If trading with real money on forex is your next and final step on the long road you took, then congratulation. Now, open a text document or take up the pen and paper and write down everything I will squeeze into this article, because this is everything you need to learn about forex to fit one page. Always have it with you because it will be a good reminder whenever you feel uncertain about a trade. I sound a bit pushy, but remember, I went through everything you had to go through and this article is a summary of everything important I came across on that voyage.
Forex market is online market on which you can trade currency pair, all day and night, for five days per week. Three modes of trading are used on forex, spot on ( which i used mostly by speculators, people like you and me ), forwards and futures ( which are contract type trades which are used mostly by banks and companies ).
All trade is done through currency pairs ( two currencies paired together, in which you buy one currency with another ).
There are two prices every currency has, bid and ask. Bid price represents the price the market is willing to buy of the currency for. On the other hand ask price represents the price for which the market is willing to sell that currency. Bid price is never higher than ask price.
There is large leverage you can trade with, making large gains with little investment possible. The risk it carries is always same as the iye of the leverage you use.
Speculators ( normal human traders ) are just one of the participants on the forex market. Other are banks, hedgers, corporations and central banks. Different currency pairs are favoured by different market players. Speculators love crosses, while other players use mostly major currency pairs.
Inflation as well as interest rates are factors that influence the strenght of currency. They are two out of many more indicators that show how well the country is doing.
Fundamental analysis focuses on economic and political announcements to determine the future movement and position of currencies. The point of this kind of analysis is to be among the first to profit out of some event. A lot of this research ends in guessing the effect of an event.
Technical analysis uses the movement history of the currency to speculate the future movement of that currency. Traders that follow this kind of analysis focus on prediction of trend and range of the currency.
There aren’t many fees on forex market, in fact just one, fee that is taken from a spread. But this shoud not cloud your judgment, use tools you are provided with .
There is currency pairs trading in form of binary options. Don’t mix that with real trading. That is just a form of gambling. If you are tempted by articles that follow Boss Capital review mold, just avoid it, or do further research which will bring you to comments of people that got tricked by them.
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So, you spent weeks, and even months of learning and preparing yourself for trading on forex market. And you believe you are ready to venture into the world of real trading. Then good luck to you, and may the price always sway into your favour. But before you head on, please take few minutes and devote them to this short article, in which I will tell you few other things you might not be aware when you open your first forex account. This article will be somewhat focused on choosing a right kind of forex account and what you need to know about factors that will influence your decision.
Leverage is first, and maybe the most important factor when choosing account. Before entering forex market and trading on it, you should understand what actually leverage brings to trading. Leverage in all aspects, when you read about it, or someone talks to you about it, sounds great. I mean you can invest 1 000 gold and with leverage of 50 to 1 control 50 000 dollars in a trade. It sound good because in fact it is, if you place a good trade and price movement goes well. Then your profit will be multiplied by the hight of leverage you choose. But, if trade goes south you will lose a lot of your money, well your investment times the hight of the leverage. So greater the chance of huge win, the greater is the risk that follows it.
Leverage can go up to 250 times of the money invested and there are some moves firms have pulled to prevent the worst thing, going into the negative with your account. This lowers the chance of wining large amount of money due to big leverage with just a little amount of your money because there are limits of how big risk you can take. This risk goes up to the maximum amount of money you can lose with leverage you have choosen. This way you will avoid going into negative balance on your account.
Another good thing to know is that there are no fees as there are on other markets. There is only single fee with which market makers set their revenue. They get small percentage from every possible trade,. This percentage is taken from spread between big and ask ratio of a every trade. Every firm has different spread between those two, and if you don’t plan on trading for long period of time, then it doesn’t matter which one you pick. But if you plan on having forex trading as your main profession then looking for a firm with lowest spread ratio is the smartest idea.
There are other minor factors, but the point behind them is to pick out firm with best offer, but still being careful to pick reputable one, due to lack of regulation of forex market. I am not saying that there is a lot of scam oriented firms, but be careful. Scams are always present in any form of trading or any other business that involves money. Just look at the best binary options signals
lists, there are many scam sites in the top of those lists.
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Most of the traders who work on forex, or on one of the stock exchanges know the importance of time and fast reactions. If you are clueless about what is happening with this introduction, let me explain it to you. If you trade on forex market, events that influence one or the other currency will happen. If you re fast to react to them you will profit. If you are not, you will miss that opportunity, or in worst case, enter into the trade too late and generate losses. Some sites offer news and processing of those news for free ( believe me it is not free ), but they are affiliated with binary options brokers like Porter Finance
, and every normal trader will avert his look form the screen whenever he stumbles upon articles about binary options.
Forex market operates whole day, 24 hours. News are published in every possible hour due to time difference between major currencies on the market. Because of that there are people, traders, who make trades based on news. This practice is not easy, because you have to follow and read news releases fom multiple countries. Good thing is that you can focus on only major economic magazines. There are around 17 currencies, 7 or 8 if you are a fool who trades only majors, which you have to follow.
Making schedule of all important news releases in order to follow them is a must, for anyone who would be news trader. Waking up in late hours to read news from Japan, hoping for some breaking event which will make you richer by the morning, is bound to happen. And because of such probability you will wake every night to read those news. Anyone who takes forex trading as a hobby is not suited for news trading. This is a full time job, and requires attention through the day.
