www.MasterTrader.online
http://mastertrader.online/tms_harmonics_ph/
The foreign exchange market is also known as the FX market, and the
forex market. Trading that takes place between two cou...
The stock market has set business hours. Generally, this is going to
follow the business day, and will be closed on bankin...
International banks are the markets biggest users on the forex markets,
as they have millions of dollars to invest daily, ...
If you are interested in trading Forex, there are plenty of places that you
can go for great information. Forex for beginn...
You can trade Forex from home with relative ease. Trading Forex from
home is one of the most popular ways day traders and ...
Technical Analysis is the study of price movement. You can use price
charts to track the history of price movement and att...
The Bollinger Bounce. Most of the time, the middle band
stay in between the outer bands. Think of the outer bands
as the b...
Dots above the candles are a signal to sell.
Dots below the candles are a signal to buy.
Parabolic SAR works best when the...
Candle Sticks
What do Japanese candlesticks have to do with trading forex? A whole
lot.
Originally created in Japan (as th...
Fundamental Analysis
Any smart trader knows that in order to be successful they must be able
to analyze the market and pre...
That's a pretty simple concept, but judging the health of a nation's
economy is no easy task. There are many factors to co...
A major disadvantage of fundamental analysis is that it can be a little
too "big picture". It is great for predicting over...
The exchange rate tells you how many units of the quote currency you
have to pay in order to get one unit of the base curr...
As a trader, you will buy the at bid price, which is the first price quoted.
You will sell at the ask price, which is the ...
Put simply, a pip is the smallest unit of price for a currency. It's the last
decimal point in every exchange rate or curr...
So in our example above, when the exchange rate for
USD.CHF is 1.2489:
0.0001 / 1.2489 = 0.0000800704
That's a pretty tiny...
That 14 pip profit only made you $1.12.
But by using leverage to buy a lot size of $100,000 your profit increases.
0.00008...
Forex risks are always present when you trade Forex. Just like any
other investment vehicle, Forex trading does have its r...
Here are some tips that will help you to minimize the risk in your trading
business ..
The first Forex trading tip is to a...
Upcoming SlideShare
Loading in …5
×

Forex trading secrets and strategies for beginners

5,057 views

Published on

http://mastertrader.online/tms_harmonics_ph/
Forex Trading Secrets And Strategies For Beginners - Forex Trading Guide

Published in: Economy & Finance, Business
1 Comment
9 Likes
Statistics
Notes
  • try forex signals from http://www.algofy.com
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
No Downloads
Views
Total views
5,057
On SlideShare
0
From Embeds
0
Number of Embeds
7
Actions
Shares
0
Downloads
444
Comments
1
Likes
9
Embeds 0
No embeds

