The Size Advantages Of Forex Trading For The Beginner

People looking to get into trading or investing have a few options. They can trade stocks, options, futures, or Forex.

Stocks are pretty common but have some restrictions that make them less than optimal in all cases. For example, sometimes the cost of commission can make it cost-prohibitive to trade if you don't have a lot of money. The tax rules can also be complicated if you make a lot of trades in a year.

Options are like a much more confusing version of stocks and aren't really a good choice for beginning investors.

Futures are very liquid (for the most part) but can force you into using too much leverage which makes them a bad choice for beginners or people without large accounts.

Forex can sometimes be the best of all worlds. But there is one reason that Forex can be very attractive to everyone but especially to new investors:

No size limits - Positions in Forex can be as large or as small as you want. So whereas in futures if you are trading the ES (S&P 500 futures), the smallest amount of movement (called a "tick") will cause you to gain or lose $12.50, and considering the ES can move 40 or more ticks in a day, that can cause you to gain (or lose) $500 in a day. For someone who only has $1,000 with which to invest, that would potentially be a 50% loss in one day.

Now consider that in Forex, you can adjust your position size to use as much or as little of your account as you want, even so small that the smallest amount of movement possible (called a "pip" in Forex) only causes you you gain or lose $0.01. At this level, if the currency pair you are trading moves even 100 pips, it will only change the value of your account by $1.00.

What this means is that beginners can trade small enough that even if they lose money on every trade while they are learning, they won't actually lose much of their account. This means they will feel more comfortable and confident while learning and won't be worried about "oh no, if I get this trade wrong I'm going to lose so much money!"

This is important because many traders end up losing money, especially when they are learning. And if you're going to lose money for your first few months (arbitrary length of time), it's better if it only costs you a few tens of dollars or so rather than a few hundred or a few thousand.

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What Is Forex Trading?

Forex Trading is not something new. It is one of the easiest yet risky ways to make profit. Many people are into this business and are making good profit, but at the same time there are some people who have ruined their lives just because of this business. The main reason is that they step into the world of this trade without having proper knowledge. You can find information regarding forex trading on different websites, but the problem is that they do not provide enough information. And the information they get is not enough to satisfy them. People look for detailed information that no one has provided yet.

Keeping this in view, I thought, would be good to provide detailed information regarding forex trading, so that novices can get the required information and find it easy to get into this business. Forex stands for foreign exchange, and forex trading means exchange of one foreign currency with another. It is the biggest financial market of the world, but risky and unpredictable at the same time. In forex market there is trading of trillions on a daily basis worldwide. This market of forex works 24 hours a day with small interval of breaks on weekends. Many people are into this currency business: traders include from huge companies and firms to individuals. This market is open for everyone and it does not require any sort of qualification, but you must have enough knowledge and understanding of this market in order to start forex trading.

The best way to do trading is to understand the market trends and then make decisions. It is very important for a person to understand changing market trends in order to do successful trading. You should know when to buy a currency and when to sell it in order to get maximum profit. For this you must be vigilant and active and should keep a close eye on the market trends as it take minutes to change. You must know which currency is mostly active in the market and which can provide you more profit.

You should believe in yourself and must be confident while making decisions. If you have fear of losing, forex trading is not your cup of tea; it is better for you to invest your money somewhere else. A fearless, patience and vigilant personality is required for this type of business. You should get some knowledge of different terms used in forex trading. I would recommend you to consult a broker who can give you genuine information and knowledge using his experience. You can even buy books related to forex trading, and, yes, internet is always there to help you.

If you're planning to go with forex trading, you can check out forex Rebates and Forex broker comparison online through these links.

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Real Forex FAQs and Facts

If you are thinking about taking the time to invest in the Forex market, then you are probably asking your self these questions in this article every day. It's no secret that trading Forex is not as easy as advertised and some how tricky. Here are some of the most common questions that I get everyday.

Is Trading In The Forex Market Safe?

