Trading trend with forex

Forex trading involves the buying and selling of currencies. The manner in which this is done is by trading currency pairs. The major currency pairs are GBP/USD, EUR/USD, USD/CHF, USD/JPY, AUD/USD and USD/CAD.

There are three main methods of trading forex as follows:

1. Day trading

2. Swing trading

3. Long term trading

It has been identified that currencies follow trends. The trend will be either a rise in the value of a currency compared to another currency, or, a fall in the value of a currency compared to another currency. An example of a rise in a currency trend could be when the Euro increases in value against the US dollar. An example of a fall in a currency trend could be when the Euro declines in value against the US dollar.

You need to decide which of the three trading methods mentioned above that you are going to implement in your trading.

The moves of currency pairs throughout the day are often in a random manner making it very difficult to profit from day trading.

It is more apparent with swing trading when short term trends commence and end. This makes swing trading more profitable than day trading.

Long term trends in forex trading can last for quite a while, making this long term trading quite lucrative. There is a drawback to long term trading as the profits generated during the trend will experience days when they decrease. At times like this traders may close their forex trades as they find it difficult to deal with decreases in their profits. As a result the forex trader may well lose out on future trends in the currency pair.

Whichever method of trading you follow, ensure that you are trading in the direction of the trend so as to increase the probability of generating profits.

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by Stock Specialist ~ Thursday, July 30, 2009 0 comments

Forex trading robot for good profits

Forex trading robots are quite the rage and there are a few that can be labeled as best of the crop. Four of the best ones are briefly described below.

Forex Maestro is one of the most versatile and widely used forex robots in the business today. It combines the concept of artificial intelligence and neural network architecture to give you a very powerful and complex engine that is also simple to use and adapt to. It accounts large scale calculation and also uses an analytical perspective of market movements to give you the best possible trades for your money.

Marl doubling stocks is another critically acclaimed forex trading robot that provides some amazing real time results and tries to live up to its name of doubling. The system was developed by two engineers working on Wall Street and has been optimized over a period of ten years. The software presently is very robust and capable of giving some truly ingenious suggestions for the forex market. The best part is that it is designed to be cost effective and offers great value for money.

Forex Miracle is a robot which like its name suggests, is truly a miracle! It has unique features like giving you best case and worst case scenario suggestions. It also individually analyzes each currency pair using technical analysis so that it can accurately predict the future direction of the market movement by analyzing the pair's past price movement.

FAP Turbo needs no introduction and anyone who is aware of some of the best forex trading robots would have heard of its name. The software is simple by design and is made so that even a newcomer can start using it in a relatively short period of time. This software works best when the market is booming and attempts to reap in all the benefits to increase your wealth.

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Forex Robot

A forex robot is a widely acknowledged software or code that is claimed to simplify forex trading such that even a newbie will find it simple to start trading in the forex market. The main aim of the forex robot is to make sure that all known parameters are accounted for and you are only shown trades that match your specified criteria.

It is easy to get carried away by the claims of these robots and one should use caution so as to not become a victim of the marketing gimmicks. You need to understand that the trading market is a very intricate and complex environment that cannot be oversimplified into one program. Although these robots do offer advantages that regular trading don't, trusting them with all of your money might be a foolish decision.

To begin with, you can use the services of a robot so that your lack of experience may not be exploited by the traders. You need to realize that as you learn the tricks of the trade, you need to take in lots more into account while you use your machine along the side. If the code is not updated regularly, then the machine is as useful as a paperweight and continuing to trust it completely might be disastrous for your investments. A proper balance between using the machine and your own insights will reap rich dividends and ensure the longevity of your investments. If it was as simple as turning on a machine, then wouldn't the floor be full of only computers continuously trading between each other? Keep that in mind the next time you decide to entrust all your money on a forex robot.

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Forex Robots work like claim?

"Do forex robots actually work?" is one question that haunts many who plan to use it. Once you come to know about the concept of forex robots, you may be pondering whether it all seems too good to be true. Many individuals are in disbelief over the claims of this software and if they do all that they promise. It is tempting to get carried away with the marketing and go out and buy your copy, but as they say in Latin, Caveat emptor (Buyer Beware).

