Tag Archives: Forex Trading
The fact that you can choose an online forex broker with a simple search is an amazing option for retail forex traders. However, the lack of regulatory bodies in the forex trading arena can lead to many fraud forex brokers who set up shop only to rob their clients. In addition to brokers that are out to make a quick buck there are others that have policies that are not suitable for their clients. It is difficult to know which one is more dangerous than the other since they both lead to large losses – one immediately and the other over time.
Looking at Forex Broker Reviews
There are various ways in which you can safeguard yourself from falling into the hands of a fraud forex broker. The first thing that you should do is to check for reviews and testimonials on specific forex brokers. This can be done over the internet but keep in mind that paid reviews and testimonials are not uncommon in today’s world. Choosing a forum where you can discuss the strengths and weaknesses of a forex broker is a much better option.
Here too, make sure that you do not fall prey to comments that are made by disgruntled forex traders. See more about this on plus500 scam. There are many traders that lose money due to decisions that they have taken and they tend to blame it on the forex broker since they are looking for a scape goat. Comments such as ‘the markets always fall as soon as I placed the order’ or ‘slippages were never in my favor’ are comments that do not reflect on the efficacy of the forex broker.
Learn to sift the comments in order to find the genuine reviews and comments before making your decision.
Important Checks for Forex Brokers
It is essential that you ascertain certain available features offered by the broker before taking any significant steps towards signing on. Here are some of them.
- Is there an option to open a mini account or an account with minimum deposit? Use this account to place a few trades and withdraw your monies. Once you are sure that the withdrawal methods are genuine and easy to use, you will feel relieved about having easy access to your money.
- Always reading the fine print in the contract. Boring as it may seem, you need to read every word of the contract and understand the provisions offered by the broker. Some incentives have caveats that will cause problems in withdrawing money. For example, if you have received bonus on opening an account and lost some funds, you may be allowed to access your money on the pretext that the funds have bonus amount included.
- Choose to work only with forex brokers that are registered with the financial authorities to ensure that they manage their accounts and funds well and that they have the required financial backing.
Foreign exchange trading, better known as forex trading, is becoming a more popular method of investing for many customers. With its variety of currencies from which to choose as well as a number of precious metals and commodities, these companies are giving the stock market a run for its money when it comes to enticing investors. As more forex companies are established, there is lots of jockeying for position among them to gain the recognition of industry experts and the business of new traders. When it comes to the best of the best, here are some forex companies that are rising to the top of the forex trading industry.
One of the most popular companies is eToro. Needing only $50 to open an account, customers can find a wealth of educational information as well as current market statistics to help them along their way. New traders can open a demo account to help them learn the ropes of forex trading before investing any of their real money, mobile trading and one-click dealing. In addition to trading foreign exchanges, customers can also choose to take their chances with precious metals, oil, gold, commodities and indices.
Billing itself as the company for traders that want more, it offers something for everyone. Mobile trading, mini-accounts, scalping and hedging and more are available to traders. One of the more popular aspects of this company is its trading contests, letting traders compete against one another for prizes in a format very similar to what some fantasy sports leagues do for their customers. Targeting younger traders, Netotrade is determined to be the company of choice for younger traders who demand more from their broker.
XE Markets is a forex broker that lets traders open accounts for as little as $5. With lots of features for consumers including low spreads, no commissions and instant deposits the company is quickly gaining in popularity. Also offering numerous educational resources for new traders, XE is great at helping new traders learn the tricks of the trade before jumping into the forex game. Customers have access to efficient and knowledgeable customer service, and can choose from a variety of tradable instruments including forex, precious metals, equity indices and energies.
AVA FX is a forex company which has made great strides in web-based forex trading. Regulated by the Central Bank of Ireland, it’s very trader-friendly with its mobile alerts and trading signals, helping to alert traders to new information and when good deals may be available. Its web-based trading is also very user-friendly, and its many tutorials and online educational resources make it easy for new traders to learn everything they need to know about the field. Customers who are feeling lucky can take their new-found knowledge and invest in forex, oil, gold, stocks and more.
Investments of any type are risky, but with the emphasis on education and customer service these companies are making it easier all the time for new traders to enter the exciting and ever-changing world of forex trading.
Forex market is now easily accessible to anyone on the internet. Any average person can trade in different foreign exchange market from the comfort of his home.
If you are interested in trading currencies, its important that you first find an online Forex broker. It is always recommended that you start with a demo account and experiment it with different demo accounts from different online Forex brokers. If any broker is offering a free sign up bonus or similar, he should be your first preference. You can easily find one on the internet.
While signing up for a forex trading account, a broker will most likely require the following information.
