Forex trading may become a much easier activity if you follow your own or someone else’s well-formulated guidelines. I’ve based my guidelines on my past Forex trading experience and knowledge gained listening to some of the best stock and Forex traders. What’s important is that the guidelines are not the laws and rules — they are not the only way to success, they just help the traders in their endeavor. Here’s the list of my four Forex trading guidelines:

• Risk only 3% of the total trading capital with each trade. Generally it’s quite hard to come up with the comfortable risk percentage value for your trades if you want to keep a good money management and still let your funds grow at a nice rate. For me 3% is the optimal level — safe enough to save and high enough to gain.
• Reward-to-risk ratio should be no lower than 1. Many currency traders prefer trading with the ratio not less than 2 or even higher. That’s a problem of risk/gain balance too. For me the opportunities with the ratio above 2 are very rare — maybe, because I prefer high accuracy trades. If your accuracy rate is far from 90% than sticking to reward-to-risk ratio of 2 would probably be a better decision.
• Don’t leave the positions open through the weekend. The weekly opening gap can be a killer. Don’t underestimate it. As a swing trader, I prefer to open my positions in the beginning of the week and I always close them before trading ends on Friday. The gap in the price rates that usually occurs after a weekend can make your stop-loss trigger far from the levels you planned it to.
• Wait before opening a new order after you’ve just traded. If you jump into another position right after you closed or opened a previous order is a straight road to overtrading and an empty balance. I always wait some time analyzing opportunities and resting from the Forex market before setting up my next order. Maybe, for the extreme scalpers this isn’t a best decision, but for the absolute majority of the medium-term Forex traders it is.

Any investor would be genuinely attracted by the Forex market due to its superiority over other financial markets. Some obvious attractions are the superior liquidity, better execution, 24 hours market and lots more. For details on the superiority of forex over other financial markets, you would love the "Why Forex?" article.



Making money in the Forex market might appear a cake walk to outsiders.





Does this mean that it is easy as pie to make money on the Forex market? Absolutely not! Since we now know that it is not as easy as it seems to make money on the Forex market, why do some traders succeed while others fail? That is not an easy question to answer. Something does set apart the profitable traders. They do not follow the crowd. These traders think independently from the crowd. How long does it take to see consistent profitable results in the Forex market? This, too, is not an easy question to answer. It varies from person to person. One thing is for sure - this cannot be done in a short time frame. It is a process that could take years to see desired profits.





Here are a few things to consider if you decide to trade in the Forex market that may hasten the process of realizing a profit: have a trading system in place, education, use money management, be aware of psychological issues and have the proper discipline to follow your trading system as well as your trading plan. Benefits of Online Forex Trading Thanks to the Internet being available to almost everyone, the Forex market may be accessed with ease. Computers are now able to make complex charts that are very beneficial when you go to trade in the Forex market. Forex traders can do business 24 hours a day no matter what their geographical location may be. Daily transactions in the Forex market have increased to two trillion USD. It is quite easy to open a forex trading account. There are even free practice accounts that can be set up which allow you to test your skills before you make any transactions with real money. Traders can trade with different currencies in different markets at the same time and not have a problem doing it.





Online forex trading touts a lot of liquidity and flexibility. The trader can trade and access quotes in real time when he deals with online forex transactions. A very important benefit is that forex trading has virtually eliminated the bears and bulls of the trade. This is the only trade market that does not have these elements. There are no commissions, exchange fees or any other hidden costs involved with online forex trading. The trade is done very quickly and there is no delay of any kind. It literally takes just seconds to execute a trade or fill or confirm the same. Small traders have more leverage in the Forex market. There are indeed many benefits to online forex trading, but you also have to look at the other side of the coin. Online forex trading is risky. You should not invest any more money than you are willing to lose. Remember, it takes education, patience and practice to become good at forex trading.

Hey guys,

Its article time again. Worked on this for a while.

