What is Forex and How to make money with Forex 5
Forex strategies - is it possible to make a lot of money with forex?
This is one of the last few forex articles here on Ideas on How to Become Rich about forex - one of the last few articles associated all things associated with forex and how to make money trading currencies. I must say here that all the other forex articles were researched and developed as this is an ideas on making money blog, and I am definitely not an expert in forex and not an expert in foreign currencies. I am rather good at investment and making money on the stock exchange for penny stocks and for standard blue chips, but that is about the extent of my knowledge and all other information here on my make money site here is to share ideas on how people can make money and the various approaches taken to various markets. My background is in Economics (Honours) and investment is my major theme here on this site. I am writing this honest preface to my article because today I am going to talk about what I have gleaned from my research on forex - and today's topic here is forex strategies. There are no guarantees in any article in the world and no guarantees for anything in this world that will tell you that you can definitely make money, but here are some key forex strategies that you may wish to consider:
1. Learn fundamental analysis and technical analysis cold, and either:
- choose either one of them and stick with it for your forex strategy and investment paradigm, or
- combined both approaches, which makes more sense; meaning that for a forex strategy you will research both on the general macroeconomy and market perspectives of fundamentals, as well as the technical, day to day movements of the price.
2. For technical analysis, and indeed forex in particular, you will need some kind of knowledge of mathematics and some tracking software for the latest information. There are two key ideas here:
a) you will need to know some mathematics, and in particular, Fibonacci numbers and the Fibonacci method for forex because apparently there is some major link between making money and your knowledge of this key information
b) for technical analysis and for forex you will need a constant stream of real, life data for currencies and this is not easily available unless you have the right connections, the right software and the right websites.
Therefore, the forex strategies here are: immediately find some contacts who have live and good experiences in forex strategies and forex trading, then get some software, preferably free, but if that is not possible, then get some that require some money and some sort of fees, and then start building up a whole list of websites that you need. Some websites might be educational, like Ideas on How to Become Rich, and some others might be educational and more advanced, and yet others might be data mining and currency news sites, and even others may be links to governments and to brokerages worldwide.
3. Perhaps for the most important of forex strategies is to get a winning approach for forex - for instance, be international, where you trade every currency that is major and that can make you money, regardless of whether or not you believe in the currency or the country, for that matter; choose not to be a speculator but a real investor, but then again, that is only my opinion, and of course your forex strategies can revolve around day trading and being totally technical analysis and data based rather than long term or anything like that. The key is that you make your own winning approach to forex strategy.
For example, you can have some successful trading strategies involving only simple moving averages, where you use an algorithm. The key is still to make sure that your upside is more likely than your downside. You can also use support and resistance levels, and that might be a good strategy to use, successful and simple and algorithm based, or commonsense based, if you like.
4. Research and continue to upgrade, both in terms of education and in terms of information regarding forex and forex news. At any early stage, this site proves invaluable and educational, but as time goes on, you move on and go to other more important educational sites and also to try your hands at some simulations and also some real money. Forex is reputedly good for making money, if you know how, so do try your very best and all the best for making money!
Hope you make lots of money with forex strategies and forex, good luck and all the best in your money making ventures!
What is Forex and How to make money with Forex 5
What is Forex and How to make money with Forex 4
What is Forex and How to make money with Forex 4
Forex fundamental analysis and forex technical analysis
In my earlier posts here on Ideas on How to Become Rich, I covered fundamental analysis and technical analysis. It is interesting and important to note that fundamental analysis and technical analysis are important to forex trading and making money using currency exchange as well. What is fundamental analysis and technical analysis in the context of forex?
Fundamental analysis in the context of forex means that someone looks at the macroeconomy of a country and the target currency; looks at the political situation of the country; national unemployment; tax policies and all the stuff like that in order to find out and measure the effects that these events and policies and situations will have upon currency values. In other words, the forex trader who uses fundamental analysis is using the same concepts and ideas to make money as the investor who invests in the stock market from the investment paradigm of fundamental analysis as well. The fundamentals of a company will affect the stock price ultimately; the fundamentals of a country will affect the currency values, ultimately, and that is what the forex trader is looking and watching out for in order to make money. At the same time, it is important to note that a currency does not just reflect the fundamentals, and there is an important role played by perceptions, ideas, rumours and anticipations and expectations of market participants.
Many other forex traders use technical analysis instead, which looks at values and movements of the currencies, and ignores the fundamentals of the country's economics and indicators that fundamental analysts take so seriously. The investor assumes that the movement of the currencies considers most of the factors inside it; movements of prices have causes and effects; history repeats itself. The main thing is that the technical analyst makes no forecasts way in advance but looks at the trends and prices, just like a technical analyst for stocks does his business, in order to make money.
Perhaps a cross comparison might help budding forex traders or forex beginners seeking to improve their knowledge, so do visit
technical analysis on Ideas on How to Become Rich
and
fundamental analysis on Ideas on How to Become Rich
to build up your investment and technical knowledge. More to come here in future posts on forex and how to make money with forex! Stay tuned here.
