Forex Trading, meaning Currency Trading, is a world wide, little known market, which will become the most popular source of income for investors in the very near future. It is open for banks, rich investors and small ones alike and, depending on the sum of money they are willing to risk, the earnings demonstrate this is the best way to start getting rich.
Why choose currency trading over stock, real estate or futures trading? The currency trading advantages are speed, liquidity, commission-free transactions, increased safety, short-term trading and great earnings. Let’s study each of these advantages in other trading systems:
-Speed: Currency trading is instant due to a large amount of transactions while future trading implies a longer time to trade certain commodities, agricultural products, financial instruments and goods (contracts need to be written and signed)
-Stock traders must pay brokers a certain fee for each transaction made. The brokerage fee is available for all futures transactions, but not in the case of currency trading. In currency trading brokers earn money by studying and profiting from the difference of price between sold and bought currencies.
-Liquidity: The currency market is opened non-stop, anywhere in the world giving currency traders the chance to trade whenever they find the opportune moment and prices. This is a characteristic attributed only to currency trading.
-Safety: while other trading systems are based on speculation, on the fluctuation of price, on slippage and market gaps, currency trading is controlled with the help of built in safeguards that limit slip-ups.
-Short term trading, like currency trading, is more efficient for profit making than long term trading. Day trading does not increase speculation, risk and does not imply that the broker’s commission will reduce any profit made.
Anyone can start trading currencies. This means Currency Trading is easy therefore making money is easy! The potential profit that can be made by buying and selling currencies and with a minimum capital for investment is amazing. Currency trading techniques are available online for learning for those interested in doing so, but the best choice would be to let a broker do business for you.
Tricks and traps are everywhere for inexperienced and the best way to avoid loosing money and time is to hire a broker who knows how the currency market works and how to increase your venues. Let someone else do the trading for you!
The Currency market is very vast and it involves traders all over the world.
Therefore the market can not be monopolized, cornered in any way for a single beneficiary. There are many participants, many banks involved and currency trading is a global phenomenon. The amount of business done during a particular period of time by the Currency market is 30 times bigger than that done by the US Equity markets. The average sum of money exchanged during one day of transactions with many currencies goes over 1.6 trillion US$. The impressive numbers don’t stop here. The Currency market predictions of growth in the futures are over 2.0 trillion US$. These facts together with others (like the lack of physical location or centralization of any kind) offer the Currency trader safety.
Trading currencies allows investors to make money quick and efficient, with little risk and in a big way! So what’s keeping you from becoming a Currency trader?
When you become a Forex signal provider, you don’t need to have a huge amount of starting capital to be able to make thousands of dollars in trading profits every month. You can literally start out with a demo trading account and risk no money of your own, while earning anywhere between $100 up to $1 million per month just by performing well as a trader.
Sounds a little too good to be true? That’s what I thought too, until I discovered a service called ZuluTrade. ZuluTrade is an online service that allows people all around the world to pick and choose signal providers to follow, and these signal providers make a commission for every trade they make. Obviously, if you’re a good trader with a solid consistent performance every month, you’re going to be an attractive proposition for many people to follow, which ultimately means more commissions for you. But what if you aren’t at that level yet? Is there a way to become a Forex signal provider making big commissions even if you’re not a super trader yourself?
Absolutely! There’s another way that you can become a Forex signal provider without being a super Forex trader, and that’s by putting together a portfolio of Forex robots that will do the trading for you. Many people are already doing this and profiting as they rise to the top of the ZuluTrade rankings, and they’re doing this by applying some very simple steps that even someone who doesn’t know programming or systems development can do as well. So do yourself a favor and find out just how you can tap into this goldmine of Forex trading profits before it’s too late.
How To Become A Forex Signal Provider The Easy Way
So can you become a Forex signal provider by just throwing a few systems together? Well, you could, but chances are you wouldn’t get many followers and therefore not earn the kind of money that you should. The problem is that most automated Forex trading systems on their default settings are typically high risk, high reward type setups. Sure, it feels good to double your money at the end of the month, but most people don’t have the stomach for the 50% drawdowns in between, meaning that your followers aren’t going to stick around for long. You can overcome this issue by smoothing out the curves so that your followers will get a nice, slow ride of growth, which believe it or not is what 90% of people out there look for in a Forex signal provider.