Your full address
Your Email address
Date of birth
Your chosen account currency type
Your chosen password
Your country of citizenship
Your social security number or tax ID
Your employment status
Your annual income and net worth
Your previous experience (if any) in trading and your objectives
A broker will need most of this information because there are different set of laws and regulations in each country. And all this information will be required to verify your identity. Regulations have been introduced so that the account holders are protected from any kind of harm and also because the Forex industry has become retail.
You should always do a thorough research on the broker with whom you are going to open an online account. Most of the brokers will ask for all this information mentioned above. If anyone is opening a Forex trading account for you without all this information, you should be suspicious and a little weary. You can search for the status of your broker through the National Futures Association (NFA).
Risk disclosures will be mentioned to you in the final steps of opening your Forex trading account. Brokers will keep you informed of all the risks of Forex trading so that you comply with the laws. It is very necessary that you understand all the risks associated with trading currencies. In Forex market, you will find a lot more number of losers than winners, so you should always plan your financial activities carefully.
After you have given all the information, the online Forex broker will verify all your information and keep a follow up with you. You should be always available with the supporting documents. Once all the formalities are complete, brokers will provide a speedy sign up process and they have an incentive to be efficient, since you will be providing them with business. Once you get your forex trading account activated, you will be able to fund it with your currency.
You may be planning to become a successful forex trader over the period of time. Read this article and you will get to know the most effective currency trading tips and become a successful forex trader.
The first and foremost thing is to know how the foreign exchange market works and moves. The currency trading market is influenced by a number of factors. It includes policy decisions, economic data releases, fluctuations in interest rates, etc. Therefore it is very necessary for the foreign exchange traders to spend quality time in understanding these factors and their possible results on currency trading.
A good foreign exchange trader will sell currencies at low interest rates and buy them with high interest rates. He has the required experience to find a ‘reason good and more than enough’ to support his or her findings about the market. Since the real money is invested in the currency trading, therefore a small mistake can cost a lot.
Foreign exchange traders should also know the art of managing risk. If they cannot analyze risk, it will be hard to be a successful forex trader. They need to have the financial stability and resources to take risks before anticipating profits out of them. Successful traders will not invest their money on uncalculated risks and this is what differentiates them from other traders in the market. They will make every possible effort to mitigate downside risk and always emphasize on trading strategies like stop losses and limit orders.
An experienced foreign exchange trader will concentrate on one or two currency pairs at a single point of time. This gives them more time to do a thorough research on a few and make more profits. It is much better than conducting superficial research on many and ending up with no profits or huge losses. It is always recommended to try few currency pairs, preferably major pairs that have better liquidity. Tighter spreads, and lower volatility. Avoid those currency pairs that are characterized by poor liquidity, wide spreads and volatile movements.
A good forex trader should stick to a long term plan and stay disciplined rather than changing plans every now and then in order to make small profits with extremely high risk trades. Investors dealing in forex trading should avoid feelings that are attached with a missed-out opportunity or trying revenge against the market or going complacent after winning a few trades or developing fear after a lost trade. These feelings might encourage an impetuous, irrational decision and should be avoided by all means.
Is forex trading too complicated to understand or does it sound like a scam. Well, if this is the case, then you will find many others feeling the same like you. Millions of traders have lost their money in the forex market numerous times. Forex trading is definitely not a scam. At times, it is quite confusing to understand. If you are finding hard to understand something, it does not mean that it is a scam. The forex market cannot be mastered with only few basic suggestions, you can start to get a better understanding of how to get successful in the market with the following four tips.
Stop looking for fool’s gold: One of the most common reasons of why people lose in the forex market is because they are preoccupied searching for fool’s gold. They believe in the hype that snake oil salesmen try to sell. The sales letters that claim instant forex riches mislead these traders and make them believe that they can get something for nothing. Most of the forex software sellers sell their products for just $149. Can it cost just this much? While there are some quality pieces of forex software out there, they are usually few and far between. Don’t get fooled in the market.
Invest your time: If you really want to successful and trade efficiently in the forex market, you need to invest your time. You should study the market and learn the basics of it. You cannot becomes successful in this market overnight. You have to spend years practicing and losing money before you can start making more money and consistently
Practice with a forex demo account: Once you have learned the basics of the forex market, you need to open a demo account and start practicing. You can easily get a demo account from forex brokers throughout the world. Download a demo account for free and start trading the market just like you would with a regular account. Many people have put their money in the live forex trading and lost it completely. This is usually a recipe for disaster. Do not open a live account before trying a demo account.
