Forex Trading is mainly about trading in currencies. It is buying one currency at a lower exchange rate and sell it away at a higher exchange rate. In some cases, you can also trade with the higher currency to earn the difference. In this article you will learn Forex Trading as an introduction.

Forex trading, also known as FX, is considered the largest and perhaps the most liquid financial market in the world. There are many small-time investors and even big institutions are involved in FX. One report says that at least USD$4 trillion worth were traded in 2007 alone.

If you are wondering how it works, it’s very simple. It’s just like how we go to money changers to exchange different currencies. If there is one money changer that offers good rates, I can exchange for foreign dollars are lower cost. Then, I can go to another money changer that gives bad rates to local dollars. That’s where I exchange the foreign dollars to local dollars. The above scenario is very simplified, layman’s method of making money.

There are many reasons why Forex Trading is so popular among smaller investors. The following are some of the reasons.

- It has high leverage.
Forex has high leverage which allows an investor to maximize their returns.

- It has very limited liability.
If the margin requirements are dropping the open positions will be closed.

- Money invested in FX is extremely liquid.
You can enter, exit or withdraw profits at any time!

- Forex Trading is a trading that is 24 hours
Forex trades 24 hours a day so you can buy and sell anytime.

Before entering the market, many investors would want to find out more about FX by reading up some books. This is advisable so that you are more knowledgable and will also be able to react properly when there are fluctuations in the currencies.

There are investors who would hire a Forex Trading Coach to maximize their earnings in a short time, avoiding all the pitfalls plus minimizing trial & errors. This is also a good route to take up as investors are guided properly. Of course, there is an amount to pay for having a Forex Trading Coach. It is advisable to look for a qualified coach, or, attend their free seminars. If you are comfortable with the presentation, join the coaching program.

In conclusion, Forex Trading is a very good form of investment for small investors. There are reports of people who make $1000+ in just one week. This is not a pipe dream but achievable. All you need are proper guidance.

There is an old saying that a picture paints a thousand words.

My turn on this phrase is that a good video is often better than a book!!

Hopefully you are probably aware that it’s been scientifically proven in various prestigious studies (which I won’t go into detail here..) that a visual presentation can often be up to 3 times more effective than the written version.

And video is a very powerful presentation method, especially for forex trading…

But what about the myraid of forex trading videos out there - to be honest most are junk. So I’ve spent some time checking over a few of them so as to keep you informed with good content and not waste your valuable time!

Anyway, what I thought I would do was to direct you to a really good video that I’ve sourced for you…

This is an introduction to a charting style known as Candlestick, actually it’s more properly known as the Japanese Candelstick style.

I’ve always liked this chart type it because it’s so informative of the way the market has behaved and I’ve found that it is an incredibly good indicator of major turning points.

If you’re reading this post tell me what you think- leave a comment…

Here’s to your profitable success ……

Some facts on Fibonnacci Ratios that you need to be aware of in order to trade profitably.

Why? Simply because these numbers or rather the relationship between these numbers and their ratios often indicate important points in analysing charts for profit.

In fact I would say that there isn’t a trader out there that hasn’t heard or used them and more importantly many of the ‘auto-trading’ platforms use them exclusively as signals.

So what is a Fibonacci ratio?

These ratios appear in nature and in the financial markets they often indicate levels at which strong resistance and support will be found. They are easily seen in nature seashell spirals and flower petals, in art, geometry, architecture and even in music.

The ratios are made up from a sequence of numbers as follows: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, etc. Each term in this sequence is simply the sum of the two preceding terms and sequence continues infinitely.

One of the major characteristics of this sequence is that each number is approximately 1.618 times greater than the preceding number.

This common relationship between every number in the series is the foundation of the common ratios used in retracement studies.

The key Fibonacci ratios are 23.6%, 38.2%, 50%, 61.8% and 100%. Fibonacci retracement is created by taking two extreme points which is usually a major peak and trough on a chart and dividing the vertical distance by the key Fibonacci ratios listed above.

How are these numbers related and how are the ratios calculated?

The 23.6% ratio is found by dividing one number in the series by the number which is three places to the right. For example: 13/55 = 0.2364.

The 38.2% ratio is found by dividing one number in the series by the number that is found two places to the right. For example: 13/34 = 0.3824.

The key Fibonacci ratio of 61.8% - also referred to as “the golden ratio” or “the golden mean” - is found by dividing one number in the series by the number that follows it. For example: 13/21 = 0.6190.

We don’t know why these ratios seem to play an important role in the stock market, just as they do in nature, and can be used to determine critical points that cause an asset’s price to reverse. The direction of the prior trend is likely to continue once the price of the asset has retraced to one of the ratios listed above.

How are Fibonacci Ratios of any use?

Because the markets tend to reverse right at levels that coincide with the Fibonacci ratios.

For example, if the GBP/USD rallies 100 pips and then corrects, it will often correct 61.8%. Right at, or close to the 61.8% retracement the pair is likely to reverse and start advancing again.

Of course it is not always this simple. Fibonacci support and resistance levels can and do fail. But the fact is that it does happen and is often called a trader’s “edge.”

