International Currency Trading: A Simple Introduction

What is international currency trading and why should it matter to you? The answer is that maybe it does not matter at all, unless you are interested in making money from home with this fast growing speculative trading method.

Have you ever thought about the way that the dollar or another currency is constantly rising or falling, and what this means in practice? It means that they can be traded on the open market, just like stock. Money can be made from assessing which currencies are likely to rise or fall, and trading them one way and then the other in order to make a profit on the difference.

Keep in mind that when you see financial news reports on TV, they do not just say “the dollar rose” or “the dollar fell”. They always talk about it rising or falling against another currency, such as the euro, or against a basket of currencies. This is because a currency only has exchange value when you compare it with one or more other currencies.

The international currency trading market is usually known as the foreign exchange market, or forex for short. This is a huge global market, much bigger than the stock market, that trades in all time zones, operating 24 hours a day.

It is something that can be done from home these days if you have a computer with a high speed internet connection, but trading currencies can be very risky, especially if you do not know what you are doing. As with any speculative investment there is no guarantee that you will make money and there is always a risk of losing your investment.

However, there is a safe way to get started and that is by opening a demo or practice account. This is a dummy account that lets you trade using real time prices but without any real money. It’s a little like the play money that you might use in certain online games.

To make the most of your practice trading you should do everything you can to convince yourself that it is real, so that you learn not to take unnecessary risks. You will find that sometimes you gain and sometimes you lose, but when your profits are consistently exceeding your losses you are probably ready to begin trading with real money.

These accounts are available from forex brokers who are doing all they can these days to attract new clients. When you are ready to start forex trading for real, they will often let you begin with just a few hundred dollars or even less.

There are many facilities available to help you make money from your international currency trading. When you are starting out you will find plenty of books, ebooks, instructional DVDs and online videos aimed at helping beginners to get started and find a successful trading system. You will also find free newsletters, forex forums and charting services. As you become more serious about your trading you may find it worthwhile to attend one of the many currency trading seminars that are run by brokers or successful traders.

The hardest part of learning forex trading is having the discipline to stick to your system so that you do not take too many risks. Focus on this when you are looking for training and you will have the best chance of setting yourself up for success with international currency trading.

Happy Trading!

The Forex Dude

Forex Expert Advisor Reviews

Forex expert advisor reviews can be very valuable for anyone thinking of investing in the foreign exchange market. If you are thinking of buying a forex robot to do your trading for you, you should certainly look at the reviews of expert advisors or EAs which is the name generally given to currency trading robots that operate on the free software platform Metatrader 4.

Currency trading is not the easiest style of investment to learn for a beginner, especially as most people trade their accounts themselves from their home computers. It is not just a question of giving your money to the broker or investment company and hoping for good results.

If you are going to trade on the foreign exchange market without a robot, you need to be constantly analyzing all kinds of charts, graphs and technical information so that you have a chance of working out when the prices are likely to rise and fall. As you can imagine, it takes time, experience and a lot of testing to learn to do this, even assuming that you have the kind of brain that easily handles numbers and complex charts.

However, if you use a software program to trade for you, otherwise known as a forex robot or expert advisor, it will automatically make all the calculations and open and close trades according to its settings. It will operate according to a certain system but you still have control of the settings.

The most important things to look for when you are reading forex expert advisor reviews are the results that the average user is getting, and whether the robot is suitable for your level of experience and your trading style, if you have one.

If you are a beginner you may not want something that is very difficult to set up. On the other hand if an EA is getting very good results, it could be worth spending the time to master it. There is no point in paying good money for a robot that will not be successful, however easy it may be to use.

Always remember that foreign exchange trading is risky. Robots will do what they are told but the market trends will not always follow a predicted pattern. You may lose money even if past results have been good. You should only invest what you can afford to lose, even though there is huge potential to make money with forex trading.

Forex expert advisor reviews are great for picking up hints and tips about how to use the software as well as comparisons of the different robots that are available.

Happy Trading!

The Forex Dude

Free Forex Training: The Biggest Enemy Of The Forex Trader

In this free forex training article we will consider one of the biggest traps that you can fall into as a currency trader. So what is public enemy number one of the forex trading market? The answer may surprise you.

Systems are important but they are often not as important as the mindset or attitude that we have when we apply them. It is vital not to let your emotions make your decisions for you. Now, most traders already know that and yet they find themselves falling into the trap over and over. Why does that happen? It’s all due to stress.