Use forex money management: If you want to make good money in the forex trading market, it is necessary that you strictly follow money management rules. Before opening a trade, you need to figure out exactly how much you are risking. Risking between one and three percent on each trade is a good proportion. If you can make this decision ahead of time, you will be very successful in the forex market. You must set up a money management system for yourself and stick to the rules.
It is very important to have a good forex trading strategy in the currency market because of so many unpredictable risks and you can never rely on just one single strategy in order to achieve success.
If you are a beginner in this market, you need to start your career by being prepared very strongly. Knowledge is the key to success, especially if such a career involves associated market risks that go back and forth unpredictably like a pendulum. You must fully understand how currencies are traded and priced, how market trends are noted and taken advantage of, technical analysis and other fundamentals that will minimize the risk of loss. You need to do a lot of research in order to move ahead in this market. But make sure that you do not jump into the river before you can swim.
Expert analysis of the market is the art of prediction based on historic trends and events that shaped the past. You should be well acquainted with the currency market as if it were the back of your hand. You should regularly read periodicals from a few years ago and go through all those books written by the leading players in the foreign currency market. Another way of staying in touch with what is happening and what can possibly happen is by constructing graphs of price fluctuations and interpreting it.
Price fluctuations do not happen all of a sudden. There are certain political, economic or social events that determine price fluctuations. Therefore, it is very important to stay up to date with all the events around the world.
For example, when a manufacturer removes a product from the market citing defects, it is a good indication that the currency of that particular country will suffer markedly. The same will apply for political events around the world. Any change in the government will result in a new economic policy that might not support profiteering to a point when such an economy will suffer.
Day trading is a safe move for beginners. The foreign currency world is riddled with many risks and is highly unpredictable. It is not a good idea to hold your position for too long as this could reverse your luck. You should always try to learn the best forex trading strategy, and you will be better served when making several small profits than losing out on a huge trade all at once.
Although most people have never even heard of it, the foreign-exchange market is by far the largest financial marketplace in the world. Each day over $4 trillion changes hands in this market! To put into perspective how much money that is, consider this: if you were to add up the average daily turnover in the New York Stock Exchange with the average daily turnover in every stock exchange in America, Europe, and Asia, the total dollar amount would still fall far short of the $4 trillion that changes hands each day in the forex market.
The reason most people have never heard of the forex market is because it is still very much in its infancy stages as an open marketplace. Until the late 1990’s, the only players allowed in the forex market were international investment banks, large hedge funds, and very wealthy individuals. It wasn’t that no one else was allowed to trade in the market by law, but the minimum contract size with most dealers was generally between $100,000 and $1,000,000; thus, anyone besides banks, hedge funds, and very wealthy people simple could not afford to hold even 1 single contract.
The advance of the internet and technology changed that, though. Today, a trader can open a small online retail forex account with as little as a $100 deposit. Retail brokers have negotiated with large banks such as Goldman Sachs, Bank of America, etc, and landed deals where instead of passing through single orders of $100,000, they pass through hundreds and hundreds of order each day for very small amounts, but in the end, there is still a large enough amount of order going through to keep the banks happy.
Forex trading has literally exploded in the last ten years. There are many advantages to trading in the forex market over the stock or commodity markets.
This is probably the single greatest draw for most investors, and, unfortunately, it is also the single biggest cause of traders blowing out their accounts and losing all of their money. In the forex market, traders can leverage up to 200:1 or even more with some brokers outside the United States. In the U.S., the National Futures Association has capped leverage at 100:1.
This means that after checking a forex broker review and depositing funds with a broker, traders can control a $100,000 position in the market with a $1,000 deposit. Any profits a trader earns with that $100,000 position, he gets to keep, but that size of leverage can easily kill an account. For example, if a trader is trading a $100,000 position in the forex market, then each pip is worth $10. If his account equity is only $1,000, then he can only allow a 100 pip move against him. Once he loses 100 pips, his account will be at $0. If a trader were taking multiple positions during a highly liquid time of the day, he could easily lose 100 pips in a matter of minutes.
24 Hour Market
The forex market is not a centralized market. Instead, it is a loosely connected network of international banks and large financial firms. Thus, the market never closes from Sunday evening to Friday late afternoon. Liquidity simply moves from one time zone to another. This allows traders to trade around the clock and they do not have to deal with gaps and overnight event risks.
Depth of Liquidity
The market is so large, liquidity is always present and the market cannot be manipulated by large players as stocks can.
Low Transaction Costs
Compared to the stock market, transaction costs in forex are a fraction of the price. On 1 single contract of $100,000, a round turn commission will usually range between $10 and $20.
The forex market has many advantages, and it is only going to grow larger as more investors become informed and aware of its many benefits.