This smoothing over the curves and providing a comfortable balance of risk and return for your followers can be achieved with a simple process of back testing and optimization, which is easily done with the Metatrader Strategy Tester that comes bundled free with your Metatrader 4 installation. With the right knowhow, you can tweak any system to provide optimum profits with the least risk, and even combine a few systems together to further minimize risk using the principle of diversification. You can easily provide a nice healthy double digit return from a portfolio of automated Forex trading systems using this free tool that will attract a swarm of ZuluTrade followers beating a path to “copy” your trades and earn you a healthy commission.
A Simple Shortcut To Become A Forex Signal Provider With This Method
Right now you’re probably thinking, that all sounds great in theory, but you don’t know how to optimize systems and combine them to become an attractive portfolio that will attract hundreds or even thousands of followers on ZuluTrade. Well, the good news is that you don’t have to be a programming whiz or a computer scientist to do it! Even if you’ve never done it before, you can learn everything you need to know from start to finish from the Guide To Getting Rich With Forex Robots’ “Metatrader Back Testing & Optimization Course”. This course is specifically designed for people who want to become a Forex signal provider, so it’s perfect for setting you up with your own five figure monthly business helping other people make safe, consistent returns by following your recommendations.
Don’t just take my word for it, you can check out the Guide To Getting Rich With Forex Robots’ “Metatrader Back Testing & Optimization Course” for yourself and see that they are the real deal. They’ve even created a unique report that shows you an actual live case study of someone who pursued his dream to become a Forex signal provider and is now earning $20,000 to $50,000 a month. There’s nothing stopping you from doing the same, so grab this opportunity to create your own money making machine today!
The carry trade can be an investing strategy where an investor borrows money in one country at a low interest rate and invests it in another country at better pay. The carry trade takes advantage of differences in interest levels in different countries – which frequently occur as a result of different central bank actions. For instance, the central bank in one country may lower interest rates to stimulate the economy, while a central bank overseas might keep interest rates high to battle inflation.
The perennial problems faced with a trader connect with the achievement of consistency in profits, along with the minimization of losses. Some traders seek the perfect solution in optimized, highly-developed technical trading strategies, others attempt to utilize automated trading to be able to overcome the weaknesses of human instinct. These approaches are valid, but you are often too complicated and difficult to try, and even grasp for that average retail trader with moderate means in capital and time. There’s a solution, the forex carry trade. It is both effective and straightforward, in fact it is an incredible solution to this problem for the average person who loves to trade forex.
The carry of an asset is the opportunity cost of holding it. The carry of a bar of gold is the price tag on storage. The carry of $100 deposited in a bank account is the interest received, even though the carry of $100 in the wallet is the inflation-loss. We concern ourselves using the carry of the forex pair, and if that’s the case, the gain or loss depends upon the interest rate differential in the currencies showcased.
Since each forex transaction involves the buying of a currency, and the sale of another to finance the purchase (when we buy one lot of EUR/USD, for example, we buy one lot of Euros, and sell one lot of USD), in order to maintain the position beyond the closing of the New York market in the United States, we will be paying interest on the currency sold, and receive interest on the currency purchased. It is obvious that if the interest received on the purchased currency (the Euro, in our example) is higher than that paid for the sold currency (the USD), our account will register a profit just for holding the position.
The carry trade adds another dimension to our trading plans. When the currency pair we hold is interest-neutral, or the carry of the bought and sold currencies cancel each other, the only source of profit or loss is the movement in the price of the currency pair. Thus, we must be right about our anticipations about where the price is going in order to make even a tiny profit in trading. But when the carry is positive, our position will accumulate a positive stream of income even as market fluctuations lead to a loss in the position’s value. The benefit of this is obvious: a positive-carry trade (or in short, a carry trade) will add an additional layer of protection, and increase the lifetime of a trade for as long as it exists. The longer the lifetime of the position, the greater the interest income, and the larger the buffer area against market fluctuations.
The main difficulty with the carry trade is its vulnerability to volatility and market shocks. An event that impacts a low or negative carry pair modestly can have catastrophic results for a high-risk, high-yield position. It seems that the first pairs that get punished in unfavorable market conditions are the carry pairs, especially the JPY pairs where traders often take highly risky bets against the high current account surplus and limited external financing needs of the Japanese economy by shorting the currency.
We may conclude by noting that notwithstanding each of the arguments against it, the carry trade remains a valid and highly profitable trading strategy for for many types of traders. If you seek to apply this strategy within your trading decisions, we recommend that you select the ideal one of the fx brokers that offer a high interest income for pairs held. There’s a great degree of variability in the carry friendliness of brokers, so you would do well to research this aspect thoroughly in order to increase your returns.
