How to Invest in Forex Mutual Funds

1. Learn how to read a forex quote. This is a ratio of one currency to another. USD/EUR is the price of a US dollar as expressed in Euros. The currency listed first is the base currency (usually the stronger currency at the time of the quote) and is given a value of 1. The second currency is the counter currency and derives its value in relation to the base. If the USD/EUR quote is 1.21, that means 1 US Dollar has the same value as 1.21 Euros.
2. Understand the definitions of pip and spread. Prices in foreign exchange are expressed in pips--percentage in points. The pip is the number in the fourth place from the decimal point, or 1/100th of 1 percent. If USD/EUR is 1.1300/1.1304, there is a 4-pip spread between the two currencies.
3. Learn about bid and ask. The 'bid' is the selling price for the base currency and the 'ask' is the price to buy the base currency. Both transactions are done simultaneously.
4. Learn about leverage and margin. Leverage is the ability to trade without having to put up the entire amount of the transaction. Margin is the minimum amount required in order to participate in a trade, usually 1 to 2 percent. The forex market allows higher leverage because major currencies are less volatile than stocks; higher leverage also allows amplification of both profit and loss. Because of this, the forex market is more volatile than the stock market.
5. Select a mutual fund. Unlike the stock market, the forex market has tiers of access. An individual investor would find it difficult to gain significant access. Furthermore, in a 24-hour market, it is difficult for individuals to keep track of investments with any degree of vigilance. Most retail investors work through specialized mutual funds. Search online for managed funds to choose from. Your choice will depend on your desired level of risk, the fund's past performance, the fee structure, and restrictions on deposits and withdrawals.

How to Master Forex Trading (5 Steps)

1. Join a Forex trading website. Some websites have a minimum of $200 investment, and some have practice accounts where you can work on your trading skills.
2. Update yourself on terms frequently used in the Forex Trading world, such as 'intraday' and 'overnight position,' which relates to trading times.
3. Study economic and political trends and stay up to date on current events. The best Forex traders have extensive knowledge on trends and other economic traits. This can take some time, but its' rewards are great.
4. Invest in a bot. If you don't want to go deep into studying trends and such, you can buy a bot that recognizes trends and advises when to buy, and sell. You will want a bot that is frequently updated to optimize trading strategies.
5. The last step is to give yourself time to get used to trading. It can take a long time to understand the Foreign Exchange.

How to Identify the Trend in the FOREX Market

1. Open your Forex charting software and create a price chart for any currencies you wish. In Forex, you chart 'currency pairs,' which show an exchange rate between any two currencies.
2. Identify the peaks and valleys on the price chart. These are the 'pivots' where the exchange rate reversed its direction, even if temporarily. For example, if prices are moving higher and then start to decline, this leaves a peak called a 'high.' Similarly, if prices fall and then reverse higher, this forms a 'low.'
3. View the most recent price action on the chart, and find the most recent high that formed. Then identify the previous high that formed before the most recent high. Similarly, find the two most recent lows on the chart. If the chart clearly shows all these as a pattern of 'higher highs and higher lows,' you can safely identify this Forex currency pair as in a solid up trend.
4. Buy into the trend if it shows this up trend pattern. However, if instead you see a pattern of 'lower highs and lower lows,' this is a solid down trend. These simple patterns are the basis of trend recognition techniques, first outlined by Charles Dow in the 'Dow Theory' nearly a century ago. Today, traders continue to use this technique to identify trends.
5. Draw a straight line on the price chart, connecting all the recent lows, if you see what appears as an up trend. These 'trend lines' are an additional aid in identifying trends. If the trend is declining, instead draw a straight line connecting all the highs. In solid trends, it is easy to draw or imagine a straight line on the chart, and some charting software lets you draw directly on the chart.

How to Trade The Forex (5 Steps)

1. FOREX TRAINING
Proper training is key in this fast paced dynamic climate. Training includes understanding charts, forex currency patterns, developing a forex trading system, forex courses, forex forums and more. 6 months to a year should be spent learning your own trading system before investing a dime.
2. FOREX COURSE
As you might imagine, the training opportunities are endless and need to be approached with caution. Everybody thinks they have a system that works and they are ready to share it with you for a fee. Start deciding on a forex course after you have looked at some forex trading websites and learned the basics for free before investing in a forex course. Some forex courses are free from websites.
3. FOREX PIP
Understanding the spread in forex and the pip of currency pairs will help you in choosing an online forex broker. Viewing forex real time quotes is imperative if you are going to trade. The online marketplace is competitive and multiple trading platforms and brokers should be researched prior to signing up.
4. ONLINE TRADING
You will be trading online and in a day trading type style. Once you develop your system and put into place your stop losses, understand charting and devoting time to training you will have a strong foundation to go live with your training.
5. FOREX PLATFORMS
The forex platform is the trading platform that you will be executing your trades with. Each forex trading company has their own platform that operates basically the same but each system will need to be learned by the trader to feel comfortable with the process.

How to Calculate FOREX Rollover Rates (6 Steps)

1. Review the definition of a rollover. All forex spot trades must be settled within two business days. If you would like to extend your position without settling at the end of each trade day you can close your position by 5 p.m. (EST) on the settlement day and reopen the following trading day. This is referred to as a rollover. Traders do this by using a swap agreement.
2. Review how currency is quoted. Currency is quoted in pairs. The first currency is referred to as the base currency, and the second is referred to as the counter currency. The trader borrows money to purchase another currency. Interest is paid on the borrowed currency and earned on the purchased currency. The net is the rollover interest.
3. Obtain the short-term rate of interest for both the base and counter currency. Go to the treasury department of the issuing nation for current short-term rates. It is usually listed on the home page of the website for the treasury.
4. Work through an example. Let's say you purchase 100,000 CAD/USD at a rate of .9155. The short-term interest rate on the Canadian dollar (base currency) is 4.25 percent, and the short term interest rate on the U.S. dollar (counter currency) is 3.5 percent.
5. Set up the calculation. For the rollover rate, subtract the base currency short- term interest rate from the counter currency interest rate.
6. Find the dollar of the interest. Multiply the number of CAD/USD held by the difference between the CAD short-term interest rate and the USD short-term interest rate. Divide this by the product of the rate at which you purchased CAD/USD and 365. The calculation looks like this: {100,000 x (4.25% - 3.5%)}/(365 x 0.9155) and the answer is $224.40.

