Forex trading can be difficult at the best of times. Even if you're doing it full-time and sitting at a computer screen all day closely monitoring your positions, it can be really tough going. So can you really make money from forex trading on a part-time basis?
Well I am a profitable forex trader overall and although I do sit at my screen for most of the day, most of this time is spent working on my various websites. The actual time spent staring at charts is minimal in comparison.
My relaxed attitude to forex trading is down to the fact that my main trading method is based on the 4 hour charts of the major currency pairs. As well as using a number of technical indicators for guidance, one of my most tried and trusted methods is to wait for crossovers in short-term EMAs (Exponential Moving Averages). This generally only requires me to glance at my charts every so often to see if a crossover is imminent.
Admittedly, however, this isn't really a true definition of part-time trading. I still have to be at my monitor for most of the day either looking for new positions or keeping an eye on any open positions.
Part-time trading really means only trading forex for a portion of the day, for example only during certain hours, or taking a hands off approach and setting entry and exit orders (including stop losses and limit orders) that will be triggered automatically if a certain price is achieved some time in the future when you are away from your computer.
This sounds even more difficult but it is actually quite possible to make profits this way. For example if you are only going to trade for a portion of the day and take a shorter-term approach, you could do a lot worse than only trading during the opening hour or two of the London session, ie 8.00-9.00 UK time. I often trade the 5 minute charts during this time and make decent profits because prices of the major currencies, particularly the GBP/USD and the EUR/USD trend strongly during this busy opening hour.
Another method of trading is to only trade the daily charts. For example, if you are working full-time your best bet would probably be to devise a strategy that monitors daily support and resistance levels and looks for possible breakouts the following day. This way you could set your orders the night before and they will be triggered if a certain price is met.
So to sum up, it is most definitely possible to trade the markets on a part-time basis. In fact you will often find that traders who only trade during certain busy periods of the day do just as well, if not better, than traders who trade all day long.
James Woolley runs a forex blog which includes trading tips and strategies, a review of FXcast and a Forex Club review.
Wednesday 30 April 2008
Wednesday 23 April 2008
The Major Pitfalls Of Backtesting Technical Indicators
Backtesting technical indicators and viewing historical charts of currencies or stocks, for example, can provide useful information about whether a technical indicator or combination of indicators can be relied upon to help make profitable trading decisions.
However in my years of experience as a forex trader and having spent hours on end poring over historical charts to see how effective a particular indicator or system is, there is one thing I've learnt and that's that historical data can very often be misleading.
Often you will find that the latest technical indicator that you're testing out has proven to be extremely effective at predicting forthcoming price moves based on historical charts, but when you come to trade this indicator in real time the results are not as profitable as it would seem from your past analysis.
This is because there are certain indicators that repaint data in real time that doesn't necessarily show up in historical charts. They may change or give a clear signal during a particular candle period, but after the candle or bar is closed, there is no evidence that such a signal ever took place.
This is why real time trading is so much harder than it would seem from analysing price charts from the past.
An example of such an indicator is any of the moving averages. Let's take the EMA (Exponential Moving Average) as an example.
Often you will see a shorter term EMA cross a longer term EMA in real time, which is very often a strong signal, but if the price suddenly reverses then the shorter term EMA will also reverse and so a crossover may not happen at all.
Therefore when the current candle closes it will appear as if a crossover never actually happened even though in real time it did briefly and you could have made a trading decision based on this crossover. So this is an example of how historical data can be misleading and doesn't always tell the whole story.
Similarly there are are a number of other repainting indicators which can also change or reverse in real time, but which don't necessarily indicate this when viewed later on on a historical chart after the candle is closed.
So overall you have to be very careful when viewing past data because often the chart will tell a different story after the candle or bar has closed than what actually happened when you were trading live. If historical patterns and trends played out exactly in real time as they appeared to do in the past, with no misleading or false signals, then we would all be extremely wealthy.
Click here to read James Woolley's FXcast review, his Forex Trading Machine review and all the latest tips and strategies related to forex currency trading.
However in my years of experience as a forex trader and having spent hours on end poring over historical charts to see how effective a particular indicator or system is, there is one thing I've learnt and that's that historical data can very often be misleading.
Often you will find that the latest technical indicator that you're testing out has proven to be extremely effective at predicting forthcoming price moves based on historical charts, but when you come to trade this indicator in real time the results are not as profitable as it would seem from your past analysis.
