiased. Finding a trading system is a personal decision, and you will need to choose one that fits your needs in terms of risk tolerance as well as your personality type.
3. Find a broker and test it out to see if it suits you. In order to do this, you will need to find a broker that has a simulator to use. Most brokers these days offer free simulator software. Two reliable ones that have been around for a while are Oanda.com and FXCM.com.
4. Choose a business type. You could just keep it as a sole proprietor if you plan on managing your own money only, although there are some legal and tax advantages that you will miss out on. If you wish to create a corporation without a lot of legal fees, then you can go to Nolo.com and use its pre-made forms to create one. If you plan on managing other people's money, then you will need to procure lawyers who can take care of all of the legal work for you. A good place to start is Greencompany.com (see link in References below), which specializes in helping people start up investment funds.
5. Build a track record. If you plan on managing other people's money or creating a website to sell trading signals, then you will need to create a track record of consistent winners. You will need a record of about six months of trades, both winners and losers, to show people that you are capable of making a profit. Greencompany.com can help audit your record to show that it is legit.
6. Build a website. If you have decided to build a forex signal service then you will need a website to attract customers. A good place to start off is SiteGround.com. It can provide you hosting as well as professionally built websites and templates to get you started.
7. Market your site. Whether you wish to do it yourself or pay someone else to do it for you, WarriorForum.com is a good place to learn everything there is about Internet marketing. An easy method is to use is pay-per-click search engines such as Google or Yahoo. You can start an account with as little as $20 and start getting traffic and potential customers immediately.
You could manage other people's money.
You could send out trading signals to other people.If you are just getting started, then the obvious place to begin is to manage your own money first. Then you can start managing other people's money or selling your trading signals later.
2. Find a forex trading system that suits your needs and that wins consistently. The easiest way to do this is by going to ForexPeaceArmy.com. Here you will find hundreds of independent third-party reviews of trading courses, systems, software and signals. Since no affiliate links are allowed, most of the reviews are honest and unbiased. Finding a trading system is a personal decision, and you will need to choose one that fits your needs in terms of risk tolerance as well as your personality type.
3. Find a broker and test it out to see if it suits you. In order to do this, you will need to find a broker that has a simulator to use. Most brokers these days offer free simulator software. Two reliable ones that have been around for a while are Oanda.com and FXCM.com.
4. Choose a business type. You could just keep it as a sole proprietor if you plan on managing your own money only, although there are some legal and tax advantages that you will miss out on. If you wish to create a corporation without a lot of legal fees, then you can go to Nolo.com and use its pre-made forms to create one. If you plan on managing other people's money, then you will need to procure lawyers who can take care of all of the legal work for you. A good place to start is Greencompany.com (see link in References below), which specializes in helping people start up investment funds.
5. Build a track record. If you plan on managing other people's money or creating a website to sell trading signals, then you will need to create a track record of consistent winners. You will need a record of about six months of trades, both winners and losers, to show people that you are capable of making a profit. Greencompany.com can help audit your record to show that it is legit.
6. Build a website. If you have decided to build a forex signal service then you will need a website to attract customers. A good place to start off is SiteGround.com. It can provide you hosting as well as professionally built websites and templates to get you started.
7. Market your site. Whether you wish to do it yourself or pay someone else to do it for you, WarriorForum.com is a good place to learn everything there is about Internet marketing. An easy method is to use is pay-per-click search engines such as Google or Yahoo. You can start an account with as little as $20 and start getting traffic and potential customers immediately.
Monday, April 13, 2015
How to Read Price Action in FOREX Charts
1. Set the chart time frame. Day traders typically use intraday price charts with trade intervals set anywhere from one to 30 minutes.
2. Choose price measurement type. Japanese candlestick charts generally work better for forex traders, as they allow analysts to see the open, close, high and low information for each price interval.
3. Measure price support. Use your chart-drawing tools and draw a line connecting price lows on the chart. This will give you an idea where buyers have recently supported the price.
4. Measure price resistance. Draw a line on your chart connecting price tops. This will help you determine the price area where a supply of sellers resides.