No notes for slide

Forex trading secrets and strategies for beginners

  1. 1. www.MasterTrader.online http://mastertrader.online/tms_harmonics_ph/
  2. 2. The foreign exchange market is also known as the FX market, and the forex market. Trading that takes place between two counties with different currencies is the basis for the fx market and the background of the trading in this market. The forex market is over thirty years old, established in the early 1970's. The forex market is one that is not based on any one business or investing in any one business, but the trading and selling of currencies. The difference between the stock market and the forex market is the vast trading that occurs on the forex market. There is millions and millions that are traded daily on the forex market, almost two trillion dollars is traded daily. The amount is much higher than the money traded on the daily stock market of any country. The forex market is one that involves governments, banks, financial institutions and those similar types of institutions from other countries. The What is traded, bought and sold on the forex market is something that can easily be liquidated, meaning it can be turned back to cash fast, or often times it is actually going to be cash. From one currency to another, the availability of cash in the forex market is something that can happen fast for any investor from any country. The difference between the stock market and the forex market is that the forex market is global, worldwide. The stock market is something that takes place only within a country. The stock market is based on businesses and products that are within a country, and the forex market takes that a step further to include any country.
  3. 3. The stock market has set business hours. Generally, this is going to follow the business day, and will be closed on banking holidays and weekends. The forex market is one that is open generally twenty four hours a day because the vast number of countries that are involved in forex trading, buying and selling are located in so many different times zones. As one market is opening, another countries market is closing. This is the continual method of how the forex market trading occurs. The stock market in any country is going to be based on only that countries currency, say for example the Japanese yen, and the Japanese stock market, or the United States stock market and the dollar. However, in the forex market, you are involved with many types of countries, and many currencies. You will find references to a variety of currencies, and this is a big difference between the stock market and the forex market. Forex trading uses currency and stock markets from a variety of countries to create a trading market where millions and millions are traded and exchanged daily. This market is similar to the stock market, as people buy and sell, but the market and the over all results are much much larger. Those involved in the forex trading markets include the Deutsche bank, UBS, Citigroup, and others such as HSBC, Braclays, Merrill Lynch, JP Morgan Chase, and still others such as Goldman Sachs, ABN Amro, Morgan Stanley, and so on. To get involved in the forex trading markets, contacting any of these large broker assistance firms is going to be in your best interest. Sure, anyone can get involved in the forex market, but it does take time to learn about what is hot, what is not, and just where you should place your money at this time.
  4. 4. International banks are the markets biggest users on the forex markets, as they have millions of dollars to invest daily, to earn interest and this is just one method of how banks make money on the money you save in their bank. Think about the bank that you deal with all the time. Do you know if you can go there, and obtain money from 'another' country if you are heading out on vacation? If not, that bank is most likely not involved in forex trading. If you have to know if your bank is involved in forex trading, you can ask any manager or you can look at the financial information sheets that banks are to report to the public on a quarterly baiss. If you are new to the forex market, it is important to realize there is no one person or one bank that controls all the trades that occur in the forex markets. Various currencies are traded, and will originate from anywhere in the world. The currencies that are most often traded in the forex markets include those of the US dollar, the Eurozone euro, the Japanese yen, the British pound sterling and the Swiss franc as well as the Australian dollar. These are just a few of the currencies that are traded on the forex markets, with many other counties currencies to be included as well. The main trading centers for the forex trading markets are located in Tokyo, New York and in London but with other smaller trading centers located thought out the world as well.
  5. 5. If you are interested in trading Forex, there are plenty of places that you can go for great information. Forex for beginners is usually very easy to learn and can be a great way to invest. If you are beginner and looking to trade Forex, here are some tips. There are tons of great places to learn Forex for beginners. Most Forex brokers have their own tutorials or even an ecourse dedicated to teach Forex to beginners. If you are just starting to look at Forex as a trading option, take a look at the following resources for Forex beginners. Forex stands for foreign exchange. Forex trades currency throughout the world 24 hours a day. Forex is a great way to trade from home because there is no central office and there are plenty of brokers offering their member traders great software that can run and trade off of their home computer. It is easy to invest in Forex if you are a beginner. You can open an account with a small amount of funds. Many Forex brokers allow beginners to trade with an account of only $250. For many Forex traders, you don’t even have to trade real money to check out a brokers system or to see if you like investing with Forex. Many brokers allow you to join their simulation trading platform, where you can trade in real time, except without real money. This way you can get the hang of it, before you invest a dime. If you are looking for a new investment vehicle take a look at trading Forex for beginners.