Forex is a stressful business and stress automatically sets off a physical reaction in the body, often called the ‘fight or flight’ response. Adrenaline surges around the body screaming at you to take some kind of action – right now! This is why it is so difficult to sit it out and wait for the right signals to open or close a trade.

When this happens, it feels like you have an intuition to take a certain course of action, but it is important not to act on it unless you are a very experienced trader. The so-called intuitive decisions of some successful traders are almost certainly based upon subconsciously remembering and recognizing patterns in the market from their many years of trading.

If you do not have that experience, your impulses to act in a certain way when the pressure is on are just coming from the emotions raised by the stress you are under: either fear or a strong desire to fight and win. If you have trouble believing this, just paper trade every time it happens. You will soon see that these emotional decisions do not pay.

If you find it difficult to keep your cool under the pressure of this enemy within, the ideal thing to do would be to take a break from the screen. However, this is not always possible. You may need to be there to keep your eye on the market. But what you can do is to relax physically.

For a quick relaxation exercise that you can do right there at your desk, focus on each part of your body one by one, starting with the face and working down to the feet. For each area, contract all the muscles, then release. So for your face you would close your eyes and screw up your face into a tense, tight grimace, then let go. When you relax it is important to be very aware of the muscles that you have just tensed and make sure they release every last bit of their tension.

So next time you are sitting at your screen knowing that you must wait for the right moment and yet feeling a desperate urge to jump in right now, remember that it is not intuition. It is not a message from above. It is stress bumping up your adrenaline, and you can handle it with the help of our anti stress free forex training.

Happy Trading!

The Forex Dude

Forex Real Time News Trading

Forex real time news trading is a way of making money on the forex market from international events and upcoming current affairs stories. Predicting the way that these events will go and their effect on the currency markets can appear to be very profitable, at least in theory. The problem is that in practice things do not often go the way that you might expect.

The truth is that when it comes to financial news, the major international banks pretty much always make sure that they are the first to hear. When an expected report is released they will have people right there. The trade-from-home little guy, on the other hand, has to wait a few crucial minutes for the report to appear on the TV news or the internet. Even seconds can make a difference.

At times like this the markets will change so swiftly that you cannot really hope to jump in and make money. The banks will dominate the markets and although you may sometimes be lucky, you could easily be wiped out if the news goes against you.

In practice if you do want to trade on the outcome of an upcoming event such as an election or a financial report, you are more likely to try it by opening a trade before the announcement. You might have a strong belief that it will go one way or the other. However, you cannot really know for sure. When you think about it, opening a trade at this time is really nothing more than betting on the outcome.

It is at times like this that we tend to be easily carried away by our own ideas, hopes and emotions. It is can be very difficult to make a rational assessment of a situation where so much can ride on the outcome. Therefore, unless you are really in the thick of the financial news centers, it is probably best to avoid this kind of trading. A system that makes steady profits over a period of time is the best way for most small traders to operate.

Of course you must still keep one eye on the news while you are actively trading, but instead of aiming to make money from current and upcoming events, you are more likely to want to close out on your trades before certain reports are released. Critical times include the opening of the stock exchange in the countries whose currencies you are involved with, and announcements of interest rate changes in those countries. In addition, the USA is such a major player in the forex markets that events in the USA can affect all currency pairs, even if you are not trading the US dollar. You will probably want to avoid being caught with an open trade at all of these times.

For this reason, most traders who operate a sound forex trading system will avoid trading altogether in the extremely uncertain times preceding a major announcement or release of forex real time news.

Happy Trading!

The Forex Dude

Demo Currency Trading: Is It Bad For Your Health?

Demo currency trading accounts are offered as a great free benefit by most forex brokers and are promoted all over in the trading world, but are they always such a big bonus? Could they be bad for your trading health? In this article we will consider demo currency trading accounts from all points of view and take their bad points along with the good.

What is a demo account?

If you have ever used an online casino you will know that most of them have two modes: real money, where you have to actually deposit funds and risk them, or fun/demo mode, where you have an imaginary account balance. They hope you will get addicted, or win a lot of imaginary money and think you are invincible, so that you will go ahead and open up a real money account.