5. Determine whether there is a price trend or a trading range. If the price support line you drew is generally angled higher from left to right, it is safe to assume that the price is in an uptrend. If the support line is flat, the currency pair is likely randomly trading in a range.
2. Choose price measurement type. Japanese candlestick charts generally work better for forex traders, as they allow analysts to see the open, close, high and low information for each price interval.
3. Measure price support. Use your chart-drawing tools and draw a line connecting price lows on the chart. This will give you an idea where buyers have recently supported the price.
4. Measure price resistance. Draw a line on your chart connecting price tops. This will help you determine the price area where a supply of sellers resides.
5. Determine whether there is a price trend or a trading range. If the price support line you drew is generally angled higher from left to right, it is safe to assume that the price is in an uptrend. If the support line is flat, the currency pair is likely randomly trading in a range.
Saturday, April 11, 2015
How to Hedge in FOREX Trading
1. Set up an account with a foreign exchange market platform service, such as FOREX.com or avafx.com.
2. Make your primary investment. Select a currency pair that you think will result in a profit, such as USD/JPY. (U.S. dollars/Japanese yen)
3. Make a secondary investment that is equal and inverse to the first. In this case, it would be JPY/USD.
4. Get out of both investments at the same time. Your profit on one will cover the loss you take on the other.
2. Make your primary investment. Select a currency pair that you think will result in a profit, such as USD/JPY. (U.S. dollars/Japanese yen)
3. Make a secondary investment that is equal and inverse to the first. In this case, it would be JPY/USD.
4. Get out of both investments at the same time. Your profit on one will cover the loss you take on the other.
Tuesday, April 7, 2015
How to Use Forex Trading Strategies (6 Steps)
1. Study foreign markets and currencies using financial newsletters and the internet (see Resources). A thorough understanding of foreign markets is crucial to success at forex trading strategies.
2. Seek advise from a professional forex trading specialist (see Resources). Following these steps will help start your forex process, but a professional will walk you through the best strategies for you and answer any questions you have.
3. Watch the trading patterns of large corporations that actively use forex trading strategies. Such corporations have a lot of money at risk, so they will use the strongest and most successful strategies.
4. Purchase software that will aid in your forex trading calculations.
5. Find an undervalued foreign currency and, based upon the forex strategies best suited to your goals, make a purchase.
6. Wait for the rate of the foreign currency you purchased to equal that of your own currency. Once the currencies are more level, convert the foreign currency back to your own currency for a profit.
2. Seek advise from a professional forex trading specialist (see Resources). Following these steps will help start your forex process, but a professional will walk you through the best strategies for you and answer any questions you have.
3. Watch the trading patterns of large corporations that actively use forex trading strategies. Such corporations have a lot of money at risk, so they will use the strongest and most successful strategies.
4. Purchase software that will aid in your forex trading calculations.
5. Find an undervalued foreign currency and, based upon the forex strategies best suited to your goals, make a purchase.
6. Wait for the rate of the foreign currency you purchased to equal that of your own currency. Once the currencies are more level, convert the foreign currency back to your own currency for a profit.
Monday, April 6, 2015
How to Raise Money for a FOREX Trading Fund
1. Hire a lawyer to set up the business entities required for this type of project. Typically, when you set up a Forex fund, you need two separate businesses. You need to set up a limited partnership or an LLC for the fund itself and a separate LLC for the management of the fund. This will help you with the liability aspect of setting up this type of fund and make it legal.
2. Create a compelling business plan that you can show to your prospective clients. The business plan should have plenty of visual representations such as charts and graphs as these tend to connect with people more than other displays. Come up with some projections of what investors could expect based on your trading record and how much capital you plan to raise. Create some brochures or other documents that you can pass out to your prospects.
3. Meet with your personal contacts to inform them of the Forex fund that you are starting. If you know people that would potentially be willing to invest in this type of fund, contact them as soon as you can. You never know who would like to get involved in the Forex market but is not quite comfortable enough to go it alone. Show them your business presentation and give them any brochures or documents that you have created.