No, Trading in the Forex market is very risky. If you don't know what you are doing then please take the time to read about it, get educated, check free websites like babypips and forexpeacearmy. Learn how to come up with a strategy that suits you and your capital.Remember 99.99% of Forex products being sold out there are useless and you will most probably end up being scammed. So to make it in this business you need to take your time learning as much as you can about it. Test your skills on a demo account for at least 6 months before taking the decision to trade with your real money.

What Are The Most Popular Forex Indicators?

Forex indicators have been out there for too long that all of them by now are popular. Mainly the most common ones are Stochastics, MACD, Moving Averages, Trendlines, RSI, etc...They are so common that using them is not so profitable after all. If you will rely solely on indicators you probably wont make it in this business. Indicators will never give you the edge it's a tool that everybody else is using. On the other hand, If you can identify price action, behavior and patterns, along with few indicators to be used only as a confirmation before pulling that trigger then this might give you the edge.

What Is The Best Forex Robot Available?

Forex robot is a computer software that monitors currencies behavior over time and make calculations to figure out the best time to buy and sell. These programs help to take some of the guess work out of buying and selling and can help a trader to spot currencies that meet certain criteria.

Most of the selling points of Forex robots state that you can simply set them and watch the cash come pouring in. While in some cases this may work, in most cases you are going to need to carefully monitor the program and make sure that it is adjusting to trends in the market. While they can be very profitable they may require a certain amount of intervention to be run effectively. Used properly, and if you have the patience to get to know the programs, they become a powerful tool.

Another way to go is to find a good account manager to trade for you if you don't want to spend all that time learning your self how to trade. Just make sure to do your homework and double check that the account manager you are going for is not a scammer.

Can I Make 10-20 Pips Per Day Trading Forex?

It may sound simple to achieve but actually it's very hard. You should always take into consideration the spread. for example, If your target is 10 pips per day, and you have a 3 pip spread on GBP/USD, You'll basically be paying about 30% of your winnings to your broker. Also you have to make sure if you target only 10 to 20 pips a day that your stop loss should also be 10 to 20 pips a day. This way if you lost a trade you can easily make up for it in your next trades, but if your stop loss is like 100 pips and you target only 10 pips you will need 10 trades to make up for 1 loss, which is the fastest way to kill any account.

With that in mind a stop loss of only 20 pips is very little almost every trade will go against you more than 20 pips before it moves in your favor, you need to give your trade some room to breathe. That's why I recommend to set bigger goals like 50 to 100 pips with a 50 - 100 pips SL. I always prefer 1:1 Win:Loss ratio.

To sum it up, trading the Forex market is not as easy as we all want it to be. It's risky it's surrounded by over-hyped products and deceiving marketers trying to get to your pocket every day. Just be careful never spend money on courses or EAs everything you need to learn is out there for free, Just take the time to Google it up.

Mohamed Rabea - Professional Forex Trader
http://www.forexfaqs.net/

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Learn Forex Market Trading - Simple Steps to Make Money

The Forex markets are huge and full of liquidity at almost any time of the day. This makes it easy to get in and out of positions without fear of not being able to. It leverages the power of different time zones and countries to allow the individual to trade like never before. That simple idea, coupled with the ambition to make a profit draws many to these markets. It seems so simple, but as many find out, it is extremely hard to be successful. To increase your odds consider the following:

1. Open a demo account and find your favorite time of the day. Trade for an hour during the same time to get and get a feel for the pair you want to specialize in. Once your profitable, grow your trading business by scaling it up.

2. Markets move quickly at certain times of the day. As an example, when the market opens, during scheduled news events and other event driven times. If you are having trouble making money in a demo account change the time of day you are trading. Find times when you know there is increased volatility to move market price more. Stick with this time every day and see if it makes a difference for your trading and profitability.

3. Don't get greedy. Start by looking for singles and be happy you are making a profit. Multiple singles can add up quickly as long as you have a trading plan that limits your loses. If your risk to reward on each trade is not 2 to 1 or greater it will be hard to make money in the long run. Take the singles for now and push your limits as you generate wins and confidence.

4. Trading is nothing more than gambling if you don't have a trading plan and strategy that works. Take the time to learn the markets and develop your strategy before you trade. While it may not ensure you are profitable, but it will limit your loses when things don't work out.

