Singapore Net JobsPrimary Introduction To Foreign exchange Trading

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Electronic Currency Trading: How It Works

Electronic currency trading is simply a way of dealing in currency exchange online. You may have seen it described as foreign exchange, forex or fx trading. It is something that appeals to many people who are looking for a way to make money on the internet using their home computer.

Forex is a little like stock trading, although the market itself is very different. You have the same aim of buying something hoping the price will rise. But with forex you are always dealing with money so you can also make money from a falling price, by exchanging out of the falling currency into a steady or rising currency.

Imagine for example that you are trading on the currency pair EUR/USD. This is a common combination for beginners. The US dollar and euro are most traded currencies and there is a lot of information available to help you, so it is a good choice to start.

With this pair you can choose to either buy or sell euros. If you place a buy order, this is called ‘going long’. You would do this if you think the euro will strengthen or rise in value (or the dollar will fall).

If you place a sell order, that is ‘going short’. You would do this if you think the dollar will strengthen (or the euro will weaken).

Your aim is to make a profit by closing the trade when the price goes the way that you anticipated. Closing the trade would involve selling euros if you had gone long, or buying them if you had gone short.

Of course, there is a risk. The price could go the wrong way, and you could make a loss. So it is important to have good information and a profitable trading system.

You do not need a lot of money to get started with electronic currency trading. Many brokers will let you begin with a couple hundred dollars, although it is better if that is not all the money that you have in the world!

Forex trading involves margins. This means that you can place orders for a lot more money than you actually have. You do this through a broker who will guarantee the balance of the order. They know you will be closing the trade at some time and if one currency is falling, another is rising. Currency values are relative, so it is not possible for all currencies to crash in the way that all stocks can crash.

Currencies can be very volatile but you can use stop losses to ensure that you do not lose more than you are willing to risk. Some brokers operate limited risk accounts where they will automatically close your trade if you lose the balance of your account. This means you do not have the dreaded margin calls which can be so disastrous for stock traders.

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Tuesday, June 9th, 2009 fx trading software, Introduction No Comments

A Quick And Easy Foreign Exchange Tutorial

Your first foreign exchange tutorial will cover the basics of what you need to do to get started with forex trading. The aim, of course, is to have you making money by predicting the rise and fall of one currency against another and opening and closing your trades at the right moment.

It takes time to learn to be a successful forex trader but you can cut corners if you have a good introductory program that covers everything you need to know. This includes:

- understanding the principles of currency trading including managing your account, trading margins, and allowing for the cost of the spread

- technical analysis: discovering how to recognize trends in the markets, the different types of charts and how to interpret them so that you can profit from market movements

- fundamental analysis: understanding what to do in the face of major national or international economic events that are likely to impact on currency values.

- finding out how to minimize your risk and protect your trades with stops

- developing the power to apply your system without allowing losses or emotions such as fear to throw you off balance and affect your chances of earning long term profits

A good place to pick up hints and tips can be a forex trading online forum. There are many of these on the internet and members will comment about all kinds of issues relating to the market and their own trading. This can be a great place to go if you have questions.

However, forums have some drawbacks. One is that the advice you get may be very contradictory. There is more than one way to trade forex profitably and it can be confusing to be receiving advice from several different people, each with their own approach. It is usually better to stick to your own system.

The other problem with taking advice on forums is that you do not usually know anything about the people who are posting. Somebody could sound very knowledgeable and then it turns out they have only ever used a demo account and never made a real trade in their lives. Some people spend more time hanging out in forums than trading. Just because somebody is very active in a forum does not mean he or she is an expert.

So do not rely on forums, free guides or untested theories for your trading system. When you are starting out in forex trading you need a solid grounding in the basics and a system that is easy to follow and actually works. As with most things in life you usually have to pay for the best. So look for a foreign exchange tutorial that is part of a profitable forex system.

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Tuesday, May 26th, 2009 Introduction No Comments