How to Promote FOREX Products (8 Steps)

1. Present FOREX to individuals as a way to diversify an investment portfolio. Segment invitations based on professional occupations, retirees, young working families with income of certain levels and other key demographic information.
2. Schedule a luncheon topic on doing business overseas for small companies and show how FOREX is used in trade on the international markets. Invite three to five other non-competing businesses to exhibit and invite their own client lists.
3. Provide benefits to small business owners by presenting a series of mini-workshops with presenters from complementary yet non-competing business that offer valuable services. Invite a professional employer organization to present tips on cash flow and request that on handouts they give that they imprint the benefits of trading FOREX for small business owners.
4. Develop internships with undergraduates at local business schools to come learn trading and then assist in the marketing of FOREX products and accounts. Develop a task per week for 12 weeks that will focus on trading basics and, once every two months, have an open house where the students can invite specified family members to try a hands-on approach to learning.
5. Host a free workshop once monthly like a trading club where prospective traders or those wishing to have their accounts managed can come in, open a demo account and trade with assistance at no risk. Explain how, and why, there are different types of accounts as noted in “Forex Basics: Setting Up An Account” by trader David Hunt on the website “Investopedia.”
Promotional Material
1. Design a website that features the reasons to trade FOREX, the benefits and a sign-up page for a free, no-risk demonstration account. Create a PowerPoint or Flash presentation on the website that runs one to two minutes giving an introduction to trading FOREX and how viewers can sign up for a demo account. Build credibility with links to neutral and notable organizations like the American Finance Association.
2. Build a permission-based email list. Send newsletter updates about industry news, personal success stories and latest government figures that impact FOREX.
3. Run ads on shopping carts or in community newspapers circulating in local grocery stores offering people the chance to learn risk-free how to trade money. Write the ad as a way to run a business and earn money part-time.

How to Trade on the Forex Market Using the U.S. Dollar Index

1. Understand that the U.S. dollar index is a measure of the relative strength of the U.S. dollar in comparison to other major currencies. It is calculated using a trade-weighted index methodology, which is similar to the way most market indexes are calculated.
2. Understand how the index is calculated. The index factors in the exchange rates for six major world currencies: euro, yen, cad, pounds, krona, and Swiss francs.
3. Understand how to interpret the index.The index was started at a base of 100 in 1973. An index value of 130 suggests that the U.S. dollar has increased by 20 percent in value since 1973.
4. Use the U.S. dollar index value to help provide information about the direction of a particular currency. Look at the 52-week high and low for the index. Take note of the date of the high and low and where they are in contrast to the current price.
5. Chart a moving average of the index over the past three months and then chart another moving average over six months and 12 months. The three-month chart will be more volatile than the six-month; likewise the six-month chart will be more volatile than the 12-month chart.
6. Use the moving average charts of the index to find buy and sell points. When the three-month chart breaks out of the six- or 12-month moving average line it can be used as a signal to enter or exit the market depending on your strategy.

How to Be Successful in FOREX (5 Steps)

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.

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.

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!

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.

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.

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.

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.

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.

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.

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.

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.

How to Avoid Whipsaw FOREX

1. Measure trend strength before you buy. Add the ADX indicator to your Forex price chart -- this indicator can be found in your chart indicator list. An ADX reading of 30 or higher indicates a strong price trend.
2.
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Buy near strong price support. Support is the price level where demand is strongest. Using the drawing tool on your chart software, draw a line connecting recent price bottoms. This line represents price support.
3. Place a protective sell stop order below price support. A sell stop order is an order you place with your broker to sell at the price you indicate. This protects you from further loss if the price breaks through support.
4. Measure volume. When your trading system gives you a buy signal, did trading volume increase? Increased trading volume indicates broad investor participation in the price move. If volume is low, a whipsaw may be more likely to occur, so avoid taking the trade.
5. Check the news. Is the government meeting to decide on interest rates? Is there an election? Are there other potential market-moving events taking place? Whipsaws often occur in response to news events.
6. Use a wider stop order percentage. It is not possible to find the perfect price to buy. Give yourself some room for error by placing your protective stop order at least 3 percent below your buy price.

How to Invest in FOREX Trading

1. Find the way to start forex trading that best suits your needs. There are a few ways that you can participate in the forex markets. You can invest your money yourself, you can buy a software robot or EA (expert adviser) that will trade your account for you, you can buy automated trading signals and tie it into your account or you can buy manual signals and trade them yourself.
2. Learn to invest in forex on your won. This is the most challenging way to do it. Expect to take two to three years before you become proficient. This is a long and challenging journey, so be prepared to work hard. A good place to start is at BabyPips. This is a free course that will give you most of the basics for forex investing and will even delve into some of the more advanced methods. Another way to learn is to be mentored by professional forex traders. ForexMentor and FX500Club are both good places to start. These courses will teach you things such as which currency pairs to trade, the best times to trade, how to use support and resistance, money management and much more. These courses range in price from free to $1,800 as of 2010.
3. Buy automated trading signals. You can find services that will provide you with both automated forex signals. The advantage of the automated ones is that you never have to touch them. You simply sync your account with the signal provider and their trades are automatically executed in your account. A few places to find automated signals are at ZipSignals, ZuluTrade, and Tradency. These range in price from $50 to $400 per month as of 2010.
4. Buy manual signals. There are plenty of websites that will provide you trading signals via email or text message. You can find ratings for dozens of services along with reviews from subscribers at trading forums such as ForexPeaceArmy, EliteTrader and Trade2Win. The biggest drawback to going this route is that the forex markets are 24 hours, which means you will have to be ready to execute a trade at any time. This also means that you are likely to miss lots of trades if the market moves before you are able to get to your computer. However, if you are more of a hands-on type and don't trust automated signals, this might be a good alternative. These services range in price from $50 to $250 as of 2010.
5. Buy a forex expert adviser (EA). These are automated systems that run on the MetaTrader forex trading software platform. While marketers will tout these as having no losses and winning 90 percent of the time, they don't always give you the whole picture. What they often don't tell you is that they may be risking 100 pips to win 10 pips. That means that they can win nine times out of 10 and still end up losing money. Dozens of these trading robots are available. Many work in the short term but over the long term may lose money. A good place to find reviews on them are ForexPeaceArmy, EliteTrader and Trade2Win. If you do decide to purchase one of these, run it on a demo account for at least two months and purchase only one that offers a 60-day money-back guarantee. These robot traders range in price from $67 to $299 as of 2010.

