Forex Trading For the New Trader

Forex trading is one of the more profitable opportunities for both professional and new traders. It is easy to see why. Forex trading, especially trading forex online is challenging and exciting but once you learn the basics it gets easier and easier. Then the challenge becomes one of over confidence and not allowing yourself to over trade. There are many appealing aspects in this form of financial trading such as available leverage, high liquidity, 24 hour 5days a week trading accessibility and of course, very low trading costs.

Individual traders are not the only ones interested in forex trading, big business uses forex to hedge currencies and protect their positions in various markets where they are engaged in import/export business. However, in terms of turnover, financial institutions still take the lead. They are the big players, the banks, brokers and the like.

Any investor is able to engage in forex trading, provided, of course that they have the necessary trading funds and reasonable industry knowledge.

Foreign exchange is traded on margin. This means that the trader only needs a relatively small amount to control a much larger position in the forex arena. For instance, if you want to trade a thousand dollars, your required working deposit would be ten dollars. In order to achieve this result, the ten dollars is geared by a factor of one hundred.

One of the interesting things about forex trading is its ability to make you huge profits in a very short time frame. For example, if there was 1% change in the full value of your investment your trade profit could be a 100% gain or maybe a 100% loss. This highlights the potential for huge potential profits and possible financial disaster.

Forex trading is obviously risky but despite this traders are still keen to participate. Part of the reason can be attributed to the very high liquidity in the market together with the convenient 24 hour nature of the worldwide market. This means that you can respond to the market at any time of the day or night and from any corner of the world where there is an internet link.

In the forex market there are no commission charges the brokers earn their money from the spread, normally about 3 pips for the major currency pairs but if you shop around you should be able to easily get a 2 pip spread, at least on the euro/dollar pair.

So for forex traders the market is a kind of nirvana. The market never sleeps and turns over mind boggling sums of money daily. It is highly liquid so that you can always sell. The only real danger is yourself and if you would rather gamble than make considered business decision then watch out! The monster Forex Market will get you!

Michael Jay writes articles on many subjects including Forex trading and mortgage finance.You can visit his Forex Reports blog at http://review-ed.com/Forex-Trading/

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Introducing Options Strategy - Vertical Spread

There are more than 20 options strategies can be applied, but one of my favorite is Vertical Spread. The meaning of vertical spread is that you purchase and sell options of the same type (same stock symbol) with same expiration date but with the different strike price.

In Vertical spread, you can choose to apply bull put spread, bear call spread, bull call spread and bear put spread. Bull put spread or bull call spread can be applied when you think that the stock is bullish, that's what the bull word imply. And if you think the market is bearish, use the otherwise strategies (bear call spread and bear put spread) which have the bear word in it.

When the option sold is more expensive than the options bought, there is a net credit, this strategy call vertical credit spread. Both Bull put spread and Bear call spread are credit spread. Therefore, without fail you have the money in your pocket immediately after the button click on screen.

The benefit of using Vertical Credit Spread is that you can limit your loss due to the spread. Take an example, if your spread difference is $5, your limiting lost will be $500 (every option contract = 100 stock, therefore multiply by 100). The smaller the spread, the better chance to win as you minimize your risk.

My preferred strategy is using 2.5 spread, for example, sell/buy a pair of options strike price of 25 and 22.5, the difference is the spread which is 2.5 in this example.

On the other hand, selling a spread is normally better than buying a spread. Becoming the seller makes you have the advantage of the time value of the options. As you know that when option price is decreasing when close to the expired date, like a water fall pattern, time is on your side.

For an example, if you are selling QQQQ strike price 45 and buying the strike price 43, you have 2 dollar spread. Selling $0.8 option of the strike price 45 and buying at $0.3 option at 43 strike price make you have the credit of $0.5. If QQQQ hovers above 45 until the expiry date, you earn the credit of $50 ($0.5 x 100) by letting both of the options becoming worthless.

Nevertheless, set the stop loss at the level of the sold option minus the credit earn, if you use the above example, the stop loss should be at 44.5. Never allow the stock price drop further than the stop loss target, if it does, buy back the sold leg and let the bought leg run. If you really want to play safe, cut the loss and close the position when the stop loss is triggered.

Doesn't it sounds too simple to be truth? Find out more from Options Trading Academy.

I love options trading and I am here to share my humble experiences so that you can be benefited from it. You can find out more from http://optionstradingacademy.blogspot.com/ Always trade with your passion! Cheers!

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Stock Trading Community - Easy Speculation and Proper Calculation

The business of stock market is very difficult and sometimes it becomes quite complex to understand the move of market. You can not speculate the exact movement and direction of market and that is why people consider risk factor associated with the stock market before investing in it. Nowadays Internet has made it somewhat easy to understand the move of market because it has become the hub of people who are involved in this business. You can find some stock trading community here which can make the business a little bit easy.

