Online Currency Trading – It’s Not For Everyone!

If you are a beginner to online currency trading, then you will have to do some research into what online currency trading is all about. Online currency trading is not gambling but you need to know what the investment is and how it works before you consider trading. But don’t misinterpret this and think that online currency trading is a get-rich scheme. Online currency trading is not a difficult process if you take your time, do your research and understand the market. Getting started investing in online currency trading is easy and painless.

The online currency trading market is a relatively new venture in the financial world with over three trillion dollars worth of transactions taking place everyday in the currency market. Online currency trading is now available to everyone, and is without a doubt, the fastest growing market. Online currency trading is all done through the Foreign Exchange or FOREX. Online currency trading is becoming a popular way for investors to broaden their horizons; however, the competition to dominate online currency trading is intense. Online currency trading is the future of the Forex trading market and is available to everybody these days. The Forex trading market has become the biggest financial market in the world today and online currency trading is now one of the fastest growing.

Since Forex is based on the Internet, you can make use of online currency trading services to operate within the market 24 hours a day. Try a free Forex trading demo for 30 days with a reputable Forex broker to see if this is something that you want to get into. Some Forex brokers even offer free day trading training on their award-winning, online currency trading system. Forex trading has become increasingly popular in the last few years, and companies that offer Forex trading software and foreign currency exchange services that emphasize Forex trading strategies, are the key to successful online currency trading. But how do you know which strategies to use and when to use them? Again, many reputable Forex brokers offer free guides to Forex online currency trading charts, products and services, with all the latest news. Take advantage of this!

Forex Currency Trading, Forex Trading, Forex, Online Currency Trading brokers offer 24 hour online currency trading for institutions and professional traders as well as for the average investor. One of the more recent paths to capital is currency trading online, but be aware, there are no guarantees or a sure thing. You need to do your homework and understand completely what you are doing. There are many helpful links on the internet that are available for you to learn what currency trading is all about. There are over 60 currency pairs for you to trade on; however, usually four major currency pairs are used for investment purposes.

Most brokers and brokerage houses now offer online trading to their clients and you can discover the POWERFUL POTENTIAL of FOREX Trading. Be advised that trading currency on a forward basis is not permissible. Currency trading has grown dramatically over the past 10 years and that then paved the way for companies to set up online currency trading known as Forex trading.

Online Currency Trading is not a difficult process if you take your time, do your research and understand the market.

Online currency trading is not about taking a chance, but you have to know what the investment is all about and how it operates before you look at doing any trading. The online currency trading market is a relatively new venture for the financial world and the book “What you get out of Insider Secrets of Online Currency Trading” can be very helpful if you apply the principles set forth. Of course another way to learn Forex online currency trading is through a course or workshop; however, “Insider Secrets of Online Currency Trading” is one of the most valuable resources you may ever find for Forex trading. But if you’re interested in learning a new skill and making some money from it, maybe online currency trading is for you.

Currency Trading Markets: Important Facts a Trader Should Know

Currency trading markets around the world serve as trading anchors and worldwide decentralized markets between buyers and sellers of different currencies. The values of the traded currencies are speculated by the participants. When you participate in a foreign exchange currency deal, you buy one currency and pay in another currency.

As background info, the currency trading market originated in 1944 after World War ll with the institution of the International Monetary Fund. It tied up the major currencies to the US Dollar which was the least affected at that time. Subsequently, the market was converted to a global free floating currency system in 1978.

In view of the technological advancements provided by the computer and the internet age, the speed of international monetary transactions greatly increased. In the foreign exchange market, the most traded currency pairs are the EUR/USD, USD/CHF, GBP/USD and USD/JPY. So far, the UK has the biggest volume of trading in currency followed by the United States and Japan.

According to reliable estimates, the trading center in London, UK has accounted for an increase in foreign currency transactions from 34.6% in 2007 to 36.7% in 2010. This is why the London market price is the usual quoted currency price in FX trading. The New York, HongKong, Singapore and Tokyo are also very important currency trading centers which transact with banks all over the world. Currency trading goes on systematically. As the Asian trading session finishes, the European session starts. Then, the North American trading session follows and it completes the cycle. Then it goes back to the Asian session.