5. Stop trading with your emotions and stick to your trading plan. When positions go in the red traders become gamblers and do one of two things. They go all in and buy more which commonly turns into a greater lose. Or, they cut their loses quickly and watch as the position moves into a profit. The solution, is to have a successful trading plan and sticking to it. The goal is not to win each trade, it's to make money over time. Your trading plan should do that, if it doesn't, get a good trading plan and paper trade it successfully for a while first.

Forex can be a great opportunity to play on a big field and be profitable. But, it's not easy and you will most likely fail without a solid plan. Think about what you want to accomplish, develop a strategy and paper trade until it is profitable.

For more information and a free forex trading e-book go to http://bit.ly/vHrF45.

Joe Tavenner CSP, CFPS has over 15 years of experience, a bachelors and Masters degree in Occupational Safety Management and an MBA in Management. He trades forex as a hobby and has a blog full of free resources, articles and product reviews. If you are looking for more forex information go to http://bit.ly/free4u123.

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Trade The News - Profiting From Trading With Low Latency News Feeds

Experienced traders recognize the effects of global changes on Foreign Exchange (Forex/FX) markets, stock markets and futures markets. Factors such as interest rate decisions, inflation, retail sales, unemployment, industrial productions, consumer confidence surveys, business sentiment surveys, trade balance and manufacturing surveys affect currency movement. While traders could monitor this information manually using traditional news sources, profiting from automated or algorithmic trading utilizing low latency news feeds is an often more predictable and effective trading method that can increase profitability while reducing risk.

The faster a trader can receive economic news, analyze the data, make decisions, apply risk management models and execute trades, the more profitable they can become. Automated traders are generally more successful than manual traders because the automation will use a tested rules-based trading strategy that employs money management and risk management techniques. The strategy will process trends, analyze data and execute trades faster than a human with no emotion. In order to take advantage of the low latency news feeds it is essential to have the right low latency news feed provider, have a proper trading strategy and the correct network infrastructure to ensure the fastest possible latency to the news source in order to beat the competition on order entries and fills or execution.

How Do Low Latency News Feeds Work?

Low latency news feeds provide key economic data to sophisticated market participants for whom speed is a top priority. While the rest of the world receives economic news through aggregated news feeds, bureau services or mass media such as news web sites, radio or television low latency news traders count on lightning fast delivery of key economic releases. These include jobs figures, inflation data, and manufacturing indexes, directly from the Bureau of Labor Statistics, Commerce Department, and the Treasury Press Room in a machine-readable feed that is optimized for algorithmic traders.

One method of controlling the release of news is an embargo. After the embargo is lifted for news event, reporters enter the release data into electronic format which is immediately distributed in a proprietary binary format. The data is sent over private networks to several distribution points near various large cities around the world. In order to receive the news data as quickly as possible, it is essential that a trader use a valid low latency news provider that has invested heavily in technology infrastructure. Embargoed data is requested by a source not to be published before a certain date and time or unless certain conditions have been met. The media is given advanced notice in order to prepare for the release.

News agencies also have reporters in sealed Government press rooms during a defined lock-up period. Lock-up data periods simply regulate the release of all news data so that every news outlet releases it simultaneously. This can be done in two ways: "Finger push" and "Switch Release" are used to regulate the release.

News feeds feature economic and corporate news that influence trading activity worldwide. Economic indicators are used to facilitate trading decisions. The news is fed into an algorithm that parses, consolidates, analyzes and makes trading recommendations based upon the news. The algorithms can filter the news, produce indicators and help traders make split-second decisions to avoid substantial losses.

Automated software trading programs enable faster trading decisions. Decisions made in microseconds may equate to a significant edge in the market.

News is a good indicator of the volatility of a market and if you trade the news, opportunities will present themselves. Traders tend to overreact when a news report is released, and under-react when there is very little news. Machine readable news provides historical data through archives that enable traders to back test price movements against specific economic indicators.