A trader has an edge when he knows the probabilities of a particular action are greater than normal and Fibonacci ratios help provide this edge!

Foreign exchange trading (also called Forex trading, for short) is a very popular means by which people can trade on currency pairs. Different than stock trading, foreign exchange trading deals with currency pairs; you place trades based upon the assumption that one currency in your pair is going to do better than the other currency in your pair.

The foreign exchange market is the largest in the world and operates 24 hours a day, six days a week. Because it operates globally, you can place trades that literally anytime of the day or night, whenever you choose. The Internet has made Forex trading a very popular and sometimes lucrative pastime for many people. And in fact, some people have even made it their full-time occupations.

If you want to be successful in foreign exchange trading, you have to do a number of things to get started. First of all, you have to learn the Forex market, inside and out. How do you do this? The best way may be to simply get hands-on practice. In fact, this can be free to do so. Simply research a number of Forex brokers and choose the best one for you. The Forex broker you choose likely has something called “demo trading.” Demo trades are trades that beginning Forex traders can use to practice Forex trading before they risk their own money.

As you participate in demo trades, you’ll also need to be learning other ins and outs of the market. Among the skills you have to learn will be technical and fundamental analysis. Technical analysis is the means by which you analyze and then predict how a particular currency is going to do based upon past behavior. For example, if a particular currency has been doing well and has been for some time, it’s likely that it’s going to continue to do so for at least the short-term. You’ll need to keep abreast of any changes and be able to make snap decisions based upon those changes in the event you should have to get out of that particular trade.

Fundamental analysis predicts how well a particular currency is going to do based upon its country’s social, economic and political stability. Again, as examples, if a country is very stable in these three areas, and its currency is likely also going to be strong. If the country, on the other hand is very unstable in any of these three areas, its currency is not going to be as stable or as strong. Therefore, strong currencies are likely to have strong countries, in essence.

Now, with foreign exchange trading, there is a lot of data to keep track of, and you have new data coming in all the time. There is Forex software available that can help you keep track of your data and be able to analyze it “in a glance” once you know what you’re doing, even as it changes rapidly. There are programs available both through Forex brokers (sometimes for free to their clients) and there are also independent programs you can buy. Read reviews and choose carefully if you do decide to use a software program. Nonetheless, be aware that you will still need to know how to read and analyze the data independently in order to use the foreign exchange software. You should not rely exclusively on the software to tell you what trades should be made.

Your best advice however is to use Forex trading software that is NOT provided by the Forex broker. Why? Because just about everyone who uses that broker will be using the same software, and therefore likely to be making the same trade decisions, which will dilute your profits. You are much further ahead to use a very capable Forex software package that will likely not make the same trading recommendations as the software from your broker, which can then maximize your trade profits.

Foreign exchange trading gives you the means to make some pretty decent money once you know what you’re doing, and in fact, some people make very good livings just by engaging in Forex trading and nothing else. That said, you’re going to have the psychological and technical skills to be successful. Don’t engage in real money trades until you know what you’re doing. And never risk money you can’t afford to lose; even successful Forex traders lose money sometimes, and you will, too. With that said, though, foreign exchange trading can be a very lucrative pastime or even full-time profession, if you find it exciting and challenging.

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For more insights and additional information about Foreign Exchange Trading as well as reading review of three of the most popular and successful Forex trading software programs, please visit our web site at http://www.forexcurrencysystems.com

Hi Guys

A Brief Introduction.

The primary reason for setting up the blog is to help individuals to be successful in trading currencies - that is making consistent profits!

First Things First!

You may already have asked the question - Why should you listen to me? What have I got that sets me apart from the vast majority of traders out there?

Well, the answer is simple. EXPERIENCE!

A Brief Biography is in order!

After University, where I gained a first degree in Business I worked for the merchant banking arm of one of the big 3 Australian Banks. I spent two years trading spots, forwards and crosses on an interbank basis.

I then spent the next six years working for one of the premier British merchant banks working my way up from junior dealer to assistant treasurer. My main speciality was trading crosses and managed positions (Investment currency positions).

After returning to the U.K. I spent 7 years working in corporate finance consulting and continued trading on personal account, mainly gold futures, CFDs and margin trading currencies.

So basically I have both “interbank” and “private account” trading experience. I have been successfully trading for 15 years.

So now you know a bit about me, let me provide you with the first nuggett of information which you may or not have been aware of but makes a crucial difference in the first step to making money.

Interbank trading is NOT the same as private account trading!!

The main reason: KNOWLEDGE!

This knowledge comes in two forms, Market Intelligence and Experience!

Interbank traders see moves “before” they happen. They see the back of large corporate buy/sell orders before John Doe does. They have better market intelligence than private account traders.

Secondly, they have access to information from other traders and can gain experience that helps make the right risk/trading decisions in an instant - their profit - your loss! (Never forget it’s a Zero sum game!)

So, what you must do is recognise that you have some “weaknesses” to initially overcome. These are knowledge about how to best exploit your position in the market i.e. recognising that your market intelligence is more limited and secondly you have to be smarter with the knowledge you will gain and use it!

Keep tuned for my next article which will cover essential terms that you must know and the “types” of trading available to you.