  6. 6. You can trade Forex from home with relative ease. Trading Forex from home is one of the most popular ways day traders and small investors are able to reach their investment goals from the privacy and comfort of their own home. If you are interested in trading Forex from home, here are some tips. Trading Forex from home is incredibly simple. There are plenty of brokers that enable you to trade in real time with great features. Finding a Forex broker is relatively simple, however you should put lots of thought into which features you would like, the information they provide their members and the ease of use of their trading software. Trading Forex from home is relatively easy once you have your computer set up and a broker picked out. Before you start to trade Forex with actual money, it is important to know all the ins and outs of trading Forex as well as how to conduct research and use your brokers Forex trading software. Many brokers allow you to try simulation trading. A simulation trading environment is where you can trade in real time foreign currencies with the actual software and features. The only difference between simulation and real trading is that with simulation software you don’t have trade real money. This can be an excellent tool to learn how to trade Forex from home. Finding information from home regarding Forex is also very easy with the help of Forex forums, broker trading resources and Forex charts. Many investors use the Forex forums to find out about new tools, spot trends in the market and hear commentary on new products or forecasts. You can also find loads of information at your broker’s site. Most brokers usually offer great charts to track currencies and plenty of articles that can fill you in on information that can help you trade. So follow the above suggestions to trade Forex from home.
  7. 7. Technical Analysis is the study of price movement. You can use price charts to track the history of price movement and attempt to anticipate which way prices will go in the future. Online forex brokers provide you with many different tools that are used in technical analysis. Some of the most common are listed below. Bollinger Bands Bollinger Bands are used to measure market volatility. They consist of three lines: 1. A simple moving average in the middle. 2. An upper band which indicates the simple moving average plus 2 standard deviations. 2. A lower band which indicates the simple moving average minus 2 standard deviations. When market volatility is high, the bands spread apart. When volatility is low, they come together.
  8. 8. The Bollinger Bounce. Most of the time, the middle band stay in between the outer bands. Think of the outer bands as the border patrol. When the middle brand approaches one of the border guards, it gets bounced away and back towards the middle. Hence the name Bollinger Bounce. This is useful to know because if you see the middle band approaching an outer band, there's a good chance it will bounce off. This strategy works best when prices are fluctuating and there are no clear trends. A good way to spot a trend early is the Bollinger Squeeze. When the bands squeeze close together, it often means that a breakout is about to occur. If the middle band breaks through either the top or lower band, the trend will usually continue to go in that direction. Parabolic SAR (Stop And Reversal) The Parabolic SAR indicator is used to spot trend reversals. It is perhaps the easiest indicator to read, Dots are placed on the chart in positions either above or below the candles (the formula that calculates where the dots go is too complicated to get into).
  9. 9. Dots above the candles are a signal to sell. Dots below the candles are a signal to buy. Parabolic SAR works best when there are clear upward or downward trends. It does not work well when price movement is small. Stochastics Stochastics is an indicator that is used to measure overbought and oversold conditions in the market. It consists of a scale from 0-100. As the stochastics lines are above 80 it means that the market is overbought and a downward trend could be forming. When the lines fall below 20 it means the market is oversold and an upward trend may be forming. Stochastics are useful in determining when to lock in profits and when to issue buy or sell orders. But you should never rely on only one indicator. Combine several and adjust them to your trading strategy.
  10. 10. Candle Sticks What do Japanese candlesticks have to do with trading forex? A whole lot. Originally created in Japan (as the name implies) several centuries ago to trade rice, candle charts are used by thousands of traders to track price movement. Most people find candle charts much easier to read than standard bar charts, and they have become incredibly popular. Most forex charts you see are japanese candlesticks. Candle charts are formed using the opening and closing prices, as well as the high and the low. If the price closes higher than it opened, a hollow candle is drawn (usually drawn in white or green in color). If the price closes lower than it opened, a filled candle is drawn (usually drawn in black or red in color). Most online brokers I've seen use the green/red color scheme rather than the more traditional white/black. Trends are easily spotted even by newcomers as green candles signify price increases while red indicates price decreases.
  11. 11. Fundamental Analysis Any smart trader knows that in order to be successful they must be able to analyze the market and predict price movement. This is true whether you trade in stocks, bonds, commodities, currency, or any other for of security. Analysis can be done in two different ways: fundamental analysis and technical analysis. Technical analysis is the study of prices. The goal is to analyze the history of price movement in an effort to predict future prices. Fundamental analysis is the study of a nation's overall economic health. I like to think of this as "Big Picture" analysis. The idea is that the strength of a nation's economy will affect the supply and demand for its currency, which will in turn affect the price of the currency. For example, let's assume that the US economy is in a major upswing. Since the economy is strong, the value of the dollar will be expected to rise and currency traders will invest heavily in the dollar. This bullish behavior becomes a self-fulfilling prophecy and the dollar rises in value.
  12. 12. That's a pretty simple concept, but judging the health of a nation's economy is no easy task. There are many factors to consider, and two traders may look at the same figures and interpret the data differently. Fundamental analysts look at various economic indicators for signs of an economies strength. Some of the indicators they analyze are the interest rate, unemployment rate, consumer price index, and gross domestic product (GDP). These reports are released regularly by various government agencies and non-government entities. You should find the latest schedule of upcoming releases and put them on your calendar. Keep an eye on them for a few months and see what effect they have on currency prices. One thing to keep in mind: it is not always the numbers contained in a report that have the greatest impact, but rather the relation of the numbers compared to what was forecasted. In other words, a rise in interest rates may not have a significant impact if forecasters were expecting it. But if they were expecting interest rates to remain steady and there was an unexpected increase, there may be a large impact on currency prices.