This is because there are certain indicators that repaint data in real time that doesn't necessarily show up in historical charts. They may change or give a clear signal during a particular candle period, but after the candle or bar is closed, there is no evidence that such a signal ever took place.
This is why real time trading is so much harder than it would seem from analysing price charts from the past.
An example of such an indicator is any of the moving averages. Let's take the EMA (Exponential Moving Average) as an example.
Often you will see a shorter term EMA cross a longer term EMA in real time, which is very often a strong signal, but if the price suddenly reverses then the shorter term EMA will also reverse and so a crossover may not happen at all.
Therefore when the current candle closes it will appear as if a crossover never actually happened even though in real time it did briefly and you could have made a trading decision based on this crossover. So this is an example of how historical data can be misleading and doesn't always tell the whole story.
Similarly there are are a number of other repainting indicators which can also change or reverse in real time, but which don't necessarily indicate this when viewed later on on a historical chart after the candle is closed.
So overall you have to be very careful when viewing past data because often the chart will tell a different story after the candle or bar has closed than what actually happened when you were trading live. If historical patterns and trends played out exactly in real time as they appeared to do in the past, with no misleading or false signals, then we would all be extremely wealthy.
Click here to read James Woolley's FXcast review, his Forex Trading Machine review and all the latest tips and strategies related to forex currency trading.
Saturday 19 April 2008
How To Win With Forex
Trading in the forex market can be very intimidating. Every good currency trader is always looking for a way to increase profits and reduce risk.
What is your forex trading style consisting of? Do you trade in the forex market on the short term? If the answer is yes, you should be alert to the release of data and how it effects and moves the forex market on an almost daily basis. When you as a forex trader prepare for the upcoming trading day you need to be aware of the possible market moving events that present themselves. Here is an example of a market moving event that presents itself regularly and offers a great opportunity for forex traders to make a nice and quick profit.
CCI - Consumer Confidence Index
On the last Tuesday of each month, the Conference Board covers each individual month's data. The CCI is made up of a survey of five thousand households across the United States. It is well regarded as the most reliable indicator of confidence by consumers.
As consumer confidence is measured this number becomes incredibly meaningful to the forex trader because the Federal Reserve uses this number when considering whether or not to increase and decrease interest rates. Obviously, this has a huge impact on the United States Dollar. This even is a great mover of the market because 2/3 of the United States economy is consumption.
Now that you have one of the many opportunities before you as a trader, the question is what to do with it? The answer fortunately is clear: Get good trading signals from a software company that you can relay on.
Make a Killing Trading Forex! Forex Killer is the place to visit.
See what a Forex Trading Robot can do for you! Forex Robot is a must.
What is your forex trading style consisting of? Do you trade in the forex market on the short term? If the answer is yes, you should be alert to the release of data and how it effects and moves the forex market on an almost daily basis. When you as a forex trader prepare for the upcoming trading day you need to be aware of the possible market moving events that present themselves. Here is an example of a market moving event that presents itself regularly and offers a great opportunity for forex traders to make a nice and quick profit.
CCI - Consumer Confidence Index
On the last Tuesday of each month, the Conference Board covers each individual month's data. The CCI is made up of a survey of five thousand households across the United States. It is well regarded as the most reliable indicator of confidence by consumers.
As consumer confidence is measured this number becomes incredibly meaningful to the forex trader because the Federal Reserve uses this number when considering whether or not to increase and decrease interest rates. Obviously, this has a huge impact on the United States Dollar. This even is a great mover of the market because 2/3 of the United States economy is consumption.
Now that you have one of the many opportunities before you as a trader, the question is what to do with it? The answer fortunately is clear: Get good trading signals from a software company that you can relay on.
Make a Killing Trading Forex! Forex Killer is the place to visit.
See what a Forex Trading Robot can do for you! Forex Robot is a must.
Monday 14 April 2008
Forex Day Trading 101 - Important Facts for Novice Traders
This article is for novice traders and we are going to look at 3 facts which are all you need to know to decide whether day trading is right for you. So let's continue and review our forex trading 101 continues below...
Fact 1
All Short Term Volatility is Random
There is no order to short term volatility and prices can and do go anywhere in short time periods - Why?
Quite simply there are huge numbers of traders all with different levels of skills, systems and motivations for trading and you can tell what this mass diverse group of people will do in short periods of time - it's laughable that traders think you can measure human psychology of millions in just a few hours but they do and they lose for believing it.