How to Trade the Forex With Fractals (5 Steps)

1. Look at a candlestick or bar chart in any trading platform or other charting software. Identify any areas where price reversed to the up-side or down-side.
2. Compare these turning points with two bars on each side of the reversal. A down fractal pattern exists if it presents a high point in the middle of the pattern with two lower highs on both sides. Similarly, a five-bar pattern with the lowest point in the middle and higher lows on each side represents a bullish fractal with an expected reversal to the up-side.
3. Combine the implication of the fractal pattern with another technical indicator for verification. Investopedia notes the popularity of the 'Alligator indicator' for use with fractal patterns. This tool is based on a set of three moving averages. Fractal signals which occur above or below the center line in this system are considered valid, while other fractal signals are ignored. For example, a bullish turning point that displays below the 'alligator's teeth' (the center line) carries more weight than one which does not coincide with this additional signal.
4. Implement an additional technical indicator to provide the most valid confirmation of the fractal pattern. A common indicator which works well in fractal analysis is the Fibonacci tool. This chart study applies ratio analysis to determine extreme price swings. When a bearish fractal turning point appears at a high Fibonacci extreme, the implication is particularly powerful. Some traders use both moving averages and Fibonacci levels with fractals to offer fewer, but more reliable, trading signals.
5. Draw a trend line between fractal pattern centers to analyze overall market structure. The traditional 'Dow Theory' introduced by Charles Dow in the 19th century simply states that an uptrend is characterized by higher highs and higher lows. By only using highs and lows that are generated by true five-bar fractal patterns, the clarity of a trend line is more obvious This makes it particularly easy to identify the strength of a trend and when the trend may slow or stop due to a break in the line.

How to Predict FOREX Fractals (5 Steps)

1. Load a forex chart of any currency pair. The fractal indicator is a basic chart pattern that applies to any investment instrument on any time frame. Configure the chart for the currencies you wish to trade.
2. Educate yourself on the characteristics of a fractal pattern. A minimum of five bars is necessary and the middle bar must be the highest or lowest price point of the group. Adjacent bars to this extreme must exhibit a stairstep-like pattern where each bar further away from the middle is a lower high or a higher low.
3. Identify fractals in past price action. These are usually visible at turning points in an overall trend. When price reaches a high point and begins to fall back, a fractal pattern may form.
4. Add other indicators to the price chart. Fractals appear in oversold or overbought conditions, leading to a reversal. A fractal on its own can indicate a turning point only after the reversal has occurred and the pattern played out. Additional indicators can prepare the trader for the upcoming appearance of a fractal pattern by identifying the conditions that often cause this pattern. A popular indicator for this purpose is the 'Alligator' study. Many traders only follow a fractal pattern that occurs in conjunction with conditions of the Alligator. This study is comprised of three moving averages. A fractal outside these bands is more valid due to the extreme conditions necessary for price to trace to these areas. When price is trading outside the Alligator, fractals are more likely and predictable.
5. Draw a trend line of price action. By joining the highs or lows of previous fractals, it is possible to visualize price points in the future where a new fractal formation will materialize. Fractals that form along a trend line are often very strong signals.

How to Send FOREX Boxes to the Philippines

1. Go to an Asian food market and select the shipping container you need from the Junior, Regular or Premium sizes; or, call FOREX toll free at 800-883-6739 and ask it to deliver a container to you.
2. Pack and label the box at home, following the FOREX instructions on the box. Prohibited items include firearms, ammunition, illegal drugs, perishables, combustibles/flammable items, chemicals, and very fragile items.
3. Call FOREX and arrange for a pickup date.
4. Pay the FOREX delivery person via check, credit card or cash.

How to Make Money Trading Forex From Home (6 Steps)

1. Determine how much you can reasonably invest in forex trading by documenting your income, then subtracting all of your monthly expenses including loan payments, groceries, credit card payments, utilities, child care expenses, entertainment and child support or alimony payments. Forex poses the risk of loss as well as the potential for financial gain, so avoid investing money that you cannot afford to lose.
2. Research the forex trading system through online and offline resources to learn how the system works, and how you can use strategies to maximize your potential for gain.
3. Open a demo account with a forex broker online. A demo account allows you to make practice trades using live data, but does not involve using real money. Practicing trades with a demo account can help you refine your decision-making skills and trading strategies.
4. Open and fund a live forex account with an online broker. Make several small trades using your own money to test your strategies.
5. Choose the forex broker's margin option to increase your trading power. A margin option allows you to invest as much as $100 of borrowed money for each dollar of your own money. This allows you to make large trades that can generate sizeable profits from a small currency fluctuation; however, it can also put you in debt to the broker if you lose money on your trades.
6. Use a forex trading robot to handle trades when you are not available to actively monitor currency fluctuations. A forex trading robot can automatically make trades based on the parameters you set.

How to Become a Forex Manager

1. Hire a lawyer specializing in securities law, and instruct him to draft the private placement memorandum (PPM), partnership agreement and subscription agreement. A PPM is an offer of investment to private, rather than public investors, and must be presented to anyone you manage to get interested in your fund. The partnership and subscription agreements are signed to finalize the agreement between you and your investors.
2. Approach your friends, colleagues and family members about investing in your fund. You are not permitted to advertise a forex fund, you must recruit investors from amongst people you know personally. You may want to show potential investors results from your private forex account to prove that you are adept at currency trading.
3. Register with the National Futures Association (NFA) to become a Commodity Pool Operator. Before you can begin running your forex fund, you need to pass the National Commodity Futures Exam (NCFE) and Retail Off-Exchange Forex Examination, submit to a criminal background check with the FBA and pay a $200 registration fee.
4. Register your fund with the Commodity Futures Trading Commission (CFTC). The CFTC is the United States government's regulatory body responsible for oversight and regulation of commodities and futures markets. You must pay a small registration fee and be approved as an intermediary if you want to trade commodities or futures (see Resources). Even if you have no immediate intention of trading futures, you should register to take advantage of the wider range of opportunities presented by being able to do so.
5. File a disclosure statement with the NFA no more than 21 days before the launch of your fund. This statement should include a risk disclosure, a discussion of your trading strategy, a discussion of your fee and a description of your qualifications as a trader. This must be given to all prospective investors in your fund, in addition to being filed with the NFA.