Japanese Carry Trade Example
Carry trades are normal instruments within the foreign exchange. One of the most popular carry trades happen to be to gain access to money in Japan and use it to buy other countries currencies. It’s been fueled by a low Japanese interest. For example: A trader could take a loan at Japan at 2% interest or less and invest in US treasuries at 3% interest — allowing the investor to keep the surplus 1%.
Currency carry trades bear potential risk of changing fx rates. In the example above, the investor could generate losses when the US dollar fell in value from the Japanese Yen.
Overall however, with disparity between countries in addition to their interest rates, the carry trade provides a viable strategy for forex traders.
You can find more information the carry trade and other trading stategies at Toolsforfx.com
There’s a lot of controversy surrounding automatic Forex trading systems at the moment, with many traders dismissing them as a flat out scam, while others have tried them and been badly burnt as a result. The big question that remains in the Forex community is still whether there are any systems out there that actually work?
Logically, you would think that if there are people trading a manual strategy successfully, then there should be successful automatic Forex trading systems as well. After all, it’s just a matter of quantifying the rules and decision making processes behind any successful strategy to come up with a winning system, right? Obviously, the reason why so many people are losing money is that either something is lost in translation, or the end user isn’t using the system as it was intended to be used.
Don’t get me wrong, I’m not saying that there aren’t developers out there who are just in business to scam unsuspecting new traders. There are, which is why you should do your due diligence on credible resources like Forex Peace Army before you make a decision to buy any system. At the same time, you shouldn’t blame all bad performance on the developer either, because you may not be using it in the right way. So how do you know if your automatic Forex trading systems are truly broken, or if it is actually you who isn’t using it correctly?
Avoiding The Common Mistakes People Make With Automatic Forex Trading Systems
First I want to point out some of the most common mistakes people make with automatic Forex trading systems that cause them to fail consistently with any and all systems that they use. The biggest mistake of all is definitely believing in the hyped up sales copy that the developer uses to sell more systems. For example, most developers will claim that their system is “set and forget”, but I have yet to see one that can truly live up to that promise. At the very least, you need to consider high impact news releases like the monthly NFP and also the various interest rate announcements that affect the major pairs. Personally, I shut down my systems altogether during these event driven trading periods, because it’s just not worth the risk.
Another critical mistake is not shopping around for a good Forex broker with a competitive spread and good execution. If you don’t know this already, the difference of even half a pip in the spread of the pair that you frequently trade can net you a surplus of hundreds of not thousands of dollars per year. Certain ECN brokers can offer you a spread of as little as 0.5 pips on the EUR/USD and 1 pip on the GBP/USD and AUD/USD, so if you’re not getting that spread from your broker right now you should stop everything you’re doing and find a Forex broker that does.
Finally, most people tend to jump in with two feet and trade their automatic Forex trading systems without doing any proper testing at the start. You are bound to make mistakes when you first begin trading any system, so why risk all of your valuable capital during this period? The first month of trading a new system should always be considered a trial period, where you observe and determine the benchmark performance of the system before you risk the full amount you planned to. Personally, I like to do my testing on a micro account instead of a demo, because a demo account will never replicate the real conditions of trading, and as such will give erroneous results.
Winning With Automatic Forex Trading Systems
As the old saying goes, to succeed where others have failed, you have to do what the others failed to do. So knowing the common mistakes people make is one thing, but you’ve got to make sure that you take the necessary action to prevent yourself from falling into the same trap of failure that they did as well. The most important thing that you can do to succeed where others have failed is to treat your trading as a business. Don’t just “set and forget” your system, study it and understand how it works. Why does it enter positions? Why does it exit positions? Are you applying the correct money management strategy? All these things are vital!
Finally, don’t be afraid to think outside the box. Whoever said that you have to buy the same old canned automatic Forex trading systems that everyone else buys? You can design your own from manual Forex strategies, or hire someone to do it for you!
Open up any charting program and you’ll be swamped with dozens of different Forex technical indicators that you can use to analyze the markets and identify trade opportunities. The problem is, you can’t fit them all onto a chart, and even if you can, you’re not going to be able to consider all of them without getting a massive headache! So which ones should you use, and which ones should you ignore?
Personally I like to keep things simple, which is why I limit myself to a maximum of 5 Forex technical indicators on my chart at any given time. These indicators are the Simple Moving Average (SMA), Moving Average Convergence Divergence (MACD), Relative Strength Index (RSI), Average True Range (ATR) and Fibonacci Levels. These 5 indicators guide me through my trade decision making process, and have saved me more than once from making a bad trading call. Here’s why I consider these my 5 essential Forex technical indicators:
Essential Forex Technical Indicators #1: Simple Moving Average
Using a moving average is absolutely indispensable because it denotes the average price over a period of time. Typically, if the prices are consistently above the average, that tells me that the trend is up and vice versa. When the prices dip back to the average area, or even slightly beyond, I’ll observe whether there’s a support there. If there is, the trend is likely to continue and I’ll take the opportunity to enter with a low risk.
