Trading Forex for Newbies

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.

I am an Idiot to think about Retiring...

I am an Idiot to think about Retiring....

When there so much to do. OK my age says, slow down. My physical is condition is far from perfect, after a stroke and a broken leg [see my post 'In China with Broken Leg'], but siting a front of my Laptop I can do anything, if it doesn't require much movement especially on my feet. Although 'stuck' in China at the moment, I have managed to get back to Perth, Australia every three months for over two years. This has meant 9 trips in an aircraft, from Shenzhen to Perth and 9 trips back again, usually a couple of days later. Some times 'one trip' means two flights with an eight hours wait in Kaula Lumper, both ways. It depends on if I go via Hong Kong, only 25 kilometers away, but so many hassles going over the 'border'. It is OK with immigration, you can virtually walk right through. But that's the problem, you have to walk, about a kilometer and go upstairs & down again in the customs hall on either side. Then you have to repeat it in 20 meters again on the other side of the border! H.K. is still a different country, or so we are told... It takes about 2 to 3 hours depending on the 'local' traffic of Chinese workers that number around a million going backwards and forwards each day.

The easy way out of Shenzhen is via the International airport situated about 40 minutes away from where we live. But the only flights to Australia have a long wait in K.L. It is not the best fun staying in a departure hall for 6 to 8 hours with your suit case and carry on case in a wheelchair. And being one handed as well. But I have done this a number of times, up to 4 times plus the return trip, every year.

 I use the 'LCC Budget Terminal', not the Main KL Terminal,  because of costs.I used to sit in McDonald's for eight hours, because they had the best.....air/cond, [not food!]. But then my good friend Clive told about a V.I.P.Lounge  that had opened on the 'air-side' in the Budget Terminal. The problem with is you can't check into an Australian flight more than 2 hours before. Why? no idea. If it is anywhere else, no problem. But after approaching the Management and telling them about the problems, they said, OK, just 'check in' via the Big/Large Cases and INSIST that you can do this because you are using the VIP lounge. And it worked. You have to pay about $30 'every six hours', but you can get all the food and drink you want and in comfortable surroundings. It is called the Plaza VIP Lounge. I think I used to spend more than $30 while in Maccas....ugh!!!!!

Why to do I have to travel so frequently? Being an Australian citizen and having a disability pension, my Lords & Masters, Centrelink, who give me my pension every two weeks INSIST that I do not go away from Australia for more then three months. They get very upset about it.... This is in spite of saving the Australian government heaps of money by me being 'away'. In fact they get upset with me on anything, saying I HAVE to inform then when I want to ANYTHING.

If I lived in Perth all the time, I would have to live in a nursing home, or get somebody to come and wash me and dress me every day. I could do 'most' things before breaking my leg, but know because of the stroke in that side, it has stopped me from bending it sufficiently to put my shoes & socks on, etc. Also after the break and two operations, my right side is 4 inches shorter. This makes walking without the 'special raised' shoe nearly impossible.

I have Lianny and her family to care and look after me in China. They do this very well and of course very cheaply. But Centrelink insists that I am trying to use a 'loophole' or take advantage of "their" generosity!! In my working past, as a business owner having six furniture stores and also being a commercial pilot, I paid heaps of taxes of various kinds, to the states and the federal governments. Now when I have a pension,  I must accept 'their' rules and live in a nursing home! Even I don't want to...

But this is IF you can find a nursing home with a vacancy! Because when my dieing wife, Geraldine, was terminally ill with M.S. for seven years, I tried for four years to get her admitted to ANY N.H. in Perth. I made repeated phones calls and wrote to so many, I was an embarrassment, but I couldn't find her a place. Because my wife was bed-ridden, I had to turn her over every 2 or 3 hours. She couldn't swallow either, so I had to feed her by a tube thru' her stomach as well. I had no help from anyone. We have a son but he is bloody useless. It took him all his time to phone his mother once week, never mind to visit her.

To make Geraldine happy, I used to send her flowers, and put one the 'message card' they were sent by our son!!! Now he and I do not speak. I think it's because I am disabled and I 'like' all things that are Asian, including the Asian ladies!!

Just before Geraldine died, I had a stroke!! My doctor said, it's not surprising... I spent six months learning how to talk and walk again.

So after all this, the Australian government, through Centrelink, think I have found a loop-hole in the system. They should try the travel 4 times a year, one handed in a wheel-chair...

Now apart from this rant about my pension, I want to tell you about retiring. Everybody tells you, 'when you retire, keep busy.'  This has been no trouble for me. I am now more busy than ever. Even with the stroke, but before breaking my leg, I managed to visit Bali, Malaysia and China for many weeks and months both with friends and on my own. The secret for me, was to find the 'back-packers' hotels online. They can be so cheap, but very comfortable, with hot & cold everything, including if you want air/cond. The average price for a room is about $15 to $20 a night. There are thousands online and I have never been disappointed with the ones I used for some 5 years. Plus using these 'cheap' hotels, you see more of genuine people & country as opposed to staying in the same old 5 star, that is exactly the same as the ones at home.

To be concluded in part two soon;
When I shall talk what keeps me busy now;

Foreign Exchange Trading and Making Money Online