In fact a stock trading community can be considered as the most important trading community all over the world. These days major global ventures are controlled by this community and with the advent of Internet, stock trading has become easier. The community has ended the era when a trader had to make multiple calls to get the quote from the brokers. Now a person sitting at his home or office can watch his performance and growth at the stock market. Stock trading community is providing convenience and that is why it is growing massively. All aspects of trading like buying and selling of stocks, products, bonds, mutual funds etc. are performed online .

The contemporary 'Day Trading Stocks and Indices' is the result of stock trading community only. You might know that Day Trading refers to buying and selling of stocks or securities within the same day. Some of the other trades generated by this community are betting trade and forex trade. Brokers are the mediators here who carry out the process of trading between the participating investors and they make the necessary arrangement for buying or selling of commodities. They also provide assistance to traders. And traders use their computers to keep track at the brokers and stock market.

This is how the whole community works together and minimise the risk associated with the stock trading. So, if you are interested in stock market, if you want to invest there and if you want to make the good speculations then take the assistance of stock trading community. It makes the online trading very convenient.

This article written by David Jose is on Stock Trading Community. David Jose has been a avert writer on various online trading communities. His work has been published in several places across the web. At present David Jose is contributing towards making MTP a well known and popular online trading community.

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Scalp Trading

Overview

Scalp trading is one of the most challenging styles of trading to master. It requires unbelievable discipline and focus. Scalp trading has been around for many years, but has lost some of its allure in recent times. Traders are attracted to scalp trading for the following reasons:

• less exposure to risk
• you can place up to a hundred trades or more per day
• ability to fight the greed, since your profit targets are very small
• greater number of trading opportunities

Decimal System

Back in the days when stocks were quoted in fractions, there was a standard spread of 1/16 of a dollar or a "teenie". This spread allowed scalp traders to buy a stock at the bid and immediately sell at the ask. Hence the teenie presented clear entry and exit levels for scalp traders. The scalp trading game took a turn for the worst when the market converted to the decimal system. The decimal system closed the "teenie" often times to within 1 penny for high volume stocks. This overnight shifted the strategy for scalp traders. A scalp trader now had to rely more on their instincts, level II, and time and sales window.

Scalp Strategies

A scalp trader can look to make money in a variety of ways. One method is to have a set profit target amount per trade. This profit target should be relative to the price of the security and can range between .%1 - .25%. Another method is to track stocks breaking out to new intra-day highs or lows and utilizing Level II to capture as much profit as possible. This method requires an enormous amount of concentration and flawless order execution. Lastly, some scalp traders will follow the news, and trade upcoming or current events that can cause increase volatility in a stock.

Winning is Critical

Unlike a number of day trading strategies where you can have a win/loss ration of less than 50% and still make money, scalp traders must have a high win/loss ratio. This is due to the fact that losing and winning trades are generally equal in size. The necessity of being right, is the primary factor scalp trading is such a challenging method of making money in the market.

Al Hill is the co-founder of mysmp.com (My Stock Market Power) which provides free trading articles to investors.

Please visit http://www.mysmp.com/ for more free articles.

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Patience Is Impossible To Master - I Am Going Out And Trade

This article could have been named "Patience, A Trader's Lament" or Patience, The Key To Consistency" or any number of titles but I wanted to get your attention. And now that I have, you are probably saying isn't trading what I am supposed to do? I am a trader! The short answer is no, not necessarily. Some times the best trade is no trade at all. Cash is, after all, a position.

I just got off the phone with a trading friend of mine. We normally go over the previous trading day and let each other critique our perspective trading styles. As a side note, if you don't already have a "trading buddy," I strongly encourage you to find someone that you can bounce ideas off of and go over various strategies with. It is amazing how a different perspective will improve your trading results and give you insight into another way of looking at the market. Do we always agree? Nope, usually we don't. But it is still important to have a second opinion about what you are seeing in the market. Anyway, back to this morning's conversation. I was telling him that I was a little bit frustrated by the fact that I only had one trade yesterday and, even though that trade was a winner, I felt that I had left a lot of points on the table. His answer to me is really what trading is all about.

Did You Adhere To Your Trading Plan?

Did you adhere to your trading plan? That one simple question sums up, in a nutshell, if a trader is profitable or not. I am not talking about being profitable for a day or a week or even a month. I have seen traders go for a long time, "trading in the zone," without having any real set-ups or rules regarding how they took the trades that made them money. Once that lose that "zonal feeling," that lose the ability to make money and are frustrated when that can't figure out how to get back into the trading "grove."