How to Use Excel to Trade FOREX (5 Steps)

1. Pick the currency pair or pairs that you intend to trade. In FOREX, currencies are traded in pairs. The first currency is called the base currency and the second currency is called the quote currency. For example, a EUR/USD currency pair tracks the value of a euro quoted in U.S. dollars.
2. Obtain relevant information about the currency pair or pairs you identified in Step 1. The most important information is the price, but you can use other information as well. Other factors to consider include trading volume, open interest and a moving average of the price.
3. Open a new Excel spreadsheet and input the information you obtained in Step 2. Input the data in either rows or columns, and use one row or column per data type. For example, if you input the data in columns, use one for price, another for volume and so on.
4. Use the graph feature in Excel to create graphs of your data. There are several ways to do this step. Highlight one column at a time to create separate graphs for each data set, or highlight all the data to create a graph featuring all of the data sets.
5. Use the graphs to aid you in making trading decisions. Once you have a graph of prices, look for patterns such as double tops or bottoms that indicate possible market reversals. If you graph trading volume, look at rising and falling volume in contrast to the price information, to determine the strength of price moves.

How to Close a FOREX Account (4 Steps)

1. Examine your trading platform to determine if you have any open trades outstanding. If you are a long-term trader, you might have some FOREX trades still open. Decide how you want to dispose of open trades -- closing them out or transferring them to another broker.
2. Get an account termination form from your FOREX broker. Depending on the broker, you may be able to access the form directly from a website. Many brokers make such forms available from the references section of their websites. You can download the form and print at your convenience. Other brokers make it more difficult to find the form you need. You might need to call a customer service representative and request a form via e-mail or fax.
3. Complete the form. In addition to providing your contact information, you will have to specify how you want any remaining money returned. For example, if you fund your account with a credit card, the broker will process a refund on your credit card for the amount you have in your account. You will usually have to sign the form at the bottom to authorize the closure.
4. Submit the form to your broker in the requested method. Typically, the broker’s fax number or e-mail is listed on the bottom of the form. Usually you can simply scan the form and e-mail it from your computer — the fastest way to return the form. At that point, you simply have to wait to get your money back and your account will be closed.

How to Make Consistent Profit from FOREX Trading

1. Select a style of trading. There are a number of ways to trade the FOREX markets. How you choose to participate will be influenced by how much money you have to invest, how tolerant you are of risk, and how much time you want to devote to trading foreign currencies. The different styles of trading include:
1)Scalping–frequent, very short duration (usually less than five minutes) trades that each try to eke out a a small profit.
2)Day trading–positions are opened and closed within the same 24-hour period. Traders attempt larger profits per trade compared to those achieved by scalpers, but day traders also assume higher risks than do scalpers.
3)Trend trading–positions are held for days or weeks, and are geared to profit from the primary trend of a currency.
4)Carry trade–a technique to buy high-yield currencies and sell low-yield ones. Carry trades can last for months, and are centered on earning interest income, not capital gains.
5)Derivatives trading–FOREX options and futures can be used as surrogates to or adjuncts of direct currency trading. Through proper hedging techniques, traders can control the amount of risk they undertake with this form of trading.
2. Devise a trading strategy appropriate to your trading style. Short term traders rely almost exclusively on technical analysis–the use of previous prices to predict future ones–whereas longer-term traders also use fundamental analysis, which is the effect of economic and political events on the FOREX market. There are many technical analysis techniques that can be back-tested against previous trade data and refined through hypothetical trading. You should research the techniques that are reported to work and personally verify the claims before adopting any strategy.
3. Place protected trades. Disciplined money management requires that when you place a trade due to some signal from your trading strategy, always specify three prices: 1) the entry price–how much you are willing to spend on the trade; 2) the stop-loss price–how much you are willing to lose on a trade before closing out the position; and 3) the take-profit price–the amount of profit you require before partially or fully closing out the position. The closer you set your stop -oss price to the entry price, the more likely you are to be stopped out. This is the fundamental trade-off between profits and safety, and each trader must personally work out a satisfactory balance.

How to Backtest FOREX (3 Steps)

1. Install spreadsheet software, such as Microsoft Excel or Open Office, and use the program's features to analyze price information with your own trading strategy. Before any spreadsheet analysis may be done, you must acquire a historical database of Forex data for import into the spreadsheet. This is available from services such as Optimal Trader and GetRates. Once the historical data is in the spreadsheet software, utilize formula features that resemble your trading strategy. Most strategies are based on 'if..else' conditional tests. For example, a strategy may be described as 'if the price of this bar ends higher than the previous three bars then buy into the market.' While this is a simple strategy, even more complex ideas can be translated into formulas inside the spreadsheet program. Then you can quickly scan an entire price history to see how the strategy would have behaved.
2. Subscribe to the TradeStation strategy and backtesting platform if you want a comprehensive all-in-one solution to your Forex trading needs. TradeStation is a broker that also provides advanced software for real-time trading. But the platform includes the ability to create your own custom Forex strategies and then backtest them against a large historical database. This obviates the hassle of acquiring a Forex database independently and then translating your strategy into a spreadsheet. TradeStation is built on the 'EasyLanguage' programming language. This language is a simplified version of other programming languages designed for anyone to learn quickly. The backtesting system applies the EasyLanguage strategy against many years of Forex data and provides concrete results showing the number of profitable trades versus losing positions and the overall percentage returns of the strategy.
3. Register for the Multicharts platform for advanced backtesting features. Multicharts is available in two versions, but the 'MCFX' system contains a seven-year backtesting database specifically for Forex traders. These two programs use the 'PowerLanguage' system, which is nearly identical to 'EasyLanguage,' thus providing seasoned TradeStation users with an alternative to their backtesting without a new learning curve. MCFX is not a broker system, however, so real-time trading is not possible without involvement of a third-party firm. However MCFX does connect with some broker platforms to allow seamless trading of strategies that are successfully backtested.