Each country releases important economic news during certain times of the day. Advanced traders analyze and execute trades almost instantaneously when the announcement is made. Instantaneous analysis is made possible through automated trading with low latency news feed. Automated trading can play a part of a trader's risk management and loss avoidance strategy. With automated trading, historical back tests and algorithms are utilized to select optimal entry and exit points.

Traders must know when the data will be released to know when to monitor the market. For instance, important economic data in the United States is released between 8:30 AM and 10:00 AM EST. Canada releases information between 7:00 AM and 8:30 AM. Since currencies span the globe, traders may always find a market that is open and ready for trading.

A SAMPLE of Major Economic Indicators
Consumer Price Index
Employment Cost Index
Employment Situation
Producer Price Index
Productivity and Costs
Real Earnings
U.S. Import and Export Prices
Employment & Unemployment

Where Do You Put Your Servers? Important Geographic Locations for algorithmic trading Strategies

The majority of investors that trade the news seek to have their algorithmic trading platforms hosted as close as possible to news source and the execution venue as possible. General distribution locations for low latency news feed providers include globally: New York, Washington DC, Chicago and London.

The ideal locations to place your servers are in well-connected datacenters that allow you to directly connect your network or servers to the actually news feed source and execution venue. There must be a balance of distance and latency between both. You need to be close enough to the news in order to act upon the releases however, close enough to the broker or exchange to get your order in ahead of the masses looking for the best fill.

Low Latency News Feed Providers

Thomson Reuters uses proprietary, state of the art technology to produce a low latency news feed. The news feed is designed specifically for applications and is machine readable. Streaming XML broadcast is used to produce full text and metadata to ensure that investors never miss an event.

Another Thomson Reuters news feed features macro-economic events, natural disasters and violence in the country. An analysis of the news is released. When the category reaches a threshold, the investor's trading and risk management system is notified to trigger an entry or exit point from the market. Thomson Reuters has a unique edge on global news compared to other providers being one of the most respected business news agencies in the world if not the most respected outside of the United States. They have the advantage of including global Reuters News to their feed in addition to third-party newswires and Economic data for both the United States and Europe. The University of Michigan Survey of Consumers report is also another major news event and releases data twice monthly. Thomson Reuters has exclusive media rights to The University of Michigan data.

Other low latency news providers include: Need to Know News, Dow Jones News and Rapidata which we will discuss further when they make information regarding their services more available.

Examples of News Affecting the Markets

A news feed may indicate a change in the unemployment rate. For the sake of the scenario, unemployment rates will show a positive change. Historical analysis may show that the change is not due to seasonal effects. News feeds show that buyer confidence is increasing due the decrease in unemployment rates. Reports provide a strong indication that the unemployment rate will remain low.

With this information, analysis may indicate that traders should short the USD. The algorithm may determine that the USD/JPY pair would yield the most profits. An automatic trade would be executed when the target is reached, and the trade will be on auto-pilot until completion.

The dollar could continue to fall despite reports of unemployment improvement provided from the news feed. Investors must keep in mind that multiple factors affect the movement of the United States Dollar. The unemployment rate may drop, but the overall economy may not improve. If larger investors do not change their perception of the dollar, then the dollar may continue to fall.

The big players will typically make their decisions prior to most of the retail or smaller traders. Big player decisions may affect the market in an unexpected way. If the decision is made on only information from the unemployment, the assumption will be incorrect. Non-directional bias assumes that any major news about a country will create a trading opportunity. Directional-bias trading accounts for all possible economic indicators including responses from major market players.

Trading The News - The Bottom Line

News moves the markets and if you trade the news, you can capitalize. There are very few of us that can argue against that fact. There is no doubt that the trader receiving news data ahead of the curve has the edge on getting a solid short-term trade on momentum trade in various markets whether FX, Equities or Futures. The cost of low latency infrastructure has dropped over the past few years making it possible to subscribe to a low latency news feed and receive the data from the source giving a tremendous edge over traders watching television, the Internet, radio or standard news feeds. In a market driven by large banks and hedge funds, low latency news feeds certainly give the big company edge to even individual traders.

