Introduction to forex trading
Copyright 2006 Richard Wright
Forex trading
Recently forex markets have been opened up to the average investor as it was the domain held exclusive to large financial firms, such as banks and funds management companies. Now days it's possible to start with $250 or less.
Forex trading is trading foreign currency and is traded in foreign currency pairs, for example: Australian / United States dollar which is represented as AUD/USD.
This means when you are buying one currency you are selling the other. Unlike shares you can trade in an upward or downward trending market.
A lot of times you will claims of forex been commission free trading which is not entirely true as the commission is in the spread, this is difference between the buying and selling price. For example when go to a currency exchange booth at an airport you may notice a board with different currencies listed with a buying and selling price, this is the spread.
The buying price will be less than the selling price.
Leverage This is a two sided sword that can increase your profits when the markets go your way. Should the markets go against you, it can multiply your loss. Some foreign currency brokers allow you leverage of 400:1, most will offer 100:1. This allows you buy $100,000 worth of currency with only $1000 margin deposit.
Leverage used, should be controlled as a trade going against you even slightly could wipe your entire trading funds.
Funds management
This is about protecting money from the trades that go wrong, by not having too much money on one trade. You will get wrong sometimes no matter how well you predict the market.
Put too much money on each trade is a recipe for disaster. A good guide would to only 2.5 and 4 percent on each trade.
You may setup trade using a stop loss and a take profit order, allowing the freedom of not having constantly sit in front of a computer watching the market 24 hours a day.
A stop loss will reduce the size of the loss by closing the deal at a preset level automatically.
Take profit will close the deal and take the profit made a preset level automatically, the opposite to a stop loss.
The difference between a good trader and a bad trader
The good trader has a system which they have tested and proven to work using solid analysis, keeping control of emotions. Has good money management skills
The bad trader trades by gut instinct (flying by the seat of their pants approach to trading), dominated by greed and fear with no proven system. Has bad money management skills and will risk too much on 1 trade. This is gambling, not trading.
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Day Trading the Forex Market Profitably - Part 2
Copyright (c) 2006 Avi Frister
To trade volatile and liquid markets
Since your job as a day trader is to capture intraday swings it is crucial that the market you are trading has enough movement to allow you to do this. It is also important that the market you are trading has enough liquidity so that order fills do not suffer from excessive slippage. You have to select a market that its volatility is permanent and not a temporary occurrence. Since you are basing your trading method on catching intraday price swings you have to know that you are trading in the right place. As a day trader volatility is your ally and you have to know that you can count on it every single day (or at least 90% of the days).
Liquid markets will provide you with good order fills. As a day trader this is very important since you are aiming at smaller profit objectives and hence larger slippage will eat away more of your profits. When trading several times a day this...
Forex > Day Trading the Forex Market Profitably - Part 2
Leading Canadian Discount Broker is Now Registered to Service Canadians in the Provinces of New Brunswick, Newfoundland, PEI, Saskatchewan and the Northwest Territories
(ContentDesk) December 5, 2005 -- Questrade, a leading Canadian discount broker, announced today that it is now registered to service clients in the provinces of New Brunswick, Newfoundland, P.E.I., Saskatchewan and the Northwest Territories. This truly marks the beginning of a new era for Questrade as we strive to maximize the profitability of all Canadians through exceptional client service and our superior direct access trading technology , states Questrade President and CEO, Edward Kholodenko.Questrade Inc. is a leading Canadian discount brokerage that offers investors high-speed, direct access to U.S. & Canadian stocks, options and global Forex markets. Founded in 1999, Questrade Inc. offers a variety of innovative products to serve all the needs of the Canadian trader.Questrade provides clients with a variety of PC and Web-based trading options.
Questrade clients benefit because they have exclusive access to advanced trading platforms, superior decision-making tools and...
Leading Canadian Discount Broker is Now Registered to Service Canadians in the Provinces of New Brunswick, Newfoundland, PEI, Saskatchewan and the Northwest Territories
Forex > Leading Canadian Discount Broker is Now Registered to Service Canadians in the Provinces of New Brunswick, Newfoundland, PEI, Saskatchewan and the Northwest Territories