As per the survey, it is unfortunate that most of the individuals who were interviewed claim the forex automatic trading robots to be a scam and something that other should steer clear of. The root of ths is the fact that forex robots cost a bomb to purchase. Most of the reputed ones cost upwards of 2000 US$ and the really good ones can set you back by as much as 5000 US$. Once you invest this kind of money, you would want to get quick returns as well and this is the place where most people lose faith in the forex robot.

One should understand that trading forex takes time and you cannot master the art by simply going out and buying an expensive piece of software and letting it do the job for you. That would be foolish and will cost you dearly. Most of the people who are upset and claim the system to be a scam often bought it because of the glamour and promises that they saw in the infomercial. Remember that you should always test a product before buying it and the same holds good for forex robots. Work on it, use it for a while and then decide if it is what you are looking for.

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Forex Software

The forex software and service industry has literally exploded in the last few months and there is a lot of junk being thrown out at consumers to see who falls for it. Therefore, the task of assessing which forex software works best can be a daunting one.

The problem with most forex software, particularly those within the "expert advisor" category, is that they simply do not adapt to market conditions well enough to handle sudden and unpredictable movements caused by external factors.

It is a fact that the markets, whether stock or forex, behave according to certain patterns that tend to repeat themselves over time thus making it possible to somewhat predict what is going to happen next, being this the science -if you will- behind the numerous forex software available.

However, these patterns are not constant, they evolve, and this demands that traders do the same or at least use a strategy suitable for any market condition. Most forex software do not have the ability to evolve, nor they have a trading strategy capable of facing an ever changing market.

This is why you often see great results in back tests, but when you go ahead and download and use many forex software -each one claiming to be the best- you find yourself wiping out your equity in a matter of days, because the fact of the matter is that what worked in the past will not necessarily work today or tomorrow.

Therefore, in order to make sure you are getting the best forex software based on performance, you must look for alternatives that have been proven to work not only in the past, but in the present time. This will tell you that they are adaptable enough to make them profitable today and tomorrow.

Very few forex software and services have dared to take the step of showing how they work in live trading accounts that show the performance of the software on a daily basis, because doing this obviously poses a great risk for the developers, who would have the inadequacy of their product openly exposed in case that the results are not what people expect.

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Brokers Option regarding Forex

There are two seperate categories. one is forex brokers whom give or offer forex trading online and brokers who only give forex trading through telephone. Another broker offer bothe like telephone trading and online trading

The trading account minimums required by different forex option brokers vary from a few thousand dollars to over fifty thousand dollars. Also, forex option brokers may require investors to trade forex options contracts having minimum notional values (contract sizes) up to $500,000. Last, but not least, certain types of forex option contracts can be entered into and exited at any time while other types of forex option contracts lock you in until expiration or settlement. Depending on the type of forex option contract you enter into, you might get stuck the wrong way with an option contract that you can not trade out of. Before trading, investors should inquire with their forex option brokers about initial trading account minimums, required contract size minimums and contract liquidity.

There are a number of different forex option trading products offered to investors by forex option brokers. We believe it is extremely important for investors to understand the distinctly different risk characteristics of each of the forex option trading products mentioned below that are offered by firms that broker forex options.

Plain Vanilla Forex Options Broker - Plain vanilla options generally refer to standard put and call option contracts traded through an exchange (however, in the case of forex option trading, plain vanilla options would refer to the standard, generic option contracts that are traded through an over-the-counter (OTC) forex dealer or clearinghouse). In simplest terms, vanilla forex options would be defined as the buying or selling of a standard forex call option contract or forex put option contract.

There are only a few forex option broker/dealers who offer plain vanilla forex options online with real-time streaming quotes 24 hours a day. Most forex option brokers and banks only broker forex options via telephone. Vanilla forex options for major currencies have good liquidity and you can easily enter the market long or short, or exit the market any time day or night.

Vanilla forex option contracts can be used in combination with each other and/or with spot forex contracts to form a basic strategy such as writing a covered call, or much more complex forex trading strategies such as butterflies, strangles, ratio spreads, synthetics, etc. Also, plain vanilla options are often the basis of forex option trading strategies known as exotic options.