But, there is a lot of data in every news release, and knowing what to discard as irrelevant and what is really important are keys to success. I will not waste your time with things that are not important, but I will tell you what to look for in those news. When you scroll through the issue of one of those news, look for decisions about interest rates ( you are aware how interest rate influences currency ), retail sales are also important aspect to look after too. News about inflation I should avoid, because even new traders know what inflation does to currency. Unemployment is another thing you should pay attention while looking through news. Any news regarding industrial production are important too, and news about manufacturing sector are included in that too.
Some people did some research and they came to conclusion that the effects of news settle down after fourth day. But if you want to earn some money on forex, then you must be bold and be among first to react to some news. Understanding tools that a country can use to fight against events that can cause negative effects on currency should help you avoid risking money on news whose effects will be negated by country or central bank of that country.
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In the giant global market of trading with binary options there are many broker houses which offer high quality services and which compete for that tittle of number one broker. This strong competition has raised the standards for those companies and they have to be very efficient, affordable and attractive in order to survive in the turbulent sea of assets, charts and fluctuating prices. One of the brokers which has just recently joined this race and has amazing results in the short period since it appeared is a company called CTOption and this broker certainly aims that top place in the up coming period.
CTOption is created in 2013 under the ownership of a London-based corporation called InfiniCore LTD and its headquarters were registered in Kingstown, Saint Vincent and the Grenadines. Since this company is so young it is still not regulated by any of the major regulatory bodies, like CySEC for instance, but if we take in consideration the fact that this licensing process usually takes 2-3 years, it is probably a matter of months or weeks before CTOption gets the necessary approval. It is important to emphasize that this broker is 100% scam-free and that trading process with this company is completely legitimate and fully reliable. Experts have tried and tested this broker and all results proved that CTOption presents a good and secure option for any potential trader, and that all personal information and investments are protected. When ti comes to the website and the actual interface of this broker, most clients are very satisfied with all features of the platform, which is provided by a renowned software developer called Panda Trading System – a well-known company which is present in this business since 2006. They developed a very intuitive piece of software for this broker and clients generally say that it is very easy to use and enables efficient trading. Additionally, CTOption has incorporated something that they call “Replicator” service, and this feature of the website mimics social networks in the sense that users can “follow” top traders and those who make more successful bids in order to get better information about potential investment opportunities and to “copy” their bids, if they like them. This revolutionary addition is unique on the market and makes CTOption special, but it is all done with the intention of providing customers with the best possible trading experience.
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To actually start trading, clients have to open an account with CTOption, and there are several types of accounts depending on the size of the investments – Mini, Standard and Executive. However, there is also a free demo account which should definitely be used by new traders in order to learn about binary options and the whole process of trading without losing any hard-earned money. Payout rates with CTOption are impressively high, up to 91%, and clients will probably be successful if they pick the right strategy. Over 100 assets is more than enough for even the most demanding of customers and CTOption is there to fulfill all of their additional requests.
People are strange ,then again that is to be expected. Instead of giving advices over and over again people create unwritten rules ,that serve as tips or guidelines. Those kind of rules exist on forex too. You will not find them written by official representatives,but you will find them posted around by many traders. They are not all the same, they differ due to sources they come from. I went and gathered those rules, sifted through them ( there are many rules that are same, but written differently ) and made a list of those rules ,everyone should know about.
Never allow your greed to best you. Know when it is enough and close the trade, don’t let it spiral down and cause losses when you can get profit, even if its small. Logic is your best friend, impulses are your worst enemies. Logic should be always followed.
If a trade fits your sense of logic, and all research points to same decision, then go with it. Never let your impulse be your guide, you will not trade well. Impulses are bad in forex trading, they will cause stupid trades and unnecessary risks. No matter how lucrative trade looks never risk more than 2 or 3 percent of your total balance. If you love risk, or have enough experience then feel free to go up to 10 percent of total money you have, but don’t say that you weren’t warned.
Analysis is always good, but try to mix it a bit. When you trigger trade, follow fundamental analysis. This means to decide on currency pair in accordance with fundamental rules. But entering and exiting trade sould be based on power of the charts, trends and ranges which are derived from technical analysis. Whenever you want to trade always look for pairs that contain one weak and one strong currency. This is the best choice for pairing, because pairing anything else carries more risk and less chance as well as amount of profit. Know when to accept the loss. If you keep pushing in hopes to avoid loss and break into profit you will end deeper into the loss, and that is never good thing to happen. Know when to give up on a trade.
There are no mathematically optimal trades, well not 100 percent optimal. People are strange, I said that, emotions will hinder their logical thinking and that will influence many decisions which will have influence on exchange rates.
How much risk you are getting into can be calculated, but how much you can earn can’t be. You may end up earning pocket change on a trade you thought would make you rich and vice versa.But you know how much of the risk you are getting into at every moment.Be wise. Don’t use excuses when you lose. It was your decision and only one that is responsible for loss is you. Remember that. Banc de Binary
and similar sites that are connected to binary options, but they offer currency pairs trading ( just like forex ) should not be trusted. Seriously, avoid them.
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