The rate of exchange between international currencies provides a possibility for investment that is concerned with the fluctuations that occur daily in the value of those currencies. This has created a market for foreign exchange trading, otherwise known as Forex trading. The keys to successful Forex trading are based on an extensive understanding of currency rate trends and the extent of predictability by which those trends will fluctuate.
An investor who seeks to trade in currency exchange rates must first study recent valuation trends of the different currencies that are more often traded on, especially the US dollar, the Euro, the British pound, and the Japanese yen. There is an inherent volatility in any currency due to its relation to foreign trade activities. Successful Forex trading takes this into consideration. The amount of fluctuation in currencies worldwide is what gives this market such a promising opportunity for profit.
The world waited with great anticipation Tuesday morning, to hear what Janet Yellen had to say about Fed policy — so now is probably a good time to expand on the idea that the character of the stock market has changed, and to look at what investors can do about it. Last week it was suggested that moves in the market — especially on days when something big occurs — have become exaggerated due to the proliferation of algorithmic trading. As …
One aspect of the foreign exchange market that increases the profitability factor is margin trading. A 1% margin is generally available to the trader. This means that an investment of USD 1, 000 provides the trader USD 100, 000 of trading equity. This allows for the potential for extremely high returns on investments, making successful Forex trading quite possible to the diligent investor. A 2% change in the value of a currency trade is reflected as a 200% profitability factor, as well as an equal loss factor.
The fluctuations that occur daily in currencies are measured in small increments, known as pips. While standard values of currencies tend to remain relatively fixed from day to day, the minute fluctuations in their value can lead to a gain or loss of a large number of pips. Successful Forex trading, it is necessary for the investor understand how currencies tend to fluctuate and then buy and sell their currency based on expected incremental fluctuations.
You can trade with countries all over the ocean without buying a plane ticket also in Forex. Say you own US dollars and its value began sliding down, to save the value of your US dollars you trade it to currencies whose values are rising that what you maintain the value of your money although in another currency.
Another positive aspect of the Forex market is the possibility to spot trade or forward trade. Spot trading refers to the termination of a transaction ‘on the spot’. This translates to two business days. This is especially beneficial to commercial investors who may need more day-to-day accounting to coincide with their own business needs. Individual investors may prefer forward trading, where the end of the transaction may be placed forward according to the requirements of the investor to better take advantage of any possible gain from a currency differential.
Interest rates play an important role in the value of currencies as well. Generally speaking, those currencies with higher interest rates will yield better profits when traded against low interest currencies. However, there are many factors that will account for variations in interest rates, such as inflationary trends and trade deficits. Successful Forex trading, therefore, will likewise require diligent monitoring of political and financial situations of the different nations whose currencies the investor has an vested interest in.
Forex Trading is the trading of world currencies. Trading in currencies is the ultimate liquid market, with volume often 50 to 100 times more than the trading of stocks on the New York Exchange, and, because of the type of currencies and the many factors controlling its value, no one has an overriding advantage or insight into the market. Day trading, despite differences in times zones throughout the world, is also popular because the forex market remains open 24 hours a day.
Recognizing good trading software is an easy task, as the basic condition is that of a data provider which will allow you to analyze the market before you start online trading. Many traders and investors rely too much on software’s used for these purposes, but you don’t get a true idea of the market just by using these software ‘s, as there are a number of factors that are a stock market and some of them can only be assessed through skill and experience.
While there are many day traders who do their trading using only the computer, there are others who trade using telephone and mobile phones.
In day trading, the trader doesn’t hold stocks until the next day; instead dispose it off towards the end of the day.
A person is regarded as a day trader when they can accomplish four or more day trades in a five business day period and has two unmet day trade calls in 90 days.
These are but some of the relevant factors that will have an impact on successful Forex trading. Perhaps the most positive aspect of this market, however, is the capacity to trade in foreign markets that are in various time zones, allowing the trader to open and close transactions virtually throughout every 24 hour period.
all about intra day trading?I would like to do intraday trading . .Am a beginner
To be a trader you must first learn how to invest. You must know the products and the markets in which they trade, how security transactions are cleared and more importantly you must know the rules that govern those products and markets. So you must know what you’re doing, why you’re doing it, and how to do it. You should start by reading “Investing for Dummies” by Eric Tyson. Here’s a list of books you should consider, at least read half of them Bulls Make Money, Bears Make Money, Pigs Get Slaughtered, by Gallea How to Trade in Stocks, Jesse Livermore Millionaire Traders, Lein & Schlosberg One Up on Wall Street by Peter Lynch Reminiscences of a Stock Operator, Edwin Lefevre The Disciplined Trader, Mark Douglas Trader Vic-Methods of a Wall Street Master, Victor Sperandeo Trader Vic II-Principles of Professional Speculation, Victor Sperandeo Trading for a Living, by Alexander Elder Trading in the Zone, Mark Douglas And when you think you want to trade, try some paper trading to test your skills without spending you money http://simulatorinvestopedia.com/ http://www.moneyworks4me.com/ and/or http://www.tradingsimulation.com/ Before you enter your first order you need to address four major policies and have very strong discipline to follow them 1 – You need a written sound trading/investment plan with rules that will not only help you but more importantly protect you, mostly from yourself. Always use stops either to protect you on the down side or to lock in profits on the up side. Never trade on emotions, when emotions get involved walk away. Don’t try to out-smart the market, you’ll loose but if you always take what the market is willing to give you, you’ll be successful. Other words, you don’t trade against the trend since the market is always right. And NEVER trade on emotions, once you let emotions in your trades you will loose 2 – A written money management program is essential. Remember never invest 100% of your capital into any one security and never have 100% of your capital invested. Never go into a trade without knowing when and where you are going to get out of it. Never let a loss on a trade get greater than 8%-10%, always take you loss and walk away – don't loose more than you need to and don't be afraid to take the loss. Remember you never can get hurt taking a profit. Never average down, but you can average up. 3 – You must have sufficient trading/investment capital. Use your own money, there’s no need to go into debt so that you can trade and/or invest. Margin can be used but only with restraints, never let the account wall below 45% equity. Unless you fully understand margins you should not use it. 4 – A full and complete understanding of the rules & regulations of the industry. If your going to play in the game be sure you know the rules of the game and always follow them. Unless you are willing to study and follow the above you will never make it as a trader. To be successful as a trader it takes work and constant study of the markets and the products traded in those markets, there is no easy way.
Day Trading can be very rewarding. It will take 3-5 years to be able to learn to trade profitably year over year. 95% of those that try Day Trading in the first year… fail. Start by reading 6-12 of these books; http://joefahmy.com/2010/03/17/recommended-reading-list-2/ http://www.chrisperruna.com/2010/01/10/2010-stock-reading-list/
Don't go for intraday trading it is very risky. First gain some experience on trading then you can try.
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