How to Trade Candlesticks on Forex

1. Identify 'engulfing' candles. Such a candle is the opposite color of the candle that immediately precedes it. Additionally, the length of the engulfing candle is greater than the length of the previous candle, with the high and low prices extending beyond, or 'engulfing,' the high and low prices of the previous candle.
2. Buy into the Forex market if the engulfing candle is green, with its closing price higher than its opening price. This suggests the market is strongly biased toward further upward movement, since the price action took out the prior candle's trading range while also closing near its highest price.
3. Sell into the Forex market if the engulfing candle is red. This is opposite of a green engulfing candle and suggests a strong negative or 'bearish' bias. Engulfing candles often appear at major trend reversals, or after a pause in an existing trend.
Pin Bars
1. Identify candles where the open and closing prices are near each other, but a long candle wick or shadow extends in one direction from these prices. Such candles resemble 'push pins' or 'tacks,' hence their name. A pin bar visually demonstrates considerable volatility even though price ended nearly unchanged from their start.
2. Buy into a Forex market if the candle's shadow extends below the body. Such a pin bar demonstrates that while prices traded down considerably, the market rejected the trading range and was unable to remain at those prices. Such price rejection is likely to continue, leading away from that area.
3. Sell into a Forex market if the pin bar's shadow extends above the candle's body. This may occur near the end of a major up trend. The pin bar shows that the market rejected rising prices and closed close to the low of the day. This may signal a continuation to lower Forex prices.

How to Make Millions Trading the Forex Markets with just $20!

1. Read articles and watch videos that train and educate new Forex traders. Consider your research as a self-study experience that will help you understand which factors affect money markets and how to interpret those factors to inform your trading and investing decisions. Some online brokers, such as Gain Capital Holdings and Global Futures & Forex, offer practice trading accounts that allow new traders to simulate live Forex trading in order to pair theoretical Forex knowledge with real-time trading experience.
2. Determine the amount of money you can afford to invest and the amount of financial risk you are willing to tolerate. Instead of just $20, forex brokers Gain Capital Holdings and Global Futures & Forex require their clients to open accounts with at least $2,500, so trade only with money you an afford to lose. When discerning your risk tolerance, Wells Fargo recommends assessing the types of investments you already make, how you react to investment losses and your comfort with uncertain investments.
3. Test yourself to ensure you understand the basic terms and concepts associated with Forex trading. After boning-up on Forex terminology and concepts -- such as currency pairs, which is the exchange rate between two currencies, and pips, which measure the percentage by which that exchange rate can change -- identify profitable Forex trades that also fit your investment style. Understanding the basics of currency market investing ensures you begin your trading endeavors on firm ground.
Putting your Knowledge to Work
1. Open a live trading account, one that invests real money on real markets, and make a few investments. Because currency pairs change in value quickly, keep a close watch on your Forex investments to avoid losing money or missing an opportunity to profit. Many online brokers offer tools, such as email notifications, applications for mobile devices and even automatic trading, to help their clients stay abreast of their Forex investments.
2. Establish your trading goals and restrictions clearly and stick to them throughout the course of executing your trades. Goals help investors stay on track and avoid making impulsive or poorly informed trading decisions. Websites, blogs and news outlets are teeming with advice to help people make money investing, but, if the advice seems too good to be true, and if it does not fit into your investing plan, it is best to ignore the hype.
3. Research current and prospective investments continually. Understand why you make one investment while avoiding another and note which factors these decisions have in common, then apply this observation to future trading decisions. Forex trading is an active investment strategy, which means traders try to outpace the market and position themselves for profit once it moves; to be well positioned, understand how market trends and your investment style can work together to create a profit.
4. Evaluate the performance of your investments, then reposition yourself to keep ahead of the curve. Stick to your goals but don't be afraid to redirect your trading activity based on the success or failure of specific strategies. In the end, you may not make millions and you may invest more than $20, but a solid grasp of currency market fundamentals will help you to begin trading wisely.

How to Start a Forex Day Trading Business From Home

1. Start an online course that provides integrated online trading techniques with basic currency education. ForexTrading.com offers students a free demo of their forex training programs, covering topics that include how to analyze forex markets, the fundamentals of trading and how to control risk.
2. Open an account through the same website where you trained, and begin making small trades, also known as mini trades. Other popular sites that offer forex training and trade portals geared toward newcomers to the industry include the Forex Club and FX Bootcamp.
3. Register with an online broker, such as Forex Booker, to avoid having to download software platforms, deposit advances into trading accounts and keep a filing system of all your trades. Brokers provide these services for a commission or a straight account maintenance fee. Forex brokers can act as technical advisers and administrators for your business, leaving you free to study the markets and make trade decisions.
4. Participate in forex blogs and forums, such as Babypips.com and Forex Blog.org, to keep up with news affecting foreign currency and political climates that affect trade. Subscribe to a variety of information feeds and newsletters to stay updated on movement in the international currency markets, Wall Street reactions to political activity and financial reports from banking and financial institutions.
5. Continue with your online education to gain a solid understanding of foreign markets, international trends and financial accounting practices. An undergraduate degree in finance or Master of Business Administration (MBA) can increase your odds of success in forex trading.