Demo forex accounts are very similar in some ways. Brokers offer demo accounts hoping that you will try out their software platform and like it. They give you the chance to start trading and work out a profitable system without risk, on the assumption that when you decide to invest funds you will go with the platform that you have become familiar with.

From the point of view of the beginner trader, using a demo account has a lot of advantages. It gives you the chance to apply what you have read and begin trading without risk. Ideally, you will start out with or quickly develop a profitable system and a solid trading plan. You will learn to make money from forex trading, develop a cool head and move on to become a successful real money trader. However …

A demo currency trading account has one big disadvantage and strangely, that is the same as one of its advantages: the fact that it is risk free. When you are not using your own hard earned cash you are likely to open trades on feeling rather than systems, or take risks that you would not take with real money. If you are lucky and your demo trades do well, you may open a real money account with misplaced confidence, thinking that you cannot lose. Experience will sadly soon show you that you were wrong!

Demo accounts are great for experienced traders who just want to get to know a new broker’s platform before they commit to switching their account. They are also good for beginners, but only if they use them properly. You absolutely must learn to apply a trading plan consistently and with discipline before you start trading with real money. If you do not do that, a demo currency trading account may be worse than useless.

Happy Trading!

The Forex Dude

What Is Forex Hedging?

Forex hedging is a situation where you carry two offsetting positions in your account to lessen your risk in the event that things go against you. In brief, that means that you enter into a second trade in order to protect an existing position from negative events.

This sounds like a great way to get into a win-win situation but it does have its costs. In the first place of course you have to take into account the spread or transaction fees on the two positions. Calculating the cost of this and balancing your hedge requirement can be rather complicated.

Also of course by reducing your risk you are also reducing your chance of profits. Assuming your original trade goes well, the hedge position will lose, so that overall you make less money than you would have. For this reason it is not something that the average trader does all of the time. However in some circumstances, such as where you fear something may be about to happen that will overturn a current trend, you might decide it was worth doing.

It is possible to offset one spot forex transaction with another spot transaction in order to hedge it. However, this is often not ideal because of the short term delivery time of spot contracts. If you want to protect your original position for any longer you have to find another way. The most popular way is to offset with a foreign currency options contract.

As of May 2009, hedging was banned by the NFA (National Futures Association). Most reputable US brokers are members of this association which regulates forex as well as and other financial trading brokers. This means that if you try to operate a hedging trade, your broker will close it out. Usually this happens automatically.

A way around this if you like to use forex hedging systems within the same account is simply to set up with a broker in another country where it is still allowed by the regulatory bodies. This includes the UK at the time of writing. Many of the larger brokers have a UK branch since London is the biggest currency trading floor. So you can simply ask them to transfer your account to their UK office. If they cannot do this, you may have to switch to a new broker. If trading with forex hedging was your main way of making money it is probably worth doing that.

Happy Trading!

The Forex Dude

Day Trade Forex: How To Stay Sharp

When you day trade forex, you are under a huge amount of stress. You may not realize it, but it is there and it contributes to most of the stupid mistakes and bad trading decisions that are made by traders. Reducing your stress is so important, it can actually have a better effect on your bottom line than improving your system. Here are a few tips to help you keep your stress down and your profits up.

1. Take breaks

You have heard this before, but do you do it? Just walking away from the screen for 5 minutes every hour can improve your clarity of thought and therefore your trading. It is also good for your circulation and may help prevent thrombosis, a potential killer. Use a kitchen timer or popup on screen reminder software.

If you day trade forex and do not want to leave the screen with an open trade, be sure to take a break after every trade that you close, whether or not it was successful. This will help you come fresh to the next trade.

2. Join a forum

Forex trading can be a lonely business. Family and friends are usually not interested and cannot appreciate the highs and lows of your day. Becoming a regular user of an online forex forum or bulletin board makes you part of a community that can feel a lot like having work colleagues.

You will make useful contacts, have somewhere to boast of your triumphs and probably, from time to time, appreciate the support of other members when things are not going so well. You can also pick up a lot of trading tips and keep up to date on developments in the world of currency trading through membership of a forum. Be careful not to waste too much time there, but check in briefly most days to flick through the latest discussion threads.

3. Check the forex news calendar

At the start of your day, be sure to check a forex calendar or news service for any announcements or reports that are expected during the day. Do not rely on your forum membership for market news. When you know what the day is likely to bring from the moment you sit down, you can plan your trading hours. You will feel more in control of your day and your trades.