I compiled the most frequently asked questions with regard to the Forex market. Here it is. feel free to put it on your blog or site but just make sure you mention where you got it from.

MOST FAQ about the FOREX MARKET

With over $1.4 Trillion traded daily, the Forex market stands out as the largest financial market in the world currently. Still, it is an unfamiliar territory to many common people and amateur investors. If you are a fresher or a pro and would like to refresh your knowledge on the Forex market, you are on the right page. In this article, I will cover the most commonly asked questions related to the Forex market. For free ebooks and guides on getting started with Forex trading, Go here! And also check on the same site, the article “Why Forex?” (Its in the blog archive and gives you some awesome reasons why you really must invest in the forex market) And to enlighten yourself on the FAQ regarding the Forex market, please continue reading this article.

How does this market differ from other markets?
It differs from other markets like stock market in the simple fact that its not regulated by a central governing body. There exists no clearinghouses to guarantee the trades and there is also no arbitration panel to resolve and decide upon disputes. Credit agreements are what the trading is based on. So, truthfully speaking, business in the largest liquid market depends simply on a metaphorical handshake.

This might seem out of the world or plain weird to investors used to structured exchanges like the NYSE or CME. But this arrangement actually works out pretty well in practice as investors and brokers must compete and co-operate with each other at the same time.

The FX market is so different from other markets in some ways that are sure to raise eyebrows. If you feel that the EUR/USD is going to spiral downwards in near future? Feel free to short the pair at will( Selling short is the opposite of going long. That is, short sellers make money if the stock goes down in price. This is an advanced trading strategy with many unique risks and pitfalls. Novice investors are advised to avoid short sales.)

There is no limit to the size of the position you can gain. Theoretically speaking, you could sell $100 million of currency if you had the capital to do so. If you could some how manage to gain information on the immediate future of a particular currency, you could well be a millionaire in no time. The Fact is European economic data, such as German employment figures, are often leaked days before they are officially released.

Before we leave you with the wrong impression that Forex or Foreign exchange is the Wild West of finance, we must also note that this is the most liquid market in the world. Forex is a 24 Hours trading opportunity. It’s not going be like you wait for the Forex shop down the street to open. As a Forex Trader, you get the opportunity to trade 24 hours from Sunday 5:00 pm (ET) to Friday 4:30 pm.

This means you can do trading upon your convenience and based on your schedule. It also provides you the opportunity to act immediately upon golden breaking news from the market.

Where is the commission in FX?

Investors in stock market, futures or options generally use a broker who acts as an agent in the subsequent transactions. The broker does an exchange based on the investor’s instructions. For this, he gets paid a commission.

However, the Forex market doesn’t have commissions. It is a principals only market.
Forex firms are dealers, and not brokers. This is a very critical distinction that all investors must understand. Commission is not charged by them. They make their profits through the bid-ask spread (The amount by which the ask price exceeds the bid. This is essentially the difference in price between the highest price that a buyer is willing to pay for an asset and the lowest price for which a seller is willing to sell it. For example, if the bid price is $20 and the ask price is $21 then the "bid-ask spread" is $1.

What is a pip?

Pip is an abbreviation used for “Percentage in Profit” It is the smallest increment of trade in the Forex market. In the Forex market,prices are stated to the fourth decimal point. For eg: a Cadbury bar that costed $2.70 in your nearby supermarket will be quoted as $2.7000 in the Forex market. A change in the fourth decimal of that will be a pip.

We can simply put it that it is 1/100^th of 1% or 0.0001 %

What are you really selling or buying in the currency market?
Simply “NOTHING”. The Foreign exchange or Forex market is merely a speculative market. There is no physical exchanging of currencies there. All the trades are present as computer entries and netted out based on the market prices.

For accounts that are denominated in dollars, all the profits and losses would be calculated in dollars and recorded on the traders account in dollars.

Which currencies are traded?

Some mind blowing and exotic options would be the Thai bath or the Czech koruna , but the majority of trading in the Forex market is based on the seven most liquid currency pairs.