In terms of the settings, I like to use the Simple Moving Average over the Exponential Moving Average (EMA). Based on my observations of Forex analysts in the major institutions, they all base their analyses on the 20 period SMA, so it pays to know what the smart money is looking at when making my own calls.
Essential Forex Technical Indicators #2: Moving Average Convergence Divergence
The MACD and the MACD histogram is the second of my favorite Forex technical indicators, because it tells me where the trend is – whether it’s a developing trend or whether it’s close to exhaustion. Typically, you’ll observe that as the up trend develops, the MACD histogram will tend to make higher highs and sometimes never even fall below the 0 line. The same goes for a down trend, the MACD histogram will tend to make lower lows at it progresses. As long as the extremes of the histogram are increasing, I’ll have confidence that the trend will continue and it’s safe for me to trade in the direction of the trend.
One of the strongest reversal signals I know is the divergence in the MACD histogram. For example, when the prices are making higher highs in an uptrend, but the MACD histogram doesn’t make a higher high, and vice versa for a down trend. When I observe this signal, it tells me that the trend is running out of steam, and I should get out and preserve my profit.
Essential Forex Technical Indicators #3: Relative Strength Index
The Relative Strength Index was built to signal overbought and oversold areas, but these days prices are known to go way beyond the limits of 70 and 30 which are meant to denote the overbought and oversold zones, especially in Forex. I personally don’t use the RSI to signal my exit points, but I do avoid entering a long position if the RSI is above 70, and shorts when the RSI is below 30.
Essential Forex Technical Indicators #4: Average True Range
I use the average true range as a measure of the volatility of the market, and it is very useful for me in a couple of ways. Firstly, if the ATR is extremely low and declining, that tells me that the market is likely to continue in a sideways movement for a while yet. That allows me to stay out of the market and avoid whipsaw losses. When the ATR starts rising strongly, that means that the volatility is increasing which signals the beginning of a trend – an ideal time to enter if the prices are around the average zone. Finally, if I’m in a trade and the ATR starts falling off again, that tells me that the trend is running out of steam for now, and I will lighten up my positions or exit them altogether.
Essential Forex Technical Indicators #5: Fibonacci Retracement Levels
Ah, the famed mystical Fibonacci Retracement Levels. I’ve saved these for the last, because I used to be very skeptical about them myself. Then I observed that many Forex analysts were using them in their recommendations, and found out that many traders took notice of these lines as well. As I began to use these in my trading, I found that these Fibonacci retracements often acted as a support point, especially at the 61.8% retracement levels when they coincided with the SMA levels. Again, it pays to know what the smart money is looking at, so ignore this at your own peril.
So there you have it, the 5 essential Forex technical indicators that I use to analyze my trades and make my trading calls. Feel free to experiment with them, and add them to your trading arsenal as you see fit.
With greater than 15 years fx trading experience under my belt and having performed forex seminars and webinars in Europe and Asia for the last 5 years, I thought that I’d share some of my fx broker knowledge with the rest of the forex world. I made a decision to place my two preferred fx brokers up against each other head to head in this evaluation .
A good number of reviews only weigh up forex broker spreads to each other but do not really evaluate much else, spreads alone do not always make for the perfect broker , that is why I made a decision to write this evaluation comparing a few extra aspects of IC Markets and Alpari. The primary areas that I made a decision to concentrate on were slippage, execution latency and client service. Each of these factors were reviewed after testing a live trading account for a 2 week period , over this time in excess of sixty deals were taken on both broker platforms. I must also mention that both accounts were ECN accounts. Alpari call their account their ECN trading account the Alpari Pro account and IC Markets name their ECN forex account their True ECN.
My first appraisal was conducted by looking at the average slippage on all trades executed on both forex broker platforms. Slippage obviously also is dependent on the liquidity behind the scenes and the nature of the market, for example slippage is more prominent around news times as this really is where liquidity can be low . Slippage is unavoidable in a True ECN environment.
As my testing was conducted on the EUR/USD currency pair only with both forex brokers , slippage was simple to calculate . I assesed slippage over three time durations during the day at London open, New York open and around end of day 21:00 GMT. After much testing I noted that the slippage using the Alpari Pro account was unacceptable and considerably more than the slippage on the IC Markets True ECN account . IC Markets is a far better broker if you look at slippage alone.
