Mastering Forex Trading

It seems that USD based currency pairs have the lowest spread. However, I am living on the other half of the earth (12 hours ahead/behind New York), and I am new to such forex trading

It’s not entirely about location, since most financial markets are already integrated across the globe. USD based currency pairs have the lowest spread because the USD dollar remains the primary currency of trade across the planet/ among countries. The US remains the dominant economy in the world and so most other currencies are pegged to the USD, although the Euro and Japanese Yen also stand as major currencies. With that being said, volatility/spreads are lower/tighter because of the liquidity and activity of currency traders.

Let’s shift our attention to a common household item like soap (as if it were the USD). If there are a lot of buyers and sellers of this item, then the price and quantity movements would be shifting all the time at minuscule fluctuations. No one trader (buyer/seller) can effectively influence the price level of the soap because if he sold too high, another trader will simply come in and sell it a lower price (albeit at a fractional discount). This also applies to a buyer, if he quotes a price for a soap another guy may step in and offer to buy that soap at a higher price (albeit only at a fractional premium). Since everyone uses (demand) and sells (supply) soap, you can be sure someone will always be there to handle the soap, therefore higher liquidity, lower volatility, smaller spreads.

Rarely traded currency pairs are usually volatile and have bigger spreads simply because their liquidity is low. Let us again use a substitute item, bird cage. Although soaps are frequently seen in most if not all households, a bird cage is not. This means that not everyone is interested in buying or selling a bird cage. The very fact that a currency is infrequently used in market trade, also means that there is no point in handling too much of it. Sellers of a currency can try to offset the risk of not being able to sell it as easily as more popular currencies by demanding wider spreads. They can’t be sure that they will be making a sale in the next minute or so, but they know that in the next hour, the wait will be worth it (kind of like selling furniture).

Just keep demand and supply in mind. I hope this simplifies the concept!

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It seems that USD based currency pairs have the lowest spread. However, I am living on the other half of the earth (12 hours ahead/behind New York), and I am new to such forex trading

It’s not entirely about location, since most financial markets are already integrated across the globe. USD based currency pairs have the lowest spread because the USD dollar remains the primary currency of trade across the planet/ among countries. The US remains the dominant economy in the world and so most other currencies are pegged to the USD, although the Euro and Japanese Yen also stand as major currencies. With that being said, volatility/spreads are lower/tighter because of the liquidity and activity of currency traders.

Let’s shift our attention to a common household item like soap (as if it were the USD). If there are a lot of buyers and sellers of this item, then the price and quantity movements would be shifting all the time at minuscule fluctuations. No one trader (buyer/seller) can effectively influence the price level of the soap because if he sold too high, another trader will simply come in and sell it a lower price (albeit at a fractional discount). This also applies to a buyer, if he quotes a price for a soap another guy may step in and offer to buy that soap at a higher price (albeit only at a fractional premium). Since everyone uses (demand) and sells (supply) soap, you can be sure someone will always be there to handle the soap, therefore higher liquidity, lower volatility, smaller spreads.

Rarely traded currency pairs are usually volatile and have bigger spreads simply because their liquidity is low. Let us again use a substitute item, bird cage. Although soaps are frequently seen in most if not all households, a bird cage is not. This means that not everyone is interested in buying or selling a bird cage. The very fact that a currency is infrequently used in market trade, also means that there is no point in handling too much of it. Sellers of a currency can try to offset the risk of not being able to sell it as easily as more popular currencies by demanding wider spreads. They can’t be sure that they will be making a sale in the next minute or so, but they know that in the next hour, the wait will be worth it (kind of like selling furniture).

Just keep demand and supply in mind. I hope this simplifies the concept!

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In USD terms, daily trades top $1.3-3 trillion worldwide. It’s an open market system that works 24 hrs a day, 5 days a week to generate profits for both big banks and retail investors.

In terms of pure volume, currency trading (also called forex trading) is the biggest market in the world.

http://forex.ellsed.com

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In USD terms, daily trades top $1.3-3 trillion worldwide. It’s an open market system that works 24 hrs a day, 5 days a week to generate profits for both big banks and retail investors.

In terms of pure volume, currency trading (also called forex trading) is the biggest market in the world.

http://forex.ellsed.com

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is it safe n real,
n can we expect sm gud returns with dat,
n if yes, den wat r the Applications n sites or softwares,
we can use to handle dat or which can teach us bit abt dat,

pls guide us correct way,

Thanx

hiee
monica
Angel is having a nice stuff for people,
who r luking for sm forex info ,
and abt forex trading softwares n robots,
its nice
hav a luk here;
http://www.fapturbo.com/?hop=gane125

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is it safe n real,
n can we expect sm gud returns with dat,
n if yes, den wat r the Applications n sites or softwares,
we can use to handle dat or which can teach us bit abt dat,

pls guide us correct way,

Thanx

hiee
monica
Angel is having a nice stuff for people,
who r luking for sm forex info ,
and abt forex trading softwares n robots,
its nice
hav a luk here;
http://www.fapturbo.com/?hop=gane125

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Anyone has done this type of trading with the said broker..what is your experience..please share with us.