4. Get exercise

Exercising the body keeps the mind as well as the body ready for action. Starting your day with a workout or run can give you a great energy boost. Exercise also releases endorphins, making you feel more positive. While you could take exercise later in the day, early or mid morning is the best time if you want your trading as well as your muscles to reap the benefit.

5. Get a life

Do not fall into the trap of letting your computer become your world. If forex trading takes over every aspect of your life, burnout is almost inevitable. Schedule time with your family and friends, vacations and time for sports or hobbies. Take time to eat healthily too. All of these things will make the time that you do spend in front of your screen more productive, so that you can day trade forex with less stress and more profit.

Happy Trading!

The Forex Dude

FibMaster Review

In this FibMaster review we take a look at the series of videos developed by master trader Neal Hughes in the art of successful trading using the Fibonacci method.

What Is Fibonacci Trading?

Fibonacci trading is based on taking advantage of reversals in price movements. The Fibonacci sequence of numbers was discovered by an Italian mathematician in the 12th century. It has various applications in mathematics and in nature, but the importance for financial traders is that the ratio between the numbers in this sequence can predict reactive price movements or retracements.

As you will know very well, after any significant upward or downward price movement, the price will tend to ‘bounce back’ at least some of the way. This is known as retracement.

Broadly speaking, currencies and stocks tend to follow patterns in which the retracement is usually around either 23.6%, 38.2%, 50% or 61.8% of the previous move. To understand which of these is likely to apply to a particular currency movement, you need a solid system based on Fibonacci charts.

In trading, Fibonacci is a leading rather than a dragging indicator. This means that it predicts future price movements rather than analyzing past movements or averages. The future is what we need to know when we are trading, so this gives this method an advantage over other chart analysis systems from the get go.

Fibonacci Trading For Forex

Fibonacci trading has been used to produce great results in stock trading for years. In fact, it has been described as ‘trading voodoo’ because its ability to predict retracements is so uncanny. Now there is a Fibonacci trading method that can be used to trade currency on the forex market as well as for stocks, options and futures. Neal Hughes’ method can be used on all of these markets with equally solid results.

What You Get

With the FibMaster method you get two stand alone video training courses. The first is an introduction to Fibonacci trading and the systems that you can use. Following on from that is the advanced Fibonacci trading course. In total, 21 video tutorials are provided, totalling over 3 hours of training.

Subjects include: how Fibonacci trading works, advice on entry and exit levels plus stops, when to take your profit, day trading and longer term trading strategies, how to stack the odds in your favor, and more.

What You Will Need

You’ll need a computer on which to watch the videos, of course, including sound. You will also need a trading account that provides Fibonacci charts. If this is not available from your broker, you can get it from any good forex charting service.

Level

Theoretically the FibMaster method could be used by a beginner. However, the examples focus on stock trading so you do need to translate to the forex market. That is very easy to do of course if you have a little experience, but a complete beginner might find this confusing. Equally, it does depend on chart analysis which some people find easier than others. If technical analysis does not come easily to you then you will need to put in some time, but Neal Hughes makes the learning curve as short and simple as possible. However, if this is an issue, Neal also provides daily videos of forex trading opportunities through his site at dailyforexcharts.com.

The videos themselves are clear and cover everything from the basics of Fibonacci trading to more detailed analysis that you will want to save for a later viewing. The beauty of this is that you can run with a simple technique if you wish or try it all in a demo account step by step, gradually adding to your system as you master more aspects of the technique.

If you have not tried trading with Fibonacci charts before, we think you will find this method a real eye opener. If you have, Neal Hughes will almost certainly introduce you to systems and tips that you have not seen before.

Guarantee

The product is sold by Clickbank who offer a full money back guarantee for 8 weeks from the date of purchase. So you can buy and try it out in your demo account for a full two months without risk.

FibMaster Review Summary

In summary, we highly recommend the Fibonacci trading system demonstrated in the FibMaster videos if you are a forex trader looking for a new and profitable method of price movement prediction. FibMaster is the easiest and best way to profit from Fibonacci trading that we have seen.

Happy Trading!

The Forex Dude

Forex Trading Tips That You Do Not Want To Know

If you are looking for forex trading tips, take a moment to think about something that most people do not want to know, and yet it is one of the most important strategies to master if you are going to have any chance of succeeding with forex trading. This is how to deal with losing trades.

