Forex Trading continued
– Page 2
The forex markets
are open 24 hours a day and close
only between Friday and Sunday afternoons EST (New
York) time. Most trading activity, however, is when two or more major
exchanges – New York, London, Zurich, Hong Kong, Tokyo or Sydney, are open. To see
how these opening times overlap in relation to
your own time zone, you can download
here. There is a lot of other useful
information on other topics of interest too for
An example of a forex 'trade'
– in layman's terms
Let’s say the current
price is 1.2620 (1 EUR = 1.2620 USD). You buy 1
lot of EUR because your analysis reveals that the rate will rise (meaning the
value of the
euro will go
in relation to the dollar). After 15 minutes the sell price
has risen to 1.2640.
You can stay in the trade for as long as you like, but if you
'close your position' (selling euros and buying back dollars), then your 20
pip gain equates to a
profit of around $200 and this would be paid back into your trading account,
together with the 1% margin (guarantee) required for the trade. On a
standard account this is $1000 per 100,000 unit lot. With a 'mini' account
divided by 10, so 20 pips would be $20 and the guarantee required $100.
Why might forex trading be of interest to you?
If you are currently resident, planning on retiring in, or making your
base in a foreign country, you should be able to use the internet
(even via your mobile phone) without being affected by regulations and controls on foreign workers. In the case
of forex (currency trading), transactions are made overseas, but deposits and
funding can be made using your 'home' or offshore bank account.
An ATM card makes it easy to withdraw cash anywhere. Trading forex in Asia is
quite feasible and could be tax-free too.
Forex trading advantages and benefits
Easy to learn to start
stimulating, even exciting;
Can be done anywhere
there is an internet connection – even using internet shops, or
'wireless' on the beach! Many brokers have web-based trading interfaces
which means they work through a browser like Internet Explorer or
Firefox. Others require a one-time download to a PC first;
Markets open 24
hours from Sunday through Friday afternoon (EST);
Completely under your own control as
to what, how and when you trade;
No joining fees or set-up costs
required to become a forex trader;
Free sources of information, free
software, free training, free practice accounts from banks brokers and
dealers; no commission on trades;
Learn and practice
with a demo account for as long as you
like without making or losing real money, but your results are not really
true to life.
With knowledge and experience, there is the
potential of earning tax-free extra income from forex trading.
And on the "other
side of the coin"...
of course the risk of loss
as well as
chance of gain with live trading;
As with most things in life, there are
winners and losers, so you should not invest funds you cannot afford to lose. Often loss will come before gain, as
experience, knowledge and forex trading strategies are learned;
Despite the promises of
'experts' who sometimes charge
large amounts of money for information or products that they claim will make you a
winner all the time with their secret or special systems, there is no
‘Holy Grail’ – no foolproof system that will guarantee consistent
success with forex. The constant movement of prices in both directions
Practicing with a demonstration
account is educational and mentally stimulating, even fun, but successful
trades require self-discipline and good strategy. This comes only with
experience through study and practice.
So how and where
start to learn to trade for profit?
If you're serious about becoming a successful foreign
currency trader, then take a professional forex course. The money invested will be
recouped rather than lost in addition to unnecessary trading losses that
will inevitably occur if you start trading without the correct knowledge and techniques,
including understanding risk management and the psychology of trading.
Learn how to trade forex on 'automatic pilot'
Trading using forex
robots or expert advisers (EAs) is something you can consider once you
understand the basics of 'manual' forex trading.
more on Page Three...
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