Hi iam_pall,

GFC Markets is owned and operated by SafeCap Invesments (http://safecapltd.com), which is a firm registered in Cyprus. SafeCap is regulated by the Cypriot body CySec (http://www.cysec.gov.cy) and FSA of UK (http://www.fsa.gov.uk).

SafeCap Investments was founded in 2006 under the name of Arbat Capital Limited, and changed its title in 2009. Its regulatory approval for forex operations was just granted in 2008.

1. Please also be informed that SafeCap also operates other online trading websites: finexo, btrader, forexwebtrader, goforex and gdbrokers.

2. Account Types:
a. Trading account types offered are standard just like any other brokers.
b. Their mini account has a welcome bonus of up to $250 which is generous. There was no such offer when I started out.
c. Their standard account gives a welcome bonus of up to $2,000. Need I say more?

3. They offers leverage level up to 200:1. But I do not encourage you to take up this offer as it increases the risk.

4. Trading platforms:
a. From browsers like Internet Explorer, FireFox and Safari. Good if you use Macbook or Macbook Pro.
b. On Windows, you can trade using a client software that offers more trading flexibility that option (a) above.
c. Trade from your smartphone. I have never been keen on this option as the screen is too small. But at least you have an option to enter, modify and exit your preplanned trade when you are away from your computer.

5. Deposit And Withdrawal:
It is standard just like any other brokers.

6. Customer Support is 24 hours a day which is very important. Please check that they speak your language.

7. How Safe Is It?
a. They have a market capitalization of over 170,000,000 USD, so they are one of the leading brokers around.
b. And all funds under 20,000 EUR are insured. So you can sleep at ease.
c. The broker regulated by two separate and credible EU authorities.

Whichever broker you choose, none of them are perfect. Some traders always hop from one broker to another believing that they can get a higher chance of success. It is however more important to choose one that you are comfortable with.

My parting words are always learn, practice and discipline.
a. Always be keen and humble to learn. There is no end to learning.
b. Always practice whatever new things you learned in demo account. If you cannot survive and prosper in your demo account, you time of trading live has not come yet.
c. Always maintain trading discipline. This can only be cultivated in diligently practicing in your demo account. I had never appreciated this aspect until I kept busting many demo accounts.

I hope this helps and good luck!

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I understand that you buy currency in "lots" and depending if they go up or down in value you make in profit or loss.

I just don’t understand why the currencies are paired like "EUR/GBP".

Can someone help me understand the actual process taking place when people trade currency?

In simple word:

EURGBP = you have / use EUR to buy GBP, the exchange rates is 1 EUR = xxx GBP

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I’ve been thinking about opening a small $1,000 account. Any advice from professionals would be appreciated.

You can make ALOT of money trading forex, but you have to be realistic about it. You’re not going to deposit $1000 into an account and make $1000000 overnight. And even if it’s possible, your emotions would pretty much keep you from earning anything until you learn to control them and trade systematically.

I will try to put it into perspective for you. Once you know what you’re doing in forex, you can easily average 5% profits weekly without spending too much time staring at charts. No problem. Just learn how to trade well enough to earn 5% weekly. But do it like this…

1. Open a demo account at one of the brokers. Make sure the account only has $1000 in it.

2. Place trades of 0.1 standard lots. NEVER place trades bigger than that.

3. Try to capture (or lose) only about 20 pips per trade. Use a well defined trading system and stick to it.

4. Keep trading like this until you have doubled your account. Don’t give up even if it takes a long time.

5. Open a $1000 live account with real money and repeat the process. Pay special attention to your emotions as you win and lose YOUR money and be aware of how different it feels from a demo account. Don’t let your emotions control your actions. Stick to the system.

Now here’s the thing. Each time your account grows by $1000, you can increase your trade size by 0.1. As your experience increases so will your money. Before too long it will feel like you’ve been doing it forever and you can be easily living entirely off the profits from trading.

NOTE: If you don’t know what some of the terms above mean, that’s no problem. Check out the BabyPips School and you can learn all of the terminology. Also, I highly recommend using a mentor to help get you up to speed and learning some proven strategies.

Once you become confident in your trading, you might consider reading my book on trading, or even using a trading robot to free up your time. I have one of those too. Check it out.

Anyway, I hope this answers your question. I know it’s kind of long but believe me, forex is worth the effort.

BabyPips School
–> http://www.babypips.com/school/

Forex Signal Mentor
–> http://www.ameLabs.com/recommends/fsm.php

The Forex Millionaire Maker (my book)
–> http://www.Millionaire-Maker.org/

Forex Set and Forget Automated Trading Robot (mine also)
–> http://www.Forex-Set-and-Forget.com/

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I would like to know how to make money with Forex or currency trading. Does anybody have experience and willing to share a couple of tips ?

If you are new to this market, the best thing I suggest is that you use automated software to trade for you while you are learning. This way the trades are placed for you automatically. Learning to trade Forex manually is very difficult, emotions get involved which makes it very easy to lose all your money.

For a successful system you need:

1) Good money management and stoploss’s to protect your capital.
2) Proper risk/reward ratio.
3) A way for it to adjust dynamically to the changing market conditions.

Here is a site that reviews these types of systems:
http://www.Expert-Advisors.com

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