How to Read Forex Charts

1. Locate a currency chart to analyze. You can find free charts online or you can use those available through your forex trading platform.
2. Find the range. Currency charts reflect both very short periods, like 12 to 24 hours, or long periods of weeks and months. Beginning traders may find it easier to understand charts that show a range of at least one day, but no more than a week.
3. Identify the chart type. It is a bar chart if price ranges are indicated with vertical bars, and a candlestick chart if price ranges are identified by vertical rectangles. If there are no bars or rectangles, you have a line graph. Most charts are available in several forms, so switch to the bar or candlestick mode for easiest interpretation.
4. Begin with a single data bar to understand the information provided. Every bar or candlestick chart has a single vertical line that shows the highest rate of the day at the top point and the lowest rate of the day at the bottom point. Most charts show these values as you mouse over the top and bottom of the bar.
5. Locate the open and close prices indicated by horizontal 'pegs' on the bar chart and by the top and bottom of the rectangle on a candlestick chart. If the open rate is lower than the close rate, the rate is trending up and the bar or rectangle will usually be green. If the open is higher than the close, the rate is trending down -- typically indicated by red. Colors may vary somewhat, but you'll always have one color for upward movement and a different one for downward movement. This makes it easier to spot trends.
6. Pull out from your single-point view and look at the chart as a whole. You'll now notice groups of mostly green bars moving in an upward direction and groups of red bars moving in a downward direction. These are trends, and they can help you determine when to buy and sell.
7. Note places where the chart hits a low several times, but does not drop below a certain rate. These are places of support, where market forces keep a rate from plunging.
8. Locate places in the chart of several highs in the same range, but do not go above a particular point. These indicate resistance, or rates that the market senses are too high. Note that both support and resistance can break, but it usually requires a change in some external factor, like negative or positive economic news.

How to Make 10 PIP Trades in FOREX (4 Steps)

1. Trade from an intra-day chart. The goal of capturing 10 pips of profit per trade is suitable for a short term day-trading strategy. As such, you should use an intra-day chart to plan entries and exits for your trade. Some examples of charts to use are a 15-minute, 5-minute or even a 1-minute chart.
2. Decrease your drawdown as much as possible. Drawdown is a term describing the amount of paper losses you incur before a position turns profitable. While some drawdown is acceptable for medium- and long-term trades, you must aggressively cut your losses and eliminate drawdown when making intraday trades.Effectively, this means that you need to precisely time entries and exits on your trades. Some popular methods traders use to accomplish this goal include support and resistance levels, candlestick charting and trend lines. Many traders also incorporate indicators such as the MACD, Stochastics and RSI. No matter which strategies you use, you need to time your trades as precisely as possible and cut losses immediately when a trade moves against you.
3. Use a trailing stop loss. The trailing stop loss is an essential tool to use when making intraday trades because it automatically cuts losses and locks in profits as a trade moves in your favor. Whenever you enter a trade, enter a trailing stop loss close to your entry level. This will prevent you from ever taking a big loss in the market.
4. Exit the market when you reach your goal. In this scenario your goal is 10 pips, but you may have to make a little over 10 pips to compensate for the spread. For example, if your Forex broker offers a 2 pip spread on the EUR/USD (euro/dollar), you need to make 12 pips on a trade to achieve a 10 pip net profit. One technique for exiting trades is to move your stop loss up to lock in your profit goal rather than exiting the trade. This protects you from giving back some of your profits while allowing you to book additional profits if the market continues to move in your favor.

How to Become a Forex Broker (4 Steps)

1. Understand the Foreign Exchange Market. Read every web article and book you can to make sure you fully comprehend the workings, mechanisms and the players in the Forex market. Obtain a strong command of the various sub-disciplines that play a role in currency trading, such as macro-economics and technical analysis. Be fully checked out in modern Forex nomenclature and jargon, pricing and order conventions and all the basics of what you can expect to encounter when helping traders decide on and broker their transactions.
2. Get a feel for what a Forex broker does in today's trading environment. Find practicing or retired Forex brokers to talk to about the requirements of the job and the day-to-day routines. If you don't know or can't find any in the real world, online Forex discussion groups are often an excellent venue for either locating them or finding people who can help you locate them. Be aware that with the advance of technology, the job of today's Forex broker is considerably more preoccupied with information technology than it was even 10 years ago. Many retail traders trade Forex almost entirely online, without the input of a broker. In this case, brokers are often relegated to ensuring the client's software platforms are operating soundly, their orders are being processed expeditiously and the firm's own pricing algorithms are maintaining an appropriate bid/ask spread, upon which the company depends for revenue.
3. Get your professional certification. Forex brokers are grouped in with futures and commodity brokers and are typically required to pass the National Association of Securities Dealers Series 3 test. You can find and order comprehensive preparatory material for this test online but to take the actual test you'll have to be sponsored by a licensed futures brokerage firm. There are no explicit educational requirements for being a Forex broker, but a college degree in business or economics would enhance your chances of getting hired.
4. Pursue a job. Decide on whether you would like to try to get hired by a large financial institution, in which case you'll probably have more stability but will have to start out lower on the employment ladder, or if you'd like to join a smaller retail brokerage firm in which you might have more responsibility to start off with, but don't have the presumed stability of a large institution. Be aware that some Forex brokerages have merged with futures brokerages and that to become a broker for one of these hybrid firms you'd probably have to accumulate additional licenses or certifications specific to the futures industry, under the purview of the Commodity Futures Trading Commission. Also, be sure to stay away from shady bucket-shop style Forex firms that are not transparent about their ownership or the nature of their operations and promise their clients unrealistically high returns or non-existent safety guarantees.

How to Trade FOREX Channels (5 Steps)

1. Understand channels and their variations. Channels are constructed by drawing straight lines at an angle connecting the highs and lows on a particular chart, forming a band between which prices often trade. Other forms of channels are mathematically calculated from price and volatility data, and form an envelope around the price of a particular pair, with the high end denoting an overbought extreme, and the low end denoting an oversold extreme. Such channels are called linear regression lines, Bollinger Bands, and Keltner Channels.
2. Settle on a trading timeframe. Most Forex participants trade on an intraday basis, using 5-minute, 15-minute, or 60-miunte charts. Each chart obviously looks different. If you trade channels on a 5-minute chart, the range and depth of price movement is considerably more constricted than if you trade on a 60-minute chart or longer. The timeframe you elect to trade will both affect the primary technical picture you see, as well as how you will need to adjust your profit expectations and stop loss safeguards.
3. Trade bounces off of channel highs or lows. Many traders combine this strategy with indicators called 'oscillators' as part of a short-tem countertrend strategy. A particular advantage of countertrend strategies is that most of the time Forex prices tend to churn in a relatively narrow range, bouncing off lower and upper channels. This creates many short-term, high probability trades. The disadvantage is that when prices do eventually breakout to the upside or downside, they move very strongly, and getting caught on the opposite side can lead to large losses.
4. Trade channel breakouts. As soon as a price bar closes above the upper channel line, buy immediately at the open of the next price bar. This strategy will be unsuccessful far more often than a countertrend strategy, but when it's right and you catch a big move, the profits from one successful trade can more than pay for three or four losing trades. Channel breakouts tend to be most successful if you buy into them after a prolonged stretch of particularly narrow range trading. When buying a channel breakout, you might also wait for a retest of the upper channel before buying to get a better price.
5. Observe other technical factors that compliment channel analysis. The most important are trend, support and resistance, and range. Typically, when Forex prices compress and coil into a particularly narrow range channel, there will soon be a large breakout move, either up or down. Conversely, after a big range move, prices tend to bounce around in a new narrow range before either continuing or reversing the previous trend. Be aware of the broader conditions affecting the Forex pair you are trading, and use channels to augment your overall analysis.