4. Advertise your Forex fund to increase the number of potential investors that you can bring in. You could advertise online on Forex websites and through pay-per-click marketing. The Forex market is not as widely-known as the stock market or other financial markets, which means you have to advertising specific places for best results.
5. Take the money that you raise from investors and deposit it into your account. Once you have enough money raised, you can begin trading the market as you promised your new clients. Stick to your trading plan and then distribute the profits to your investors accordingly.
2. Create a compelling business plan that you can show to your prospective clients. The business plan should have plenty of visual representations such as charts and graphs as these tend to connect with people more than other displays. Come up with some projections of what investors could expect based on your trading record and how much capital you plan to raise. Create some brochures or other documents that you can pass out to your prospects.
3. Meet with your personal contacts to inform them of the Forex fund that you are starting. If you know people that would potentially be willing to invest in this type of fund, contact them as soon as you can. You never know who would like to get involved in the Forex market but is not quite comfortable enough to go it alone. Show them your business presentation and give them any brochures or documents that you have created.
4. Advertise your Forex fund to increase the number of potential investors that you can bring in. You could advertise online on Forex websites and through pay-per-click marketing. The Forex market is not as widely-known as the stock market or other financial markets, which means you have to advertising specific places for best results.
5. Take the money that you raise from investors and deposit it into your account. Once you have enough money raised, you can begin trading the market as you promised your new clients. Stick to your trading plan and then distribute the profits to your investors accordingly.
Saturday, April 4, 2015
How to Report FOREX Losses
1. Determine whether your realized Forex losses are more or less than $3,000. If they're less than $3000, then you should claim the total amount. If they're more than $3,000, you can only claim $3,000, no matter how much the losses were. Remember, you can only claim up to $1,500 if you're married but filing separate returns.
2. Fill out IRS Schedule D, an IRS form that you can download from the Resources section on this page.
3. Fill out the form with information about the Forex investments you want to claim as gains and losses on your taxes. You should have the net loss calculated when you've completed the form.
4. Fill in the total loss you're claiming on line 13 of IRS Form 1040.
5. Finish your taxes and submit them on time. Your losses should be credited, helping reduce your total amount of taxes owed.
2. Fill out IRS Schedule D, an IRS form that you can download from the Resources section on this page.
3. Fill out the form with information about the Forex investments you want to claim as gains and losses on your taxes. You should have the net loss calculated when you've completed the form.
4. Fill in the total loss you're claiming on line 13 of IRS Form 1040.
5. Finish your taxes and submit them on time. Your losses should be credited, helping reduce your total amount of taxes owed.
Thursday, April 2, 2015
How to Trade FOREX from Just the Daily Charts
1. Log on to a free charting service, such as FreeStockCharts.com. Press the 'New Chart' tab twice and two price charts will pop up on your screen. Designate one as your quotes chart and input all the symbols for the FOREX currency pairs on it. The other price chart will be your price chart that will display the price action for the currency pairs on your quotes chart. Link the two charts by pressing the upper right-hand corner link, which when you scroll down the quotes chart, the price action for the currency pairs will appear one-by-one on the price chart.
2. Click the Indicator tab on your price chart and select the 'Trading Volume' indicator, which will appear on the bottom of the price chart. This indicator will reveal buying or selling volume for the currency pair on the price chart. This will help you gauge demand for the FOREX currency pair and time your entries.
3. Scan through the different currency pairs and take note of any upward trend where price action appears at the bottom left-hand screen of your price chart and travels in the direction of the upper right-hand screen. Mark down any currency pairs that have this type of price action. This will be your high-probability trade list for potential entries.
4. Take note of any contracted price action where the price is trading near the top of its trading high but the price action is trading between two very tight price points. Typically, you want to see this trading range over the course of 13 price bars or higher. Also, you want to see a decline in trading volume which means that traders are not sure whether to take the currency pair higher through more buying and waiting to see what will happen themselves. Take note of the two price points wherever you see this pattern.