Fact 2
Random Volatility = No Odds on Your Side
Forget the far out investment crowd who believe there scientific order and you can predict forex prices you can't ( if you could there would be no market as we would all know the answer in advance!), so those systems who tell you can make a regular income guaranteed are totally wrong. Forex trading is an odds game and to win you must be able to get the odds on your side. If volatility is random, you can't get the odds on your side and will lose - period.
Fact 3
Day Trading Breaks a Fundamental Rule of Trading
This is of course run your profits to cover your inevitable losses.
In forex day trading stops are close and losses are small and because you can get the odds on your side, you have a lot of them. Of course sometimes the forex day trader ends up with a profit when he's lucky - what does the trader do? Run it? Not a chance he cuts it!
It's pretty obvious that you would have to have luck constantly on your side to win and of course luck doesn't last forever. Eventually you have small losses and lots of them and the occasional small profit which leads to a decline and final wipe out of equity.
What about all the track records that claim to make money you may ask?
Well they all have the disclaimer / warning repeated below or a similar one and they mean nothing, as there just saying the track record has been made up and simulated on paper in hypothetical trading, read it carefully:
"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".
You will NEVER see a day trading system sold online with a long term audited track record of gains - Why? If you have read this article you will already know the answer it doesn't work.
If you want to win you need to trade the odds and that means trading longer term.
So instead of day trading make longer term trading part of your forex education and you could enjoy currency trading success.
NEW! 2 X FREE ESSENTIAL TRADER PDFS
For free 2 x trading Pdf's with 90 of pages of essential info on Currency Trading Basics visit our website at: http://www.learncurrencytradingonline.com
Fact 1
All Short Term Volatility is Random
There is no order to short term volatility and prices can and do go anywhere in short time periods - Why?
Quite simply there are huge numbers of traders all with different levels of skills, systems and motivations for trading and you can tell what this mass diverse group of people will do in short periods of time - it's laughable that traders think you can measure human psychology of millions in just a few hours but they do and they lose for believing it.
Fact 2
Random Volatility = No Odds on Your Side
Forget the far out investment crowd who believe there scientific order and you can predict forex prices you can't ( if you could there would be no market as we would all know the answer in advance!), so those systems who tell you can make a regular income guaranteed are totally wrong. Forex trading is an odds game and to win you must be able to get the odds on your side. If volatility is random, you can't get the odds on your side and will lose - period.
Fact 3
Day Trading Breaks a Fundamental Rule of Trading
This is of course run your profits to cover your inevitable losses.
In forex day trading stops are close and losses are small and because you can get the odds on your side, you have a lot of them. Of course sometimes the forex day trader ends up with a profit when he's lucky - what does the trader do? Run it? Not a chance he cuts it!
It's pretty obvious that you would have to have luck constantly on your side to win and of course luck doesn't last forever. Eventually you have small losses and lots of them and the occasional small profit which leads to a decline and final wipe out of equity.
What about all the track records that claim to make money you may ask?
Well they all have the disclaimer / warning repeated below or a similar one and they mean nothing, as there just saying the track record has been made up and simulated on paper in hypothetical trading, read it carefully:
"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".
You will NEVER see a day trading system sold online with a long term audited track record of gains - Why? If you have read this article you will already know the answer it doesn't work.
If you want to win you need to trade the odds and that means trading longer term.
So instead of day trading make longer term trading part of your forex education and you could enjoy currency trading success.
NEW! 2 X FREE ESSENTIAL TRADER PDFS
For free 2 x trading Pdf's with 90 of pages of essential info on Currency Trading Basics visit our website at: http://www.learncurrencytradingonline.com
Saturday 12 April 2008
Understanding The Various Types Of Currency
Having sufficient currency is the only way to survive in this big world. Even the smallest tribes in Africa use some form of money to ensure their survival.
It may not be the usual paper money that we are used to using, but they still use something in order to purchase or trade items. Living in this world depends on having money. Learning all about money can make a person smarter and more knowledgeable about the inner workings of the foreign markets around the world.
One type of currency that is prevalent in more than one country is the euro. The euro is used as the main form of money in over fifteen nations in Europe and became a reality in early 1999. When it took over, it replaced items such as the franc and the deutschmark.
The euro was created for several different reasons and one can learn all about this unique monetary form at "Ec Europa". The part of the website that is dedicated to the euro is very informative.
To find out more about global forms of money, a visit to "Fact Monster" will be informative. This site is mainly intended for children to do research for their classes, but one can learn much information from this site. For example, a person can learn that Poland uses zloty as their main form of money and Russia has the ruble. Also available on this website are links to more detailed information about the countries listed.
