- Trade according to the Trend - Trend is just like the current in the sea. It is hard to swim against the current. So as market. No matter you invest long term or short term, you must invest according to the trend. So I think the first basic step that we should learn before we jump into market is learning how to read trend.
- Stop loss - We are not a god, and we make mistakes often in life or in Forex. To survive, we must learn how to protect ourselves from big losses. An Exit and Entry strategy should be planned before investing in Forex. Be discipline and always trade according to your plan. Be flexible and modify your plan from time to time to meet your trading behavior.
- The Resistance and Support - Knowing how to read and analysis the resistance and support level is a basic but important investing skill in Forex trading. Every one of us hopes that we can earn big but loss small in trading. In forex, the price does move in a straight line. It move in a current format - up and down. This is because the effect from the resistance and support point and also the real time trading (buy and sell) of investor. So you can maximize your profit if you know the resistance and cut down the losses if you know the support.
Monday, August 4, 2008
Invest in Forex - 3 Unchangeable rules in Forex Market
how to invest in forex ?
Step1
Learn how to read a forex quote. This is a ratio of one currency to another. USD/EUR is the price of a US dollar as expressed in Euros. The currency listed first is the base currency (usually the stronger currency at the time of the quote) and is given a value of 1. The second currency is the counter currency and derives its value in relation to the base. If the USD/EUR quote is 1.21, that means 1 US Dollar has the same value as 1.21 Euros. Step2
Understand the definitions of pip and spread. Prices in foreign exchange are expressed in pips--percentage in points. The pip is the number in the fourth place from the decimal point, or 1/100th of 1 percent. If USD/EUR is 1.1300/1.1304, there is a 4-pip spread between the two currencies. Step3
Learn about bid and ask. The "bid" is the selling price for the base currency and the "ask" is the price to buy the base currency. Both transactions are done simultaneously. Step4
Learn about leverage and margin. Leverage is the ability to trade without having to put up the entire amount of the transaction. Margin is the minimum amount required in order to participate in a trade, usually 1 to 2 percent. The forex market allows higher leverage because major currencies are less volatile than stocks; higher leverage also allows amplification of both profit and loss. Because of this, the forex market is more volatile than the stock market. Step5
Select a mutual fund. Unlike the stock market, the forex market has tiers of access. An individual investor would find it difficult to gain significant access. Furthermore, in a 24-hour market, it is difficult for individuals to keep track of investments with any degree of vigilance. Most retail investors work through specialized mutual funds. Search online for managed funds to choose from. Your choice will depend on your desired level of risk, the fund's past performance, the fee structure, and restrictions on deposits and withdrawals.forex for beginnners
FOREX is the abbreviation for the Foreign Exchange market. FOREX is basically an international exchange market where currencies from all over the world are bought and sold for profit. The market today began in the 1970’s. FOREX is a very unique market because it is not based in any particular place, and it also has very few qualifications for investing. FOREX is also free of external controls, and the investors (participants in the market) largely determine how much a currency is worth based on demand. Almost anyone can invest in FOREX, and there are strategies for investors who want to have long-term gains, and strategies for investors who desire short-term gains. The vast array of investors makes FOREX quite unique in the financial community.
The Workings of FOREX
FOREX is not centered at one place like the NYSE. The specific hours for FOREX trade are 24 hours a day from Sunday afternoon to Friday afternoon. FOREX transactions can take place at almost any time, anywhere, all over the world. There are FOREX dealers in almost all of the time zones, and it is simple to find them. Many dealers can be found online. All an investor does is decide what currency he or she wants to purchase, contact the dealer, and then makes the purchase. Many investors purchase using a credit line (money they do not have). This is called marginal trading.
What is Marginal Trading?
Marginal trading is a term used for trading with borrowed capital. FOREX investments can be made without actually having the money. All an investor needs to do is borrow the money for a certain currency. The investor wants to choose a currency that will increase in value quite rapidly. Once the currency increases, the investor pays back the money he or she borrowed and makes sheer profit. This is a high-risk investment, but the rewards are great (as with most high risk investments).