What is Forex and How to make money with Forex 3
Why utilise the forex market to make money? Why should I choose forex trading over other investments?
In this series I am talking about forex. I will now give reasons for picking forex trading over other investments or financial instruments.
The forex market is basically the market where currency is traded, and it is the largest financial market in the world. Until the 1990s only major players and big institutions could play this game, but now with the rise of the Internet even the small guy next door can play this game. Information, knowledge, an internet connection, and voila, one can join in the forex market and do currency trading.
Some of the popular, major currencies being traded worldwide:
USD
United States
Dollar
Buck
EUR
Euro members
Euro
Fiber
JPY
Japan
Yen
Yen
GBP
Great Britain
Pound
Cable
CHF
Switzerland
Franc
Swissy
CAD
Canada
Dollar
Loonie
AUD
Australia
Dollar
Aussie
There are many benefits to trading foreign currencies in the forex market. These are the major and most important reasons:
There are no commissions, no middlemen, no fixed lot size when trading, low transaction costs, a 24 hour market, no one can corner the market, leverage, high liquidity, free demo trading accounts, and even better mini and micro trading options are available.
There are no commissions: Brokers are compensated by the bid-ask spread, and so there are no commissions.
There are no middlemen: Spot currency trading eliminates the need for middlemen, and so you can trade directly on the market for a particular currency pair.
No fixed lot size: You can determine your own lot size instead of having a predetermined lot size.
Transaction costs are lower: The transaction costs are lower than most other investments.
24/7 forex market: The forex market never sleeps, unlike your local stock exchange.
No one can corner the forex market: The forex market is huge and hence no one can ever corner it and control it for extended periods of time, even countries and their central banks cannot corner it.
Liquidity in forex is high: You will also never be stuck in a trade because liquidity is very high.
You can have free demo trading accounts: In addition, you can train and practise your skills in forex before you go on to do a real life transaction and real life forex moves.
Minis and micros? Also, if you don’t have much money, you can do the mini and micro trading accounts, which allow people who have little money to start out in forex markets doing currency trading.
You will need some basic capital (your money) and a high speed Internet connection if you wish to get started in forex trading. Good luck and all the best! More to come on this site about forex, forex markets, forex strategies and tips and much more on becoming rich and making money.
What is Forex and How to make money with Forex 2
What is Forex and How to make money with Forex 2
In Ideas on How to Become Rich, we have now explored a new fields, called foreign exchange, and we will be looking into forex for ideas on how to make money and become rich.
Forex is basically the trading of currencies, and the trick is to make use of the discrepancies in currency values and prices in order to make money. Conceptually, that's easy enough for using forex to become rich, but there are of course many complicated technical details.
This section may get a little boring because it does not dive into forex right away but deals with terms and words associated with forex. All research is mine and I utilised the following resources on forex because I knew little about forex before researching into it on a major scale. Education is key to understanding forex as it is indeed a viable way to make money and might be the key to your financial success. The best educational resources for forex, and for beginners to forex, are:
articles on ezinearticles.com , of which one of the contributors to other financial and investment articles apart from forex, is myself (yours truly) and http://www.babypips.com/school/the_skinny_on_forex.html for complete beginners.
I do the research and the writing and the synthesis to save you time and effort, and then you can access the information and resources to make money and ideas all here on my website. My advice for beginners to forex is that the ezinearticles are only worth reading once you have learnt and mastered the basics, because most of them are actually advertisements for online programmes and other types of software that help you make money doing forex. That is to say: know what forex is first, learn all you can about forex, and learn strategies and moves for success in forex, and then currency trading will be a money spinner and money earner for you. Then read ezinearticles.
Definitions and terms associated with forex
long = buy
short = sell
These two key terms are the basics of forex that you definitely need to know.
the bid = the price at which you will sell
the ask = the price at which you will buy
the spread = the difference between the big and the ask
rollover = this depends and varies from firm to firm, but the main thing is: there is a rollover interest rate that a trader either pays or earns
demo trading = doing trading using a fake account that simulates a real account for forex
pip = the most common increment of currencies, the last decimal place of a quotation - don't worry, all forex brokers will do this calculation for you, and besides my brother doesn't know what a pip is either!
lots = forex is traded in lots, where a lot is $100,000 normally - you might have to confirm this as it may vary from country to country
margin = also known as the account margin, this is a minimum forex account size
margin call = the broker will call you when your account falls below margin requirements, so that you have to put up the difference
market order = order to buy and sell at the market price
limit order = order to buy and sell at a certain price
stop-loss order = is a limit order linked to an open trade to prevent additional losses
GTC = good till cancelled order - active in the market till you cancel it
GFD = good for the day order - active till the end of the trading day for forex
OCO = order cancels other order - a mixture of limit or stop loss orders
More to come on forex and how to make money with forex in future posts here on Ideas on how to become rich.