Currency fluctuations can affect the foreign markets around the world. However, if one does not understand the various types of money that are in existence around the world, then they can become lost in the world markets.
If one is looking to make money in the markets, then the internet is the place to begin educating one self. By understanding all one can about the world markets, the foreign exchange and how the foreign exchange rate works, then perhaps one can dabble in some currency trading.
Learn more about the types of currency at Mike Selvon portal. While you are there leave is a comment at our currency rates blog, and receive your FREE gift.
It may not be the usual paper money that we are used to using, but they still use something in order to purchase or trade items. Living in this world depends on having money. Learning all about money can make a person smarter and more knowledgeable about the inner workings of the foreign markets around the world.
One type of currency that is prevalent in more than one country is the euro. The euro is used as the main form of money in over fifteen nations in Europe and became a reality in early 1999. When it took over, it replaced items such as the franc and the deutschmark.
The euro was created for several different reasons and one can learn all about this unique monetary form at "Ec Europa". The part of the website that is dedicated to the euro is very informative.
To find out more about global forms of money, a visit to "Fact Monster" will be informative. This site is mainly intended for children to do research for their classes, but one can learn much information from this site. For example, a person can learn that Poland uses zloty as their main form of money and Russia has the ruble. Also available on this website are links to more detailed information about the countries listed.
Currency fluctuations can affect the foreign markets around the world. However, if one does not understand the various types of money that are in existence around the world, then they can become lost in the world markets.
If one is looking to make money in the markets, then the internet is the place to begin educating one self. By understanding all one can about the world markets, the foreign exchange and how the foreign exchange rate works, then perhaps one can dabble in some currency trading.
Learn more about the types of currency at Mike Selvon portal. While you are there leave is a comment at our currency rates blog, and receive your FREE gift.
Friday 11 April 2008
Forex Trading - Advantage of Forex Trading Over Stock and Commodity Markets
The Foreign Exchange Market is better known as Forex trading. The question often arises of whether there is an advantage of Forex trading over stock and commodity markets. There are indeed advantages of investment in financial trading on the Forex market over the stock and commodity markets, and I will address those advantages in this commentary.
The Forex market offers so many advantages over stock and commodity markets that it is not hard to understand its popularity. The Forex market has centers located around the world so financial trading can be completed 24 hours a day. The Forex market is a truly worldwide market, and so when the doors close in one trading center another financial trading center is opening.
The second advantage of Forex trading involves the mind-set of the investors. While the Forex market indeed fluctuates with trends and cycles; it does not have the Bull and Bear market mentality of the stock and commodity markets.
The third advantage of Forex trading is that the Forex market involves financial trading of money. If the value of one currency falls on hard times, it gives potential for a profit in another currency. The Forex market is not negatively affected by rising interest rates. When a nation raises its interest rates the currency is generally strengthened, but raising interest rates has a tendency to depress the stock market.
The fourth advantage of Forex trading relates to the number of possible trades as related to the stock and commodity markets. The NYSE and NASDAQ markets have a combined total of about 8000 different stocks. It is very time consuming to stay on top of even a small portion of them. On the other hand, the Forex market has only four major currencies and just about 34 secondary currencies to consider.
The fifth advantage of Forex trading is associated with brokerage firms, because you do not have to pay commission fees when you participate in financial trading. Additionally, Forex market analysts tend to actually examine the currency market rather than dictate or manage the rise and fall of it, as the case often is in the and commodity market.
When the Forex market and the stock and commodity market are put toe-to-toe, the Forex market appears to be a better investment choice.
Here's something that is interesting; over $123 TRILLION was spent Online during 2007 and it is growing by OVER 20% a year. Get in on the Action. You can make 5 or 10 Grand EVERY month with NO phone calls, NO selling, NO start-up costs and very little work.
Click here and join my team I'm J.Michael Brown and you could make money and improve your health while doing it. Find out how to get a F*R*E*E Health & Wellness product and 2 Websites set-up F*R*E*E.
Learn about an Easy Way to Wealth and how you can get Inner Peace. It's all in a book, which has a step-by-step guide regarding a formula that I use every day. It explains how you can get everything you really want in life simply by doing three quick & easy things during the day. It is all in a well-documented book on my Website.
I hope you enjoyed this article. Go to http://www.eMoney101.com and read more of my commentaries that are about: Leadership, Losing Weight, Stopping Bad Habits, Love, Marriage and a lot more.