When it comes to the market participants, they are composed of central banks, commercial banks, investment companies, hedge funds speculators, money remittance companies, non bank forex companies, forex fixing groups and the individual retail speculative traders where you can belong. The retail investors segment has grown rapidly due to entry of retail forex platforms. This group usually trades through brokers/dealers or banks When you deal with a broker, he tries to negotiate the best price in the market for a transaction and charges a mark up fee. You can deal with various dealers particularly those who have connections with the large forex trading banks. These dealers usually get better pricing due to their large transaction volumes. The biggest currency trading banks as of May, 2011 are the Deutsche Bank, Barclays Bank, UBS AG, Cityi, JP Morgan, HSBC, Royal Bank of Scotland, Credit Swisse, Goldman Sachs and Morgan Stanley.

If you are serious in getting into forex trading, knowing some historical facts will be of some good use to you. Trading volume had jumped from a billion dollars a day in the eighties up to almost $2 trillion a day. According to the latest figures, from daily trading volume of $2 trillion, it has grown to over $3 trillion broken down to $1.4 in spot transactions, $475 billion in outright forwards, $1.765 trillion in foreign exchange swaps, $43 billion in currency swaps and $207 billion in options and other products. In 2010, can you imagine that retail trading has grown up to $150 billion volume a day?

The phenomenal rise of electronic execution technology and the various transaction centers have reduced execution costs, developed bigger liquidity and attracted more participants. With the use of online electronic trading, transactions and executions became a lot more convenient for retail investors to trade in the foreign exchange market. Foreign exchange rates are governed by market psychology perceptions, economic factors as well as political conditions. Well experienced forex traders always keep themselves updated with latest developments. Marked by the market’s extreme liquidity, it has become a global and popular trend among the retailers group composed of individual traders to invest in currency trading markets.

What Are the Benefits and Danger of Online Currency Trading

Currency trading in simple terms means trading of currencies. The currency trading market is the largest financial market in the world with the daily volume of trade being more than $2 trillion. This is far more than the approximate $50 billion worth of transactions that take place at the New York Stock Exchange. Currency trading is, in other words referred to as forex or FX, which is the short for foreign exchange.

Each country in the world has a currency and these currencies have their own value in relation to one another. These values are not fixed or permanent but keep fluctuating due to several reasons. The first of these reasons is the presence of the real market. We live in an open market scenario where countries have trade with other countries. In this regard, the corporate firms and business establishments doing overseas business need to send and receive payments to and from other countries. The demand and supply of these currencies then lead to changes in their value. The other reason for the fluctuation of the value of the currency is speculation. In the recent years, the second reason has become the prime reason for the currency value fluctuation as more traders are getting into the currency-trading arena with a view to make profits from the change in the currency value.

Currency trading, until a few years back was limited to large financial conglomerates and banks. These were considered the movers of the forex market. However, with the recent advancement in technology and the inclusion of newer types of financial instruments for trading has made the forex market available to the retailers as well. Individual investors, too, can now benefit from the enormous returns available at the forex market and that too at a lower risk and with no extra market knowledge.

Until a few years back, the best option to invest was the stock market. However, with the stock markets around the world taking a beating due to different reasons, people have migrated to other financial instruments, forex being one of them. Currency trading provides several benefits over traditional stock trading. Some of these benefits are:

The low spreads available in currency trading is a good reason for a trader to enter the market, as the costs to him are low.
There are very good chances of earning high profits as there is high volatility in the currency market. Therefore, a trader can generate high returns with a small price change.
Leverage: probably the most appealing factor, leverage is the facility of using different financial instruments like margin accounts to enhance an investment’s probable returns. The leverage ratio for stocks can be as high as 100:1, whereas for the forex market, a leverage ratio of 400:1 is common.
Lesser choice is beneficial: considering the listed stocks, an investor has to choose from a large number of stocks. In comparison, when forex trading with the major currencies, the choice is limited to just five to six. Therefore, with lesser choice, a trader is able to maintain his focus and prepare his trading plans. He can concentrate on a particular currency pair and accordingly conduct research and make his advances.
Earning both ways: there are no restrictions to short selling in the forex market. This means that an investor can earn both ways. He can go short or long. This means that there is profit potential either way, though a trader must remember that the risk factor is also there.
No intermediaries: stock trading has to be carried over through a broker. However, there are no such intermediaries in forex trading. Since there is no central location or market for currency trading, all transactions are routed through the currency selling financial institution. This is beneficial for the investor as there are no additional costs and the deals get finalized directly. Moreover, there are no commissions by these brokers as their charges are included in the bid/ask prices.
Not be influenced easily: the forex market is enormous and this makes it nearly impossible to get influenced by forces, external or internal. Fluctuations in currency value occur due to economic factors or such factors, which are beyond the control of the market movers. Therefore, the banks, the government and even hedge fund managers are not able to control or manipulate the working of the currency trading market. It is the sheer size of the currency market, which insulates it from being influenced.
Round the clock trading: the equity markets are driven by the opening and closing bells of their respective stock markets. However, this is not the case with forex trading, as this market is accessible round the clock. Investors can place their trades at any time during the day, as there is the time difference between the various markets such as the European, Asian and the U.S. An investor can thus schedule his trading time and trade conveniently.

With so many benefits in favor of the forex trading, it is not a surprise that traders are supplementing their equity portfolios with forex trading. However, it is an individual’s perception of diversifying his investment portfolio. Some traders have foregone stock trading completely in favor of currency trading while there are some investors that have partial stakes in both.

Foreign Currency Trading Explained

I am sure that you would have seen Foreign Currency Trading at some stage while looking at news – CNN maybe – and wondered as I used to – what is this all about. I mean, all the strange terms and names that you hear no where else but when this segment of the news comes around: what are they and what do they mean. These are some of the question I used to ask myself so very often in the past. In fact, even now as I am writing this article, with the television on, a whole lot of information is flowing constantly across the bottom of the television screen about NASDAQ, DOW and a host of figures. This always confused me. Well I will explain as much of this as I can in this article and other related articles.

First of all, foreign currency trading – also called FOREX trading among other names – is a market in which various currencies are traded. It is the biggest and the fastest growing market in the world with a daily turnover of more than 2.5 trillion dollars. This is more than 100 times greater than the NASDAQ daily turnover.

NASDAQ stands for National Association of Securities Dealers Automated Quotation. It is the world’s first computerized stock trading system, and provides price quotations for more than 5000 traded stocks.

It is the synchronized exchange of one currency for another. As a potential investor, your primary reason for wanting to buy or sell currency will be to make a profit – correct? The general idea will therefore be to buy when the price is low and to sell when it is high. In looking at financial news, you may have heard the reporter speak of changes in the value or rate of the currency. Well this change can be driven by a number of factors including market news, or events that happen across the globe. The decision to buy or sell currencies must therefore be an informed one to further reduce your risk of losses.

Now, just as a market is a place where goods are traded, so too is the Currency Trading market a ‘place’ where different currencies are traded. Just as you would have buyers and seller in a more traditional form of a market, so too you have buyers and sellers at the FOREX market place. Now in the traditional marketplace selling ahhhh… – let’s say vegetables and other produce – a number of factors will determine the selling price of the merchandise. Some of these factors include the number of buyers there – which translates to demand; the quantity of the goods that are available, which is supply. The price of the item will be affected by any event that impacts either negatively or positively on the supply or demand for the item. For example, if there was a major flood at one of the main producers of the commodity that caused most of their stock to be destroyed, then this will most likely cause the price to increase because the supply has been decreased because of the flood. If the supply is high, or even normal, but some event caused the majority of buyers to stay away, this will result in an over supply and can result in a lowering of the price of the item.