How to Use Live Forex Bar Charts (5 Steps)

1. Use a live Forex chart online service to plot your currencies before trading. These charts are generally free and they provide live currency quotes to the minute. Choose your currency name and the pricing frequency desired. For example for minute by minute prices on the dollar and euro pairing; use USDEURO and choose the minute frequency. You can also choose one currency only. The bar chart will be plotted with a vertical axis (for frequency) and a horizontal axis (for prices).
2.
Find the currency 'Support' level on the live Forex chart. To do this, find the lowest price on the bar graph that the currency has dropped to over several times. This price is generally a buy signal for traders. This is interpreted as the currency support level; in technical analysis the currency is not expected to fall below this price for the near term. This is also a signal that there are more buyers than sellers in the market for the currency.
3. Look for the currency or the currency pair 'Resistance' level on the live bar chart. Look for the highest price the currency has traded over several time. This point in technical analysis is a sell signal because it is assumed that there are more sellers than buyers.
4.
Learn to recognize currency trading patterns on the bar charts. Use various historical Forex charts to study and spot price patterns. Historical prices can be obtained for any day in the past. Compare a few of these bar charts and identify uniformity in the currency support and resistance levels. The more you practice this, the easier patterns recognition becomes.
5. Remember that currency prices are not always predictable, expect breakaway points. These are the points when the currency breaks from the previous support or resistance levels to form new patterns. When the currency leaves an old price bottom or top and moves to a new point not returning to the old price, it is likely setting a new trading level.

How to Calculate FOREX Margin (4 Steps)

1. Determine the total transaction (notional) value. Let's say you wish to trade one 'lot.' A lot is 100,000 units in any currency. For instance, the quote 100,000 EUR (euro) / USD (U.S. dollar) is equivalent to 100,000 euros.
2. Determine the margin requirement. This is the amount of money you are required to put up in order to make a trade, and is referred to as 'margin requirement' by the forex broker. Let's say your broker requires 1 percent of the transaction amount before you can trade.
3. Determine the Forex margin. Multiply the margin requirement by the transaction value. The calculation is 100,000 x 0.01 = $1,000.
4. Calculate margin-based leverage. Divide total value of the transaction (notional) by the forex margin. The calculation is: 100,000 / 1,000 = 100:1 or 100 to 1.

How to Join FOREX

1. Identify a Forex broker you wish to consider. There are hundreds of Forex brokers available, and all the reputable ones offer free demo accounts to prospective clients. This is an important part of the process of joining the Forex market. If a broker does not provide a demo, skip it and look at another.
2. Open a demo account with the broker of your choice. While many brokers provide this service, it is recommended that you open only one demo account at a time. Most demo accounts are fully funded with fake capital and provide access for two to four weeks.
3. Download and install the Forex trading software for the broker you will demo. Open the program after installation and begin trading at any time. The market is open 24 hours a day, so you will see prices fluctuate immediately.
4. Trade currency in the Forex demo account. This serves two important purposes. It offers you an opportunity to develop trading skills before committing real money. This is essential for traders who are new to Forex. Secondly, you can asses the broker's trading platform and features to see if they meet your needs. All Forex platforms are proprietary, and each broker offers different software. As you try different platforms, you will quickly see which interface is easiest for you to use.
5. Open demo accounts with other Forex brokers as needed after your simulation account expires. You can realistically continue to try different Forex brokers for many months before opening a real account. This may be necessary for new traders who need experience simulating before deciding if the Forex market is right for them.
6. Identify a broker that offers the kind of leverage your require once you are ready to open a real account. A standard brokerage account requires that all trades include a minimum of 100,000 units of the traded currency. This requires considerable capital. A 'mini' Forex account reduces this amount to 10,000 units, while a 'micro' Forex account requires only 1 percent the trade size and startup capital. Micro Forex accounts are relatively safe and can be opened for only $25 in some cases. You may choose the broker you most enjoy from your simulation experience or one that meets your minimum risk requirements before opening a real account under your name.
7. Sign up for an account using the broker's online application. This process takes only minutes.
8. Fund the account once the application is approved and account is opened.
9. Download and install that broker's trading software if you do not already have it on your system. You have now joined the Forex market and are ready to participate in currency trading using real money.

How to Start Trading Forex Online (4 Steps)

1. Open a Forex Trading AccountOpen a forex trading account online at a reputable company. Forex trading companies are usually different from stock brokerage companies. You cannot trade currency on a stock trading account.You will need a minimum amount of cash to open a forex trading account. The minimum is normally about $500, but each company has their own policy.Do not start live trading until you have completed a training course and practiced trading for at least three months.
2. Take Free Online Training CoursesTake a free training course online that will take you step by step through trading currencies online. There are many websites that can help you learn how to trade forex even for beginners.You will need to understand how to buy and sell currency and how to read the indicators and charts.
3. Practice TradingPractice trading in a practice account. Make sure that you are in your practice account and not trading actual funds. One indicator is that you normally have about $50,000 to practice trading with in a practice account. Your normal account will only have the funds that you have placed inside it.Knowing how to start trading forex online will help you to bring in extra funds during this weak economy.
4. Find a MentorFind a mentor online that you can go to each day for a daily update of their forex predictions. They will let you know what currencies they are buying and selling that day and where you should place your stops or buy and sell orders.You can sell currencies short and buy to cover just like you would with stocks. Currency trading accounts will automatically sell your currencies if your account is about to go into a negative balance. Never trade more than you can afford to lose. Only put an amount into your account that you can afford to lose, once it is in your account it may bet used up if your currency goes in the wrong direction. Trade with caution.