The Forex market offers so many advantages over stock and commodity markets that it is not hard to understand its popularity. The Forex market has centers located around the world so financial trading can be completed 24 hours a day. The Forex market is a truly worldwide market, and so when the doors close in one trading center another financial trading center is opening.
The second advantage of Forex trading involves the mind-set of the investors. While the Forex market indeed fluctuates with trends and cycles; it does not have the Bull and Bear market mentality of the stock and commodity markets.
The third advantage of Forex trading is that the Forex market involves financial trading of money. If the value of one currency falls on hard times, it gives potential for a profit in another currency. The Forex market is not negatively affected by rising interest rates. When a nation raises its interest rates the currency is generally strengthened, but raising interest rates has a tendency to depress the stock market.
The fourth advantage of Forex trading relates to the number of possible trades as related to the stock and commodity markets. The NYSE and NASDAQ markets have a combined total of about 8000 different stocks. It is very time consuming to stay on top of even a small portion of them. On the other hand, the Forex market has only four major currencies and just about 34 secondary currencies to consider.
The fifth advantage of Forex trading is associated with brokerage firms, because you do not have to pay commission fees when you participate in financial trading. Additionally, Forex market analysts tend to actually examine the currency market rather than dictate or manage the rise and fall of it, as the case often is in the and commodity market.
When the Forex market and the stock and commodity market are put toe-to-toe, the Forex market appears to be a better investment choice.
Here's something that is interesting; over $123 TRILLION was spent Online during 2007 and it is growing by OVER 20% a year. Get in on the Action. You can make 5 or 10 Grand EVERY month with NO phone calls, NO selling, NO start-up costs and very little work.
Click here and join my team I'm J.Michael Brown and you could make money and improve your health while doing it. Find out how to get a F*R*E*E Health & Wellness product and 2 Websites set-up F*R*E*E.
Learn about an Easy Way to Wealth and how you can get Inner Peace. It's all in a book, which has a step-by-step guide regarding a formula that I use every day. It explains how you can get everything you really want in life simply by doing three quick & easy things during the day. It is all in a well-documented book on my Website.
I hope you enjoyed this article. Go to http://www.eMoney101.com and read more of my commentaries that are about: Leadership, Losing Weight, Stopping Bad Habits, Love, Marriage and a lot more.
Thursday 10 April 2008
Trader Tricks So You Won't Lose in the Forex Market
The forex market or the foreign exchange market has become a central and important business center. $2 trillion trades a day are made in this enormous market that is becoming more and more popular. You can make a lot of money but you can also lose a lot of money if your not careful here are some tips for success.
You begin with making yourself a trading plan one that can fit into your life. Make yourself a proper schedule at what times will you be doing your forex trading. Then check out what money you can put into the Market and build a proper budget so you can see the inflows and outflows. Take time and study the forex market you will have your ups and downs but you must stick to your plans so you will see profits on the long run. Then you must make sure that you have money that you can lose. It's a fact that in the forex market you need money to lose. There is no way to make money without losing some so make sure before you begin you have a sum that can be used for this purpose.
At least until you know what your doing go with the flow. Begin by trading the most popular currencies that are: United States dollar, USD, the Japanese yen, JPY, the European Euro, EUR, the United Kingdom pound, GBP, the Australian dollar, AUD, the Swiss franc, CHF, and the Canadian dollar, CAD. The majority usually chooses these pairs: GBP/USD, EUR/USD, AUD/USD, USD/JPY, USD/CHF, and USD/CAD. To make sure that your money will be well used is by keeping to your plan. Don't change your plan because you have a feeling. Make decisions cold minded and teach yourself to exit when the signs show you should.
The trends in the forex market are quite safe. The currencies can shift a bit in different directions but they usually stay quite steadily in a certain direction. So to follow the trends is usually a good idea. If you want success in the forex market be patient it pays off. Expect to have small losses without them you won't win either. The small losses are part of your plan to make big sums of money don't let them bother you. even great traders lose some to gain some.
You should be very careful of forex scams - companies that offer you services that can only pull you down. You must get away from them as quickly as possible. Build your own strategy with forex experts and trade by yourself or by licensed brokers. Make sure that you are using forex strategies that you understand and that all the information you have comes from forex guides, tutorials or professional forex signals providers. Be sure that you now what you are doing. Teach yourself to exit before you are in too deep. Keep inside your money limits and don't allow yourself to go over board. Leave when it's time, don't wait for the fall!