The same principles of supply and demand take place in the currency trading marketplace, where the goods (or merchandise) are the various currencies such as Euro, US dollars, Japanese Yens, Pound Sterling, Canadian dollars and more.

Profiting in Forex Currency Trading

As mentioned earlier, your main goal in trading Forex is to make a profit. In layman’s terms, you do this by buying a currency at one rate and selling it when the rate is higher. The profit you gain is as a result of fluctuations in the market due to various factors that affect supply and demand.

Now this is an important point. The big thing about trading currencies is that normal daily fluctuations have a multiplier effect. Very often, you can acquire trading ratios from 1:50 to as much as 1:200. Let us assume that the rate of exchange of your pair of currencies increased by .5%, then your profit can be as much as 50% on your initial investment. The other point to note is the speed at which fluctuations can occur.

What about the risk?

In the example I have just listed, as an investor you can reap that kind of profit margin in anywhere from one day to a couple hours. Apart from this, you will never lose more than your margin. You can earn very high profits, but you will never lose more than your margin. It matters not whether the exchange rate is going up or going down, you can still make a profit. The other great thing about foreign currency trading is that you do not have to physically own any of the currencies to perform buying and selling transactions.

Starting online trading

While of shopping around for the idea trading platform, you should definitely look for one that is easy to use. Unless you are a seasoned it economist, the average person may find the whole concept of trading currency a bit of an ear full, and somewhat difficult to grasp. Here are some features to look for in a good trading platform:

As a trader, when you accept your rate, is it executed close to the rate you set or exactly on it?
Is the currency trading platform user friendly and easy to use? Will you have to download any applications onto your computer before you can start to trading?
Can you start immediate trading without any obligations?
Once you have registered with the trading platform, can you trade anytime and anywhere? Will you be able to access your account information from anywhere?
How easy will it be for you to make a deposit to your account? Will you have to miss out on a potential trading deal because the trading platform does not accept instant deposits?
As mentioned earlier, foreign exchange trading, as intriguing as it is, can be quite challenging to grasp. With this in mind you will definitely at some point in time, require personal assistance in dealing with some of the challenges you will face. An important feature to look for in a potential currency trading platform is how readily will live assistance be made available to you? Will you actually be able to speak with a real person when you need to?
Will you be trained online? Will the training be detailed enough for first time forex traders to understand? Will the trading allow you to interact directly with the currency trading platform? Will it be step by step so that you can fully understand how the system works?
Will you be required to start trading with the large investment, or can you start trading with a small amount and work your way up as you become more comfortable with the system?
One of the common complaints that I have heard over the years has been about financial institutions and their hidden costs. This is something that you will definitely want to look out for in your foreign currency trading platform. Are there any hidden costs?
Then there is the whole question of the safety and security of your transactions. How safe and how secure will your transactions be?
Now I can’t imagine a trading platform operating online without this, but it is worth mentioning anyway. Will real time trading and quotes be streamed? Will these quotes be up to date, and how reliable will they be?

These are just some of the many features you should look for in an online foreign exchange trading platform. I have personally found that Easy-Forex addresses all of the above issues and more in a very positive light, and makes online trading very easy, comfortable, comprehensive and affordable for traders – regardless of what your level of experience is.

Currency Trading Systems – Making Money from the Longer Term Trends

Currency markets never sleep and several trillions dollars are traded everyday, making currencies the world’s biggest and most exciting investment market.

In recent years, mechanical currency trading systems, using technical analysis to predict trend movements have become increasingly popular as a way of locking into, and profiting from the longer term currency trends.

Making Money from the Longer Term Trends

Currency trading systems are ideal for making profits from longer-term currency trends, and they occur in all currencies.
The longer-term trends in FOREX markets reflect the health of the economy.

As economic cycles are relatively long and take years, so do the currency trends that reflect these cycles.

A good currency trading system can enable traders to lock into, and make profits from these longer-term trends.