Two Types of FOREX Analytics
FOREX traders often have to analyze the market. Like all investments, FOREX involves a certain amount of calculated risk. Two ways to calculate these risks are though Technical Analysis and Fundamental Analysis.
Technical Analysis is based on the idea that trends through history will continue. A FOREX investor will notice that a certain currency is very strong and seems to be rising at a normal rate. The same investor will also suppose that the currency will not decline in value, and will continue to rise, as it has done in the past. The investor then purchases a large amount of that currency and expects to make a profit. This investment entails a large assumption but is relatively safe.
Fundamental Analysis is an analysis of an entire countries situation. Investors utilizing this technique look at the situation of the country in which the currency finds its base. Factors such as the countries economic status, political status, and global status are taken into account. For example, a Fundamental Analysis investor would not invest in currency from a country that just overthrew its leader and is in political shambles. Although this investment seems logical, it does not take into account one of the fundamental elements of FOREX trading. FOREX currency values are largely determined by the investors. That being said, Fundamental Analysis assumes that other FOREX traders will view a countries situation in the same way and respond accordingly.
Benefits of FOREX
FOREX can be very beneficial to a variety of people. FOREX trading can gain investors a large amount of money either over a long period of time, or in a short period of time. Investors who choose to invest in FOREX are generally well informed about the market and understand the current situations in many countries of the world. Investing in FOREX is simple and highly recommended for anyone who wants to enjoy profits from top-notch investments.
Mary McDowski is very interested in investments and finances. Learn more about FOREX at ( http://www.forexreader.com ).
The Workings of FOREX
FOREX is not centered at one place like the NYSE. The specific hours for FOREX trade are 24 hours a day from Sunday afternoon to Friday afternoon. FOREX transactions can take place at almost any time, anywhere, all over the world. There are FOREX dealers in almost all of the time zones, and it is simple to find them. Many dealers can be found online. All an investor does is decide what currency he or she wants to purchase, contact the dealer, and then makes the purchase. Many investors purchase using a credit line (money they do not have). This is called marginal trading.
What is Marginal Trading?
Marginal trading is a term used for trading with borrowed capital. FOREX investments can be made without actually having the money. All an investor needs to do is borrow the money for a certain currency. The investor wants to choose a currency that will increase in value quite rapidly. Once the currency increases, the investor pays back the money he or she borrowed and makes sheer profit. This is a high-risk investment, but the rewards are great (as with most high risk investments).
Two Types of FOREX Analytics
FOREX traders often have to analyze the market. Like all investments, FOREX involves a certain amount of calculated risk. Two ways to calculate these risks are though Technical Analysis and Fundamental Analysis.
Technical Analysis is based on the idea that trends through history will continue. A FOREX investor will notice that a certain currency is very strong and seems to be rising at a normal rate. The same investor will also suppose that the currency will not decline in value, and will continue to rise, as it has done in the past. The investor then purchases a large amount of that currency and expects to make a profit. This investment entails a large assumption but is relatively safe.
Fundamental Analysis is an analysis of an entire countries situation. Investors utilizing this technique look at the situation of the country in which the currency finds its base. Factors such as the countries economic status, political status, and global status are taken into account. For example, a Fundamental Analysis investor would not invest in currency from a country that just overthrew its leader and is in political shambles. Although this investment seems logical, it does not take into account one of the fundamental elements of FOREX trading. FOREX currency values are largely determined by the investors. That being said, Fundamental Analysis assumes that other FOREX traders will view a countries situation in the same way and respond accordingly.
Benefits of FOREX
FOREX can be very beneficial to a variety of people. FOREX trading can gain investors a large amount of money either over a long period of time, or in a short period of time. Investors who choose to invest in FOREX are generally well informed about the market and understand the current situations in many countries of the world. Investing in FOREX is simple and highly recommended for anyone who wants to enjoy profits from top-notch investments.
Mary McDowski is very interested in investments and finances. Learn more about FOREX at ( http://www.forexreader.com ).
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