They are

EUR/USD (euro/dollar) USD/JPY (dollar/Japanese yen) GBP/USD (British pound/dollar) USD/CHF (dollar/Swiss franc)

and the three commodity pairs:

AUD/USD (Australian dollar/dollar) USD/CAD (dollar/Canadian dollar) NZD/USD (New Zealand dollar/dollar)

These currency pairs, along with their various combinations (such as EUR/JPY, GBP/JPY and EUR/GBP) account for more than 95% of all speculative trading in the Forex market..

FX Jargon

Every field possesses its own jargon and the Forex market is no different as such.

Here are some terms which are worthwhile learning.

Cable, sterling, pound – the alternative names for GBP Greenback, buck - nicknames for the U.S. dollar Swissie - nickname for the Swiss franc, Aussie - nickname for the Australian dollar . Kiwi - nickname for the New Zealand dollar Loonie, the little dollar - nicknames for the Canadian dollar Figure - FX term connoting a round number like 1.2000 Yard - a billion units, as in "I sold a couple of yards of sterling."

Well Guys,

Unpredictability is an integral part of the foreign exchange market (FOREX)

So whenever you need to check the latest currency values be it USD value today or latest GBP/USD value, you can check here. The latest values are in the table and the ticker. Any more currency requests that you would like us to keep a track on will be added.

And yeah, read this article

The major currencies pared their gains versus the dollar in the Tuesday session as the upcoming G7 Finance Minister’s meeting looms. Traders pushed the Aussie beneath the 0.90-level to 0.8825 and the sterling below the 2.03-mark. With growing unease over whether the G7 communiqué will address concerns about recent dollar and yen weakness, both currencies regained footing amid unwinding of heavy shorts.

The greenback kicked off the New York session initially weaker on the heels of soft US economic data. The reports included a record net overall capital outflows (TIC) in August at $163.0 billion, compared with a $94.3 billion inflow a month prior. The new private capital outflow component hit a record $141.9 billion versus an inflow of $56.0 billion from July. Industrial output for September was in line with consensus estimates at 0.1%, down slightly from August at 0.2%. Capacity utilization was down marginally at 82.1% versus 82.2% from July. Meanwhile, the NAHB housing market index continued to suggest deteriorating conditions, falling by more than estimates to 18 for October versus 20 in September. The decline marked the fifth consecutive month the index has fallen, hitting its lowest level since initiation in 1985.

Fed Chairman Bernanke provided few clues into the FOMC policy decision at the end of the month, sounding an upbeat tone on credit conditions and saying the improvement bolsters the scope for achieving moderate growth with price stability. He reiterated uncertainties looming over the housing market, saying conditions in the mortgage markets remain difficult. Bernanke was optimistic on growth, saying some of the solid momentum from Q2 seems to have carried over into Q3. Although we expect another 25-basis point rate cut from the FOMC this year, we look for the Fed to stand pat at the end of this month, instead opting to ease at the December 11th meeting.

GBP Retreats

The sterling pulled back sharply after several failed attempts this week to break above the upper channel line near 2.0450. Cable now trades near the base of the channel around the 2.03-level, with the trendline support hovering around 2.230.

Economic data released from the UK revealed mixed inflation readings, with September CPI slightly lower than expected at 0.1% m/m and 1.8% y/y. The retail price index was also lower than expected at 3.9% y/y and 0.3% m/m while the core RPI was unchanged at 2.8% y/y and 0.3% m/m.

With increases in inflation contained at this point, we continue to anticipate the next BoE rate move to be an ease to alleviate tightening credit conditions in the UK. Traders will look ahead to UK August unemployment rate, September claimant count and the minutes from the Bank of England monetary policy meeting.

Articles original source

Hey Guys,

I am working on making a little collection of decent ebooks on forex trading.

I will get them posted on the blog soon.

So keep checking back for updates!! and yeah bookmark US

Thank You