My answer to my friend was that I had followed my trading plan to the letter and that the criteria for taking a trade just didn't set up. I went on to say that even though the strategies did make good money yesterday, today they just didn't work. His reply to me was that one of the reasons that he thought I was consistently profitable was the fact that I followed my trading rules to the letter.

Here Is The Lesson

As a seasoned trader, you have to find a system that you are comfortable with. One that fits your personality and mind set. You have to look at your trading results over time. Don't let one days trading determine if your strategy works or doesn't work. The worst thing for a trader to do it to get bored and feel like the market is working against them. It is at that time that the average trader makes mistakes. It is this mental toughness that will ultimately make you a success or a failure in the business of day trading. Read that sentence through one more time: It is the mental toughness that will ultimately make you a success or a failure in the business of day trading.

Thanks to my many trading friends who keep me level and focused on the keys to making a living in the day trading business. So to sum it up, find a system that fits your trading personality, adhere to your trading rules, find someone that you can bounce ideas off of, and most importantly, become mentally tough when it comes to trading. I hope that this article helps you to "catch a whopper"!

This is not a solicitation to buy or sell.

There is a risk in any investment.

Ron Lewis operates http://www.futuresinvestingmadeeasy.com an educational blog about investing and trading.

For more the free article "HOW TO MAKE $12,000 A MONTH ON A $5,000 ACCOUNT log onto http://www.futuresinvestingmadeeasy.com and request the free gift in the upper right hand corner.

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Beginner Currency Forex Trading Advice

I wanted to share some of my beginner currency forex trading advice. This is a rather large global market with over three trillion dollars a day being moved around. This attracts a lot of people looking to make a quick buck. Even though short term trading can be quite profitable, it isn't something you can just jump into without know the basics of what it takes to be a profitable trader. I've been trading for almost 5 years now and in that time I've learned a lot of little things that I think can really help you out.

The first thing you should understand is the value of the news. Just regular news contains a lot of relevant information that forex traders can use. It doesn't seem relevant since it isn't filtered for us, but anything to do with the economy will affect the currency. The foundation of a currency is held up by the state of the economy, so we can obviously extrapolate the news to the forex market. You should pay particular attention to anything about GDP, unemployment, central bank interest rates, etc. They all have a major effect on the price of currency. If it is good economic news, than it is good for the currency. Bad for the economy, bad for the currency.

It is also important to understand an enemy you'll face while trading. It is the emotions inside of you. These emotions have a way of getting in the mind and clouding your decision making. You stop using logic and reason to make decisions and start using gut feelings to do it. Learn to control your emotions and stick to logic, reason and evidence for your decision making.

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Broker Forex Trading - An Overview

Broker Forex trading is the exchange of foreign currency. With forex trading you are actually exchanging one form of currency for another, this is referred to as buying and selling. There are a number of companies who will buy and sell their products to a foreign market place, they then take the profits they make and convert them into the local currencies. Eighty-five percent of trading is done in the major currencies of the world, currencies such as Australian Dollar, Japanese Yen, US Dollar, British Pound and Euro to list only a few.

Many people find forex trading to be a bit confusing especially now with the constant fluctuations of the world currencies. It is a fairly easy concept. However having a broker to help you in currency trading will assure you better trades and you don't have to spend a lot of time doing research in the market.

Broker forex trading is much easier than doing it on your own. Although it is true that anyone can profit from forex trading, no matter if they have experience or not it is also true that more than half of the people that get into forex trading will lose money over time, as trading can be risky when you are not familiar with the product. When you use a broker some of the risk is removed because a broker has some familiarity with the market trends.

When trading currency it can be difficult and a constant profit for most is hard to achieve. A method that is more proven to help you make a profit is broker forex trading. The evidence can be found by the number of people that have realized a profit and have made small fortunes with the assistance of a broker. A broker can help you no matter what the currency and financial market you are interested in trading in and they can help you to understand how to read the market trends and make recommendations.

When dealing in forex, it is crucial to know how it works and you should also be aware of the pros and cons of trading currency. Forex trading has become a very popular choice for many investors who are looking to make money. With the Forex market and investments made in it, there are benefits as well as risks. Some of these are profitable and others are not.

Brokers that work in the forex market on a daily basis spend time learning and analyzing what changes are taking place in the market. They know when to place a bid and when not to. This is just another of the numerous reason that broker forex trading is important. Brokers know the pros and cons of the currency market and this is useful, as they will help to place you on a path that will eventually become profitable for you. By knowing both sides of the market, the negative and the positive you have a better chance of being in a position that is profitable as well as safe.

Now that you have found out what you you should be doing, go to Forex Killer to discover why it's so easy to create 10's of thousands of dollars by trading forex with the very best cutting edge information available!

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