5. Prepare to enter the trade when price begins to trade up through the top of this price range on higher volume than the preceding volume bars before price became contracted. Place your stop at the bottom of the price range and take your profits at three times your initial risk.
2. Click the Indicator tab on your price chart and select the 'Trading Volume' indicator, which will appear on the bottom of the price chart. This indicator will reveal buying or selling volume for the currency pair on the price chart. This will help you gauge demand for the FOREX currency pair and time your entries.
3. Scan through the different currency pairs and take note of any upward trend where price action appears at the bottom left-hand screen of your price chart and travels in the direction of the upper right-hand screen. Mark down any currency pairs that have this type of price action. This will be your high-probability trade list for potential entries.
4. Take note of any contracted price action where the price is trading near the top of its trading high but the price action is trading between two very tight price points. Typically, you want to see this trading range over the course of 13 price bars or higher. Also, you want to see a decline in trading volume which means that traders are not sure whether to take the currency pair higher through more buying and waiting to see what will happen themselves. Take note of the two price points wherever you see this pattern.
5. Prepare to enter the trade when price begins to trade up through the top of this price range on higher volume than the preceding volume bars before price became contracted. Place your stop at the bottom of the price range and take your profits at three times your initial risk.
How to Learn Forex Trading (7 Steps)
1. Read about the basics of currency trading, along with the best options for most consumers at Bankrate, a trusted site with a wealth of money and investment advice.
2. Find out about scams that are prevalent in this industry at the Federal Trade Commission (FTC) website. This agency makes regulations to protect consumers from unscrupulous dealers who promise everything and deliver zip. The FTC monitors the industry very closely and issues regular updates on important developments.
3. Sign up for a free practice account at the Forex website. Make virtual currency trades using your free practice account for thirty days. Continue to follow the market as long as necessary for you to understand what you know and what you don't know.
4. Get tips and tricks delivered to you mailbox by TopForexReview. Get news feeds or alerts on topics that may affect the currencies that you are considering trading. Start with only a few currencies, so you can keep track of changes and the possible causes.
5. Join one or two forex traders forums and discuss the trends, problems and traps in the industry. Ask questions in the forums. Most users are friendly and helpful to newbies. Benefit from other people's experiences and develop your game plan before moving forward.
6. Set aside a small sum of real practice cash over a one-month period. Use money that you have already allocated to discretionary income., such as savings from your morning coffee run (get regular instead of latte and pocket the savings), lunch for a month (you'll have to pack lunch) or break open your coin jar and cash in half (not all) at your local grocery change center.
7. Select a reputable currency trading site or broker, after you evaluate recommendations from other traders and investigate them on the FTC website. Try to stick to your budget and the game plan that you made when practicing.
2. Find out about scams that are prevalent in this industry at the Federal Trade Commission (FTC) website. This agency makes regulations to protect consumers from unscrupulous dealers who promise everything and deliver zip. The FTC monitors the industry very closely and issues regular updates on important developments.
3. Sign up for a free practice account at the Forex website. Make virtual currency trades using your free practice account for thirty days. Continue to follow the market as long as necessary for you to understand what you know and what you don't know.
4. Get tips and tricks delivered to you mailbox by TopForexReview. Get news feeds or alerts on topics that may affect the currencies that you are considering trading. Start with only a few currencies, so you can keep track of changes and the possible causes.
5. Join one or two forex traders forums and discuss the trends, problems and traps in the industry. Ask questions in the forums. Most users are friendly and helpful to newbies. Benefit from other people's experiences and develop your game plan before moving forward.
6. Set aside a small sum of real practice cash over a one-month period. Use money that you have already allocated to discretionary income., such as savings from your morning coffee run (get regular instead of latte and pocket the savings), lunch for a month (you'll have to pack lunch) or break open your coin jar and cash in half (not all) at your local grocery change center.
7. Select a reputable currency trading site or broker, after you evaluate recommendations from other traders and investigate them on the FTC website. Try to stick to your budget and the game plan that you made when practicing.
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