When choosing currencies to trade, it is important to have good long-term trends, but just as important is liquidity, which enables traders to lock in profits and exit losing trades quickly.

Currencies that offer good trends and liquidity include:

· The US Dollar

· Swiss Franc

· Euro

· Japanese Yen

· British Pound.

Currency trading systems remove emotions from trading, which is the major reason the majority of traders end up losing.

Removing the Emotion from Trading with Systems

There has been plenty of material written about using currency trading systems, and the works below provides informative reading for anyone thinking of using a currency trading system.

Traders should try to read the following authors:

Edwin Lefeurve, Jake Bernstein, Larry Williams, Ken Roberts, Van Tharpe and Jack Shwager whose books “Market Wizards” and “The New Market Wizards” interview some of the most successful traders of all time, including the “turtles”. The Turtles are group of traders who had no prior trading experience, but went on to earn hundreds of millions of dollars, using very simple mechanical trading systems.

Currency Trading Systems that Make Money

The developments in recent years in computer software, the growth of the Internet, and online trading, has seen currency trading systems become more popular than ever.

Software Packages such as Tradestation, Supercharts, Omni trader, and many more, allow traders to back test systems, using a variety of technical indicators that include:

· Stochastics

· Bollinger bands

· RSI

· moving averages

· ADX

And many more.

The currency trading system picked can then be analyised, to see how it would have performed in the markets with commissions and slippage deducted.

Traders, who don’t want to develop a currency trading system, can buy systems off the shelf from vendors.

How do you Choose a Successful Currency Trading System?

If you are buying a currency trading system, there are several things to consider before parting with your hard earned cash:

1. Are you interested in being a day trader, or a trader looking for longer-term trends? You need to pick a system that you’re comfortable with and this is mostly down to personal preference. Some traders like the excitement of day trading others prefer a longer-term approach.

2. Do you want to have any input into the system, or do you want it to be totally mechanical?

3. Do you want to trade just one currency, or a basket of currencies? Using a currency trading system that trades just one currency can be more profitable but keep in mind, the converse is true, i.e losses and drawdowns can be larger.

4. When choosing a currency trading system you need to have confidence to trade with it, and follow the system through losing periods. To do this you should know the logic the system is based upon. If you understand the system and its logic, you will derive confidence and be more likely to follow it – in contrast to one where the logic is not revealed.

5. What are the average profits you can expect in relation to drawdowns? All currency trading systems will have periods of drawdown and losses. Generally the larger the profits the bigger the drawdowns tend to be over time – so pick a system that reflects your investment aims and risk tolerance.

6. When you are buying a currency trading system, check out the system seller’s experience, track record, customer support, – and whether they have a real-time track record, or a hypothetical one.

A real time track records means the system has performed in the market and made money, i.e it’s proven. Trading systems that simply rely on hypothetical track records mean they have been back tested, – and with the benefit of hindsight we can all make money!

While hypothetical track records should be treated with a degree of caution, you can find out a lot about whether the system is likely to make money, by knowing the logic the system is based on.

When considering a hypothetical track record, look for one where the logic is revealed and not a “black box” system where you have no idea how to system works.

In conclusion, you can make your own currency trading system, or you can buy one from a vendor – when choosing one from a vendor make sure you do your homework, and remember – if it looks too good to be true, it probably is!

Currency trading systems can, and do make money, and the effort you put into finding the system that suits your personality, risk tolerance, and profit objectives, will be time well spent.

Currency Trading Guide – Get Started Today!

What is Currency Trading?

Currency trading is the buying and selling of currencies from around the world. It is the largest and most active trade happening, making trillions of dollars daily. Unlike other trade like stock exchange, currency trading has no specific time of trading. It happens 24 hours a day, 7 days a week.

Currencies

In currency trading, there are currency pairs. A currency pair consists of two currencies, one of which is being bought and the other is the currency used to buy the other currency.