How to Trade in Forex for Dummies (4 Steps)

1. Review the definition of a currency pair. Currencies are traded in pairs, that is, two different currencies. The first currency is the transaction currency and the second is the payment currency. The quotation tells us how many units of the payment currency are needed in order to buy one unit of the transaction currency.
2. Understand how currency prices move. Let's say you want to trade EUR/USD. If the current quote for EUR/USD is 1.2400, it means that one EUR is exchanged for 1.24 US dollars. If the quote moves to 1.2410, it means the euro is getting stronger against the dollar. However, if the quote moves to 1.2390, it means the euro is getting weaker against the dollar.
3. Choose a broker with low spreads, a strong reputation and extensive tools. There are as many Forex brokers are there are different types of currency. Look for low spreads, which is the difference between the price the currency can be sold and bought at (also known as bid or ask price). Forex brokers don't charge commission and this difference is how they make money. Look for a quality institution. Your broker should be registered with the Futures Commission Merchant (FCM) and regulated by the Commodity Futures Commission (CFTC). Finally, look for an extensive tool-set offering. Download a few versions of Forex trading software from different brokers before funding your account. Play around with the tools and request a virtual trading account to test the trades.
4. Sign up for a Forex account. You can fund your account using a credit card, money order or wire. Signing up is the same as getting an equity account, however you will need to sign a margin agreement. The spreads are so small on Forex that it takes a great deal of capital in order to trade profitably. It is not unusual for Forex accounts to be leveraged 50 times (this is the same as borrowing money). Once you register, be mindful of how much your account is margined. If your trade suffers a loss that takes your position into negative territory, it will be automatically closed. Start off with no leverage and work your way up to 20 times. This will make it easier to understand the effect it has on your trades.

How to Use RSI 9 on FOREX (5 Steps)

1. Calculate the nine-day decay factor (DF) for an exponential moving average (EMA). An EMA uses a series of values in a manner such that newer values have an exponentially greater impact on the average. The nine-day DF, which specifies how fast impact falls away, is equal to 2/(N+1) = 2(9+1) = 0.2, where N is the number of days.
2. Compute the exponential moving average (EMA) for the previous nine 'up' periods (opening prices below closing prices). Each period's closing price is designated by Yt, where t is equal to one through nine. The nine-day EMA (S) is equal to DF
Yt + (1 – DF)
(the previous period’s S), or 0.2
Yt + 0.8
(previous S). You start with two days and reiterate the formula until you get the nine-day solution.
3. Perform the same calculation using the nine previous 'down' periods (opening prices above closing prices). You now have two EMA values representing the strength of uptrends and downtrends, respectively.
4. Calculate the relative strength (RS) by dividing the up EMA by the down EMA. If the down EMA happens to equal zero, assign the RS a value of 100.
5. Calculate the RSI. It is equal to 100 – (100 / (1 + RS)). You can use this number to predict either a trend continuation or a trend reversal, depending upon your trading strategy. In either strategy, an extreme RSI value—below 10 or above 90—signals that a momentum reversal may be imminent.

How to Use Fibonacci in Forex

1. Open your trading platform and plot a Forex price chart.
2. Locate recent high and low points on the price chart. Fibonacci patterns are used to determine the fluctuation that may occur between these points. Any two points will do, but the most obvious high and low points in the recent price action of any time frame are more likely to be watched by traders worldwide. On a daily chart, for example, the lowest and highest prices of the year could be used.
3. Click on the Fibonacci 'retracement' tool in your trading platform. Most trading software offers many technical analysis tools, including Fibonacci analysis.
4. Drag the mouse between the two points you selected, starting with the price level that occurred first. Most Fibonacci software tools require that you click and hold down the mouse as you drag over the price chart to establish the price range you wish to analyze.
5. Lift up on the mouse. The trading software will create several horizontal lines on the chart between the two price points you selected. These lines are potential reversal points as price fluctuates between these two extremes. As prices move near these areas, be on the lookout for changes in trend when trading Forex.
Manual Fibonacci Calculation
1. Select two price extremes on a Forex chart.
2. Subtract the lowest extreme from the highest extreme. This is the trading range.
3. Multiply the trading range by 0.382, 0.500 and 0.618 to create three results.
4. Add each of these results to the lower price extreme of the trading range. You now have three potential reversal levels that could influence Forex trading between these two extremes.

How to Become a Forex Account Manager

1. Obtain at least a Bachelor’s degree if not an MBA, ideally in the field of statistics, international finance, economics, math or accounting. Gain an internship during your junior or senior year at a reputable financial institution and get hired upon graduation.
2. Pass the examination offered by your brokerage firm based on the training you received within the company. If you pass this weed-out course, ask for sponsorship from your employer. Use this sponsorship to sit for the Series 3 exam offered by the Financial Industry Regulatory Authority. Pass the two-and-a-half-hour, 120-question test to gain licensing and permission to buy and sell commodities including foreign currency. To gain consideration for promotion as an account manager, earn the credentials of a Certified Financial Planner. Ensure you meet all of the requirements to obtain CFP designation, which include possessing a college degree, passing another test and working three years in the financial planning field.
3. Excel in the tasks issued to you during the first couple of years in your firm. Solicit new clients over the phone by placing cold calls and forge relationships with other businesses and potential new clients. Do well within your team as an analyst, where the firm will likely have you specialize in a certain financial instrument or region first. Or perform well on the trading floor as a way to gain recognition from the management team. After earning enough money on the trading floor and building an extensive customer base, appeal to the higher-ups for the promotion of an account manager. Expect this process to take several years, depending on your formative success and overall likability.

How to Profit From Very Small Moves in FOREX Trading

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.

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).

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.

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.

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.

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 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.

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.

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.