Everybody wants to hear about winners and how to make money. Nobody wants to hear about losing. However, it is clear when you think about it that minimizing your losses is just as important as maximizing your gains when it comes to making a profit. In this respect forex trading is just like a business: in order to increase your profits, you can either increase your income or you can reduce your costs. Loss management in forex trading is a question of handling the losing trades in such a way that they do not stop you making a profit on the bottom line.

The first thing to understand is that losses are inevitable. There is no point even beginning to trade live if you read that statement thinking, ‘Yes, but not for me.’ If you expect to win every trade you are going to have a bad shock which could throw you right off course. For the unprepared, a loss can make them lose faith in their system. Soon they have abandoned the system for random trading according to wild guesses about the way that the price might move. As all forex trading tips will tell you, abandoning your system is a recipe for disaster.

Losses should be accepted as a normal part of trading. You should plan for them in the sense that you always set up a stop loss when you open a trade. ALWAYS. You do not hang onto a bad trade thinking it ‘must’ go right because your system is going to produce winners every time. You accept that this one is a loser and cut your losses at the right moment. You do not start kicking yourself or wondering what went wrong. You accept that this was one of the 1 in 5 or 10 losing trades that statistically your system will produce, and you move onto the next trade without giving it another thought.

What can be harder, of course, is when there are a lot of losses in a short time. Say that your system normally throws up 1 loser in 8, but lately you have had a run where it’s almost 1 in 3. The result is that for this month you may be showing an overall loss. What do you do in this situation?

Again, before throwing out your system, make sure that this is not just a question of statistics balancing themselves out. If you look at the whole year, are you still within that 1 in 8 ratio? If so, there is no problem. Your system is still fine. Just keep an eye on it.

If you just started trading for real and this happens, then maybe you were not quite ready psychologically and there have been some mistakes. Look over your records to check that the signals were always exactly right. You may need to go back to demo for a while to be comfortable operating your system again. Then take extra care to work on stress management and clear thinking when you do go live.

Finally, if you look over your records and conclude that your system might be at fault, for example because you have stuck to it to the letter and things are just going from bad to worse, it might be time to go back to school. Stop trading for a while and take some training. In the process you may discover what went wrong with your system or you may find a better one. You will certainly pick up a lot more forex tips that will help you in the future.

Happy Trading!

The Forex Dude

Forex Trade Signals For Easy Forex Trading

Forex trade signals can provide you with an easy way to trade the currency market … as long as you understand what you are getting and what to do with it. There are many providers of forex signals out there and not all of the services are the same, so it is important to know what you are signing up for.

Many companies provide forex alerts that tell you when conditions are right for trading. In some cases they are aimed at beginners and will advise you on stop losses, profit aims and number of lots for the trade which will vary according to the strength of the observed trend.

Acting on signals like these is almost like using a forex robot, except that you do control the trade yourself. This has the advantage that the final decision is yours, but it also has the disadvantage that you may not be able to act and access the market at the time that the signal comes through, while a robot would do that automatically for you.

If you are comparing forex signal providers with the aim of following their trading plan, you will want to look at their results, if published. This is the result of making trades in the live market based on the signals. It will usually assume that all of the recommendations were followed.

When you are looking at results, keep in mind that they are often based on a standard forex account with a lot size many times bigger than most beginners would start out with. This means that you might only have a small fraction of the profits shown. Also, they will make assumptions about costs which you should check carefully. They may assume a smaller spread than you can expect on a mini or micro account.

Finally, do not be too concerned with recent results, but look at the long term trading profits or losses. Be suspicious of any company that only provides results in the very recent past. Remember that there are no guarantees with forex trading. You could pay a lot for forex signals and still end up losing money. A lot depends on how you manage your funds.

Other forex trade signals will be less prescriptive and simply announce market conditions or the results of indicators, leaving you to make your own trading decisions. In this case you have a lot more control and of course you need to understand the market yourself in order to make the best use of these alerts. Many experienced traders make use of a service like this so that they can be away from the computer for most of the day without missing good trading opportunities.

Signals are usually sent by email and/or SMS. Which you prefer depends on you. SMS is better if you check your text messages more often than email, but you may be a long way from a computer when you receive the text. It can be frustrating if you receive forex trade signals and then cannot place the trade.

Happy Trading!

The Forex Dude