  13. 13. A major disadvantage of fundamental analysis is that it can be a little too "big picture". It is great for predicting overall economic growth and price changes, but it doesn't offer enough details to target specific entry and exit points. This is where technical analysis comes in. Reading Forex Quotes To a newcomer in the world of trading, forex quotes can be confusing. But they are actually quite simple to read. Let's look at an example of what a foreign exchange rate quote looks like: EUR/USD = 1.2526 Seems simple enough, right? This example shows the foreign exchange rate between the Euro and the US Dollar. It helps to remember that in any forex quote, there will always be two currencies quoted. This is because when you make a trade on the foreign exchange you are in effect buying one currency and selling a second currency at the same time. When reading forex quotes, the first currency listed is called the base currency. The second currency listed is called the quote currency. Forex quotes show us the price relationship between two currencies.
  14. 14. The exchange rate tells you how many units of the quote currency you have to pay in order to get one unit of the base currency. In the example above, the base currency is the Euro and the quote currency is the US dollar. The price quote tells us how each currency is trading relative to the other. In order to buy one unit of Euros you will have to sell 1.2526 units of US Dollars. Still with me? Ok, just one more thing to add to our example: the Bid/Ask spread. There are no commissions charged on any trades placed in the forex market. But brokers do get paid for their work through the bid/ask spread. Let's add the spread to our example and I'll explain: EUR/USD = 1.2526/1.2528 Or, this can be simplified to: EUR/USD = 1.2526/8 Brokers make their money by selling currencies at a slightly higher rate than they buy them. This is perfectly legal and all brokers do it, though the amount of the spread can vary.
  15. 15. As a trader, you will buy the at bid price, which is the first price quoted. You will sell at the ask price, which is the second price. The difference between the prices is called the spread, which is retained by the broker as their profit on the trade. In our example, you would buy at 1.2526 and sell at 1.2528. The 0.0002 (2 pips) would go to the broker as payment for executing the trade. The bid/ask spread is a simple and straightforward way to calculate trading fees and expenses. Understanding Pips To forex traders, everything revolves around pips. "I'm up 35 pips for the day." "I made a 127 pip profit on my last trade." That's great, but what's a pip? Pip is short for "percentage in point" and you may sometimes hear people refer to pips as points.
  16. 16. Put simply, a pip is the smallest unit of price for a currency. It's the last decimal point in every exchange rate or currency pair. For most currencies its 0.0001. So if you bought USD/CHF 1.2475 and sold at 1.2489 you made 14 pips. One common exception is USD/JPY. In this currency pair there are only two decimal places so a pip is equal to 0.01. The reason pips are so important is because they are the basis for calculating profit or loss. Pip Value. With all these different currency pairs to deal with and with prices fluctuating all the time, how do you know the value of a pip? It's a simple calculation. For currency pairs in which USD is the base currency, just divide a pip (usually 0.0001) by the exchange rate. For currency pairs in which USD is the quote currency, its even simpler. The pip value is always one pip (for example, 0.0001).
  17. 17. So in our example above, when the exchange rate for USD.CHF is 1.2489: 0.0001 / 1.2489 = 0.0000800704 That's a pretty tiny number. But remember that in forex trading you are able to leverage small sums of money to move large quantities of currency. In other words, you can use leverage to make big profits off of that tiny number. Let's say your broker allows you to trade with leverage of 100:1. This means that in order to buy a standard lot of $100,000, you only need to put up $1,000. You can see how trading in larger lots affects the pip value, and therefore your profit or loss: If you are only trading $1,000 in currency, the pip value is calculated as follows: 0.0000800704 X 1000 = $0.08 per pip. The price would have to go up by a whole lot of pips in order to make a significant profit at that rate.
  18. 18. That 14 pip profit only made you $1.12. But by using leverage to buy a lot size of $100,000 your profit increases. 0.0000800704 X 100,000 = $8.01 per pip. That's a profit of $112.14. Now you're talking.
  19. 19. Forex risks are always present when you trade Forex. Just like any other investment vehicle, Forex trading does have its risks. Here are some tips and information on the risks inherent in Forex trading as well as how to minimize some Forex risks. Forex stands for foreign exchange and Forex is the largest financial market in the world today with almost 2 trillion dollars worth of daily trades. Forex is a trading platform that many people can access from the privacy of their own home. There is no central market for Forex and you can enjoy 24 hour trading around the world each day. There are many people that sign up to trade Forex that don’t understand or take the time to learn how and why to trade Forex. There are many risks involved in trading any kind of asset, whether it is stocks, bonds or currencies. If you are interested in trading, make sure you understand Forex risks. One of the biggest Forex risks is a leveraged buy. Some Forex brokerages allow you to hold a certain amount of money in your account but leverage that amount to up to 200 times its worth. While this can be good if you are on the winning side of a trade, this can be devastating if you lose your entire accounts worth plus many times more. Many Forex brokers have special features that can limit your risks such as stop loss and limit orders and no negative balances. If you are interested in trading Forex, before you start to trade, learn and understand the Forex risks involved.
  20. 20. Here are some tips that will help you to minimize the risk in your trading business .. The first Forex trading tip is to always to remember that Forex trading like any investment is not a sure thing. Just like any type of investment or investment vehicle there are risks involved. No matter how much you research your data or how much thought you put into your trading, you can always lose money. Another important Forex trading tip is that if you are just starting out, learn as much as possible about foreign exchange trading. There are many theories, strategies and tools to help you trade Forex. Learn which tools are available and how to use them effectively. You shouldn’t decide to just throw money around into an investment and go with the flow. Forex trading is not a casino game and you can lose thousands of dollars of your investment. One of the most important Forex trading tips is to choose your trading broker carefully. Don’t just enroll with a trading broker because they offer you great incentives or have a great web site. Shop around; find a Forex trading broker that can help you reach your investment goals. There are plenty of Forex trading brokers and many of them might not have the resources to help you with your individual investment needs. www.MasterTrader.online

×