One of the blessing of being house bound with broken leg [& stroke] was I could give my Forex Trading hobby full time attention. This is like the Stock Market but it's trades 24 hours a day and nearly 6 days a week through out the world. The Forex Market is the biggest market in the world. Currencies between 2 to 3 trillion dollars change hands every day. It starts off in Asia time zone with Australia, New Zealand & Japan etc, moving on to the European zone with London & Zürich time zones being the biggest, when it merges with the New York, American market later. Then when the USA market is closing, it's time for the Asian market to start a new day again.
Any currency can be traded against another one, but the popular one are the Euro verses USA Dollar, Gt British Pound verses USA Dollar and the USA Dollar verses the Japanese Yen. Followed by the USA Dollar verses Swiss Franc, British Pound verses Japan Yen and the Euro verses the Japan Yen. Then the Australian Dollar verses USA Dollar, USA Dollar verses Canadian Dollar brings up the rear on the popular currencies traded. But they many more, about every currency can be traded against another one somewhere in the thousands of Brokers and Banks doing this around the world.
The Forex Market is the largest market in the world. The amount of transactions dwarf what is traded on the Dow & S & P in America, probably reaching some 3 trillion dollars every day. But that's the problem, nobody knows how big it really is, because there is no actual physical market held in one place or city. All the currencies are traded in thousands of places in the Banks and Brokers all over the world. Many of 'the opposite side' of any transaction may [& can] be taken by the Bank or Broker and in the smaller transactions are.
This has caused many disputes in the past, but now most are 'somewhat' regulated by the major countries involved, like the USA, Europe & Japan and others. But it doesn't stop the Broker or Bank still taking the 'opposite side' of your trade or transaction. And why should they not? It is because of the very nature of Forex Trading and its leverage, 90% of traders loose. So if you have the 'side' of the trade, statistics prove that 90% of the time you make a profit. Remember, for any trade in anything there has to be 'two sides', a buyer and a seller, to make it happen. In the Stock Market most trades find another trader [perhaps], but in the Forex Market this doesn't always happen. The Brokers and Banks do not have to pass the trade along. First of all they is no physical market and secondly perhaps they want to trade for there selves. Being as most traders loose [90%] what better way than is there but to take the opposite trade/position for there selves.
Now I don't agree that this a good thing. I make sure any Broker I deal doesn't do this. In fact I much prefer to deal with a Broker that does not have any dealing desk and charges a small commission for every trade. This instead of the normal practice of building their fees and charges into the price of the Bid & Ask of the currencies. Most professional traders do this, where as most amateur traders will not pay commission. It is a state of mind when you start trading. You can't believe that the price can be manipulated by the Brokers & Banks. But when you had a few trades that either you were 'stopped-out' at the exact price and then the price reversed, or where the 'Spread' of the Bid & Ask was far too large, you start thinking again.... A Stop Loss is a price you put on your trade, so if the trade goes 'the wrong way', you get 'stopped out before losing too much. Well that's the theory of it. A few years ago some of the less from honest Brokers [& Banks] would manipulate the price to get traders 'stopped out'. Then the price would reverse without your trade.
In Forex you can 'Buy' or 'Sell'. Most [but not all] Share trading is just buying to sell later at a higher price. But in Forex you can 'buy or sell' straight away because you are trading against another currency. You can go either 'Up' or 'Down'. So if you think the American Dollar is weak. You Buy another currency and that is the same as selling the USA Dollar. It doesn't matter if you want to Buy, go Up [go Long] or Sell, go Down [go Short] it's easy with Forex.
The biggest thing to watch, apart from being wrong with direction of your trade is the Leverage that Forex Brokers 'give' to you. This might be 100 to 1 up to 500 to 1. The more Leverage means you can make more profit sooner, but when a trade goes the 'wrong way' and you start losing the Leverage will quickly turn your account into zero, if your not careful. Most new traders go and get the biggest Leverage they can. This is wrong it will contribute to them losing all the money. You should get the minimum, 100 to 1 and start really small.
Most new traders now use Metatraders free charting available here; http://www.metaquotes.net/en/metatrader4 or though most online Brokers. For trading 'Intraday' you can use 1min, 5min, 15min, 30min 60min and 4 hour chart. If you want to trade on a Daily basis, you can use the Daily, Weekly or Monthly charts. There are many 'indicators' in the Metatraders chart and thousands more online.
I have a few hundred myself, so if you email at dm@easy-success-online.com I will send them to you free. But there is no easy way to find out 'what works' and 'what doesn't', only hard work through testing. Because Forex trading is an Art, not a Science and every trader has a different idea on the use of an indicators. There are many sites online with free instruction, but one the best is BabyPips. The site can be found here; http://www.babypips.com/ They have a very free 'school'. If you thinking of trading, check them out.
Also Metertraders have a system called Expert Advisors. This is a way that an automatic system called be made or adapted to trade automatically for you. That's in theory.
Many Expert Advisors etc can be found at Forexisbiz here; http://www.forexisbiz.com
But see my earlier blog post about 'I am a real idiot to trade automatically.'
If you start trading, best of luck.
Well said my friend..
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