Take a look at this example: GBP/USD where GBP is the British Pound. The GBP is what we call the ‘base currency’ which has the initial value of 1. This is the currency being bought. Next is the USD or the US dollar. This is what we call the ‘quote-currency’ and has the value of how much one of the base currency is worth. For example: EUR/USD 1.2436, one Euro is worth 1.2436 US dollars. If you need 1000 Euro, you’d have to exchange it for 1243.6 US dollars. Other major currencies traded are Canadian dollar (CAD), Japanese Yen (JPY), Australian dollar (AUD, and the Swiss Franc (CHF).

The Spread

In currency trading, a currency pair has a corresponding ‘bid’ and ‘ask’ price. The ‘bid’ price is how much the base currency is being sold by the currency broker while the ‘ask’ price is how much the currency is being bought by the trader. The bid price is usually lower than the ask price and this is where sales are made by the brokers. The difference between the ‘bid’ and ‘ask’ price is called the ‘spread’.

Changes in the Currency Values

Knowing how currency values changes is important in currency trading. In a nutshell, buy a currency when its value is low and sell it when its value is high. The changes in currency values depend on political and economic events. Foreigners going in a country triggers currency exchange as well as large purchases of commodity from one country to another. Also, we should not forget the influence of speculators in currency trading. They speculate on the increase or decrease of value of a currency therefore will make decisions in advance. It is important to be updated in these influences to the trade to be able to keep up with the fast-paced volatility of the currency trade.

Why Venture on the Currency Trade?

As mentioned, currency trading occurs 24 hours on a daily basis. Traders can decide when to trade their currencies. As changes could happen any time, the trader should always keep watch on the best time to trade. Currency trade does not need a big capital to start. Beginners can start with small amounts and eventually increase their trading resources. There is also no need to play on all currencies on the market. A novice can focus on two currencies at first while getting the hang of it and then expand later on for bigger profits.

Risks in Trading

Naturally, like all trading, there are risks. A trader should keep in mind that the risk in currency trade is high and wrong decisions could lead to losses. Playing safe is okay but the higher the risks, the higher the profit. Decisions are vital so it is best to ask advice from the expertise of brokers whenever necessary.

You Can Increase Your Income by Currency Trading

There are lot of business in the world from which one can make his good fortune. Currency trading is one of these businesses. You can earn a good income from this business. You need to be much conscious in the business and should know the basic characteristics of the currency trading.

In the past, only the financial giants and big multinational companies were allowed to trade currency. Now the technology innovations have made currency trading easy for all. You just need to be online and may start to trade currency.

Forex is the name given to this currency trade market in which powerful currencies of the selected developed countries are exchanged. These currencies include USD, GBP, EURO and a few others. You need not to stock any of these currencies for currency business.

The currency trade depends on the credit agreements. All the transactions in the trading market are regulated by the words of honor. All traders in the market honestly abide by these words of honor.

You should be well versed with the usual terms of this market before you start online currency trading. Sometimes you may face loss on your capital investment in this currency market due to lack of enough knowledge.

There are always ups and downs in the currency trade market. This fluctuation in the forex market is the basis of profits and is motivated by several factors. You will sell a currency with a lower rate of interest. This fund is to be used for buying another currency with higher interest rates. This difference in the rates of the interest fetches you the profits for which you are in the currency trading market.

The monetary value of a certain currency depends on its supply and demand. The foreigners visiting to your country will need the currencies of your country to buy goods and for other expenses.

Similarly the local residents of your country planning foreign tours will require the currencies of their destination countries. So the values of currencies fluctuate with the invasion of the foreign currencies in a certain country.

The market position of a currency is also responsible for the fluctuations in the currency’s value. People buy and sell the certain currencies based on the speculation in the currency trading market.

The market value of a certain currency also indicates about the health of economy of the country to which that currency belongs. The high value of the currency is an indication of sound economy of belonging country.

Let us sum up the benefits of trading currency. You need not to have a huge capital amount to start currency trading business, although the market was restricted to corporate investors in the past. You may earn huge gains even in a single deal when the market is in your favor.

If you have enough knowledge about currency trading then there is a minimal risk for you in trading currencies.