Exotic Forex Options Broker - First, it is important to note that there a couple of different forex definitions for "exotic" and we don't want anyone getting confused. The first definition of a forex "exotic" refers to any individual currency that is less broadly traded than the major currencies. The second forex definition for "exotic" is the one we refer to on this website - a forex option contract (trading strategy) that is a derivative of a standard vanilla forex option contract.

To understand what makes an exotic forex option "exotic," you must first understand what makes a forex option "non-vanilla." Plain vanilla forex options have a definitive expiration structure, payout structure and payout amount. Exotic forex option contracts may have a change in one or all of the above features of a vanilla forex option. It is important to note that exotic options, since they are often tailored to a specific's investor's needs by an exotic forex options broker, are generally not very liquid, if at all.

Exotic forex options are generally traded by commercial and institutional investors rather than retail forex traders, so we won't spend too much time covering exotic forex options brokers. Examples of exotic forex options would include Asian options (average price options or "APO's"), barrier options (payout depends on whether or not the underlying reaches a certain price level or not), baskets (payout depends on more than one currency or a "basket" of currencies), binary options (the payout is cash-or-nothing if underlying does not reach strike price), lookback options (payout is based on maximum or minimum price reached during life of the contract), compound options (options on options with multiple strikes and exercise dates), spread options, chooser options, packages and so on. Exotic options can be tailored to a specific trader's needs, therefore, exotic options contract types change and evolve over time to suit those ever-changing needs.

Since exotic forex options contracts are usually specifically tailored to an individual investor, most of the exotic options business in transacted over the telephone through forex option brokers. There are, however, a handful of forex option brokers who offer "if touched" forex options or "single payment" forex options contracts online whereby an investor can specify an amount he or she is willing to risk in exchange for a specified payout amount if the underlying price reaches a certain strike price (price level). These transactions offered by legitimate online forex brokers can be considered a type of "exotic" option. However, we have noticed that the premiums charged for these types of contracts can be higher than plain vanilla option contracts with similar strike prices and you can not sell out of the option position once you have purchased this type of option - you can only attempt to offset the position with a separate risk management strategy. As a trade-off for getting to choose the dollar amount you want to risk and the payout you wish to receive, you pay a premium and sacrifice liquidity. We would encourage investors to compare premiums before investing in these kinds of options and also make sure the brokerage firm is reputable.

Again, it is fairly easy and liquid to enter into an exotic forex option contract but it is important to note that depending on the type of exotic option contract, there may be little to no liquidity at all if you wanted to exit the position.

Firms Offering Forex Option "Betting" - A number of new firms have popped up over the last year offering forex "betting." Though some may be legitimate, a number of these firms are either off-shore entities or located in some other remote location. We generally do not consider these to be forex brokerage firms. Many do not appear to be regulated by any government agency and we strongly suggest investors perform due diligence before investing with any forex betting firms. Invest at your own risk with these firms.

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Should you invest in Forex Trading?
Should you get involved in Forex Trading? If you are already involve in the stock market, you should already have some idea of what Forex Trading really is all about. If you are newbie in trading, Forex Trading is actually investing your money into other currencies.

Let’s get into a little detail on what the difference between Forex Trading and Stock Trading. The stock market basically involves buying shares of a company and you watch a period of time of how that company does in order to have big returns. In the Forex Market, you are purchasing items or products or goods, and you are paying money for them and gaining or losing is due to the currency exchange differs daily from country to country.

In order to get ready for the Forex markets you can learn about trading and purchasing online using free “DEMO ACCOUNT� software. It is offer by most of the Forex Online Companies. Forex Exchange “Demo� is a program that allows new players to make purchase and trades in real Forex Markets with demo account; which means you don’t have to invest anything. This allows players to gain more insight on how Forex works. If you are new to this market, you could use this program to learn how to make decision based on what you know and also you could find out how you could feel when you are profiting or losing in Forex Trading. By using the DEMO ACCOUNT, new player can also gain more insight of knowing if they should get involved in this market.

If you are reading this article, it means that you already interested in investing Forex Exchange Market; but you really don’t know how to start! I invested in Forex Market for only a month, and I started with the Demo Account for 2 weeks. Currently I am trading actively and I think Forex Trading is fun and cool which I want to share my experiences with people who wants to invest a bit in this market.

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by Stock Specialist ~ Friday, July 17, 2009 0 comments