Trade latency was the next part of my test, in this test I used and Expert advisor to assist me to assess latency. The Expert Advisor supplied me with a report regarding the average deal latency each day for both brokers over the period tested . Latency of course is also extremely dependent on your internet speed and distance from your computer to the forex provider trade server. It was very interesting to see that the trade latency using the Alpari Pro platform was fairly unpredictable and fluctuated depending on the time of the day, on the other hand IC Markets latency was very constant . The typical trade speed on the Alpari Pro account was 402 ms over the fx trading day whlist the typical trade speed on IC Markets True ECN trading account was 123 ms. Once again IC Markets stands out as the better broker relating to execution speed.
Customer service was complex to judge because of its subjective nature, so I made a decision to evaluate both companies based on their email and phone response time. Both forex brokers provided me with outstanding support exceeding what I expected from both forex brokers . In all honesty I actually couldn’t pick the difference between the two companies .
In conclusion I would have to say that the Alpari Pro ECN forex account would be better suited to longer term forex traders , if you’re a scalper or day trader IC Markets True ECN wins hands down. In my testing IC Markets had far less slippage than Alpari and much faster execution speeds this is the reason they’d be better suited to scalpers and day traders. Of course my findings were dependent on my own testing, you need to evaluate both these fx brokers for yourself ahead of making a choice.
The foreign exchange market is the biggest financial investment pool at a global scale. It has an astounding amount in trading volume and it is a highly active market that stretches through the major points of the world.
The Foreign Exchange Market, also called Forex, FX or the currency market, is a platform of trade of international currencies on a global and decentralized level. Due to the fact that it is decentralized, it is active 5.5 days weekly, at 24 hours per day, with a massively large number of buyers and sellers. The comparative values of the different currencies are determined in Forex. Would you like to know more about forex? Visit our website: True ECN.
What sets the Forex trading market apart from other forms of investment would be its high level of liquidity and its geographical diffusion, the extensive trading time, the many different factors that have an effect on exchange rates, and of course its astounding trading volume.
Currency conversion is due to the power of the foreign exchange market, and this greatly supports trade and investment on an international scale. For instance, the European Union is able to import products from Japan by paying them with Japanese Yen even if they use Euro as their currency. With the foreign exchange market, one can also keep track of the values of currencies as well as the interest rate differential involving currency pairs. Would you like to know more about forex? Visit our website: IC Markets.
What happens in a standard Forex transaction is that one trader buys an amount of one currency by paying an amount of another currency. That is why the currencies are displayed in pairs.
Without the right equipment and knowledge, institutions and individuals will definitely lose a lot of money in the world of foreign exchange as it is reputed for its high risk factor. That is why it is vital to invest only in risk capital, or the amount that you can afford to lose.
Some people participate in online currency trading without setting any ground rules. Their currency trading practices have no boundaries to go by and tend to be very erratic and unprofitable. These people did not take the time to develop the strategies that they would use when trading currencies so they have no idea of where their online currency trading business will go.
Planning a strategy for trading in online currencies gives people boundaries. These boundaries are up to the individual and are not subject to the opinions of anyone else, including banking institutions and board of directors or shareholders. Some people set their boundaries based on current data and back it up with a review of past trading transactions and the successful completion of them.
The framework for the online currency trading strategies will need a baseline on which the currency trader can work from. A good baseline would be determining the amount of money that can be lost in one transaction or the amount of money that the trader can afford to lose overall. As with any type of gamble, it is always best to know when to stop or at least to know when to pause and rethink the strategies that are being used.
Otherwise, the trader might incur losses that could go past what people can afford to lose. In an instant, the foreign currency trader would find that they no longer have any working capital and can not place any further trades to make their money back. If they have a good loss limit in place, then they have left room to account for those losses and they will not affect their ability to regain their monies through other means.
Every strategy for online currency trading should allow the trader to view trading as a business and never a hobby. Since there are serious monies on the line, it makes sense to place trades according to good business practices. One of the practices to use in online currency trading is to know who you are doing business with. It also helps to know everything about the business.
To do this, the strategies should include learning about each country that trades in currency. A good day trader will know that looking at trends in the past will help, and looking at the current patterns that emerge constantly throughout the day and night are certain to help in making business like currency trades that are successful. Some people get consumed with trading foreign currencies and lose their perspective. A good strategy to adhere to is to set regular office hours and trade only during regular office business hours.