Jubin Pejman, Founder of FCM360, is an industry leader for Financial Services Technology Facilitation. FCM360 specializes in establishing high-performance IT infrastructures for Financial companies to gain connectivity to mission-critical exchange markets. Learn more about FCM360's low latency colocation services.

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How to Trade the Forex Market Open Successfully

The open provides a great time to trade the forex markets during high volatility. It is an edge you can exploit to give you an opportunity to be in the right place at the right time. Generally, a fast market can provide great opportunities to both make and lose money. Slow markets can provide opportunities but commonly, move so slowly and without direction that making money is almost nonexistent.

The market open can be a great time to see large moves and tend to go through a pattern as long as a news event doesn't push them around. As an example, when markets open there is a flood of buyers and sellers that can push them to an early extreme. The move quickly fades in the opposite direction about 30 minutes after the open as volume starts to subside. At some point, a direction for the day will form and a short or long-term trend will emerge. Try looking at a 5 minute chart sometime and see if you see this happen.

Below are the forex market hours:

- Japanese traders open 7:00 pm to 4:00 am EST
- London traders open 3:00 am EST to 12:00 noon EST
- New York traders open 8:00 am to 5:00 pm EST

That provides 3 times every 24 hour period to watch the opening volatility come in and see if the pattern emerges. Once you see it happen over and over you will quickly develop confidence and will be ready to profit from it. Having your trading plan ready will keep you prepared and your emotions in check.

One strategy to consider is buying after the cycle completes and trying to ride the trend for a profit. Consider this, as the market opens and price moves to an extreme high or low write down the price on paper. Wait until it moves back in the opposite direction at least fifty percent and rebounds to a new high or low. Once it surpasses the original price extreme take your position and ride the trend.

Entering the trade is just one component of being successful. To manage the trade you have to develop a strategy that won't turn a winner into a loser. Paper trade until you have your system down and confidence up.

There are many way to trade in any market. Finding the method that works for you is a key to being successful. Take the time to develop your own trading plan and paper trade it before you use real money. The ideas in this article are presented to help you formulate a plan and are not meant to be trading advice.

For more information and a free forex trading e-book go to http://bit.ly/vHrF45

Joe Tavenner CSP, CFPS has over 15 years of experience, a bachelors and Masters degree in Occupational Safety Management and an MBA in Management. He trades forex as a hobby and has a blog full of free resources, articles and product reviews. If you are looking for more forex information go to http://bit.ly/free4u123

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How to Trade Smart in Today's Forex Market

Forex trading has witnessed a lot of tremendous developments in recent years thereby giving traders the platform to make big money. But if you don't know how to trade smart in today's market, your desire to be among top earners would be dashed. The following tips will show you the secrets of trading smart in a present-day market.

1. Use a dynamic trading platform: Using a dynamic trading platform will increase your chances of making money in the forex market. Platforms with many functionalities will give you an added advantage in making the right decision that will guarantee continuous profit in the market. Endeavour to use a platform that is equipped with new features from time to time.

2. Exploit social trading option: Not minding your experience or inexperience in this business, you should take advantage of social trading to enhance your speculation, if you have one. Social trading is all about knowing what others are doing and using it to enhance your trading activities. There are platforms that supports social trading and they are designed to help traders to spot trading signals in order to make more money.

3. Go with the trend: Your major task as a forex trader is to spot the trend and follow it. If you can successfully do this, you are definitely going to succeed in this business. The basic principle for all traders is the correct forecast of the market and subsequently taking advantage of this.

4. Put your ear to the ground: Before you can succeed in this game, you must get the latest information at the right time. What makes the market thick is the array of information that is available for traders and it is the most powerful weapon for successful trading. Before any meaningful success can be made on the market, information gathering is indispensable.

5. Trade on the move: In our present world, forex trading has now been made easy. With your Android phone, you can now stay glued to the market and trade on the go. Whether it is fundamental or technical trading, or even the latest social trading, doing so on your phone is a smart way to make money with ease. Get the right information in order to come up with the right forecast, get the right broker and platform, open an account, fund your account and you are set to hit the most traded market in the world in order to tap your own cash.

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