Mauro Sciaccaluga
You begin with making yourself a trading plan one that can fit into your life. Make yourself a proper schedule at what times will you be doing your forex trading. Then check out what money you can put into the Market and build a proper budget so you can see the inflows and outflows. Take time and study the forex market you will have your ups and downs but you must stick to your plans so you will see profits on the long run. Then you must make sure that you have money that you can lose. It's a fact that in the forex market you need money to lose. There is no way to make money without losing some so make sure before you begin you have a sum that can be used for this purpose.
At least until you know what your doing go with the flow. Begin by trading the most popular currencies that are: United States dollar, USD, the Japanese yen, JPY, the European Euro, EUR, the United Kingdom pound, GBP, the Australian dollar, AUD, the Swiss franc, CHF, and the Canadian dollar, CAD. The majority usually chooses these pairs: GBP/USD, EUR/USD, AUD/USD, USD/JPY, USD/CHF, and USD/CAD. To make sure that your money will be well used is by keeping to your plan. Don't change your plan because you have a feeling. Make decisions cold minded and teach yourself to exit when the signs show you should.
The trends in the forex market are quite safe. The currencies can shift a bit in different directions but they usually stay quite steadily in a certain direction. So to follow the trends is usually a good idea. If you want success in the forex market be patient it pays off. Expect to have small losses without them you won't win either. The small losses are part of your plan to make big sums of money don't let them bother you. even great traders lose some to gain some.
You should be very careful of forex scams - companies that offer you services that can only pull you down. You must get away from them as quickly as possible. Build your own strategy with forex experts and trade by yourself or by licensed brokers. Make sure that you are using forex strategies that you understand and that all the information you have comes from forex guides, tutorials or professional forex signals providers. Be sure that you now what you are doing. Teach yourself to exit before you are in too deep. Keep inside your money limits and don't allow yourself to go over board. Leave when it's time, don't wait for the fall!
Mauro Sciaccaluga
Wednesday 9 April 2008
Beginner Forex Trading - What Every Beginner Should Know About Currency Trading
Forex trading is a very appealing way to make money online. Trillions of dollars exchange hands every day, and entire fortunes are made and lost literally overnight.
Part of the attractiveness of the Forex market is the ability for retail traders to trade on margin. Margin trading essentially involves the ability to trade a large sum of currency using only a fraction of your own money.
For example, when trading on a margin of 1:100, you can control $10,000 worth of currency using only $100 of your own money. This is what lures many amateur traders to take part in this multi-trillion dollar market - the potential to make a lot of money, by risking only a little of your own.
Understanding The Risks Of Margin Trading
Although margin trading is indeed a great way to make big bucks, beginner traders would do well do remember that it's actually a double-edged sword - it's just as easy to lose money as it is to win. So even though one can make potentially $300 in an hour, it's also equally likely for that person to lose the same amount within an hour (or even in a shorter time period!).
There Is No Central Governing Authority
The next thing beginner traders should know is that there is no official governing authority in the Forex trading industry. What this means is that unlike other financial trading exchanges where there is centralized control (such as the SEC for the stock market), the currency exchange market is not regulated by any organization at all.
This poses an extra risk for retail traders as it leaves the potential for scam ‘brokers' to set up shop, take your money and basically run away with it.
That's why retail traders will have to be extra careful when choosing a broker to work with. Where possible, do try to find reputable brokers such as big banks or other well-established trading houses.
You definitely wouldn't want to risk having your money cheated by scammers who are looking to make a quick buck at your expense.
Harold Hsu is currently giving away a free 26-page report on how to trade Forex profitably, and you can get it now at http://www.ForexSystemProfits.com. Harold is the owner of http://www.ForexSystemProfits.com where he provides premium Forex trading information and resources.
Part of the attractiveness of the Forex market is the ability for retail traders to trade on margin. Margin trading essentially involves the ability to trade a large sum of currency using only a fraction of your own money.
For example, when trading on a margin of 1:100, you can control $10,000 worth of currency using only $100 of your own money. This is what lures many amateur traders to take part in this multi-trillion dollar market - the potential to make a lot of money, by risking only a little of your own.
Understanding The Risks Of Margin Trading
Although margin trading is indeed a great way to make big bucks, beginner traders would do well do remember that it's actually a double-edged sword - it's just as easy to lose money as it is to win. So even though one can make potentially $300 in an hour, it's also equally likely for that person to lose the same amount within an hour (or even in a shorter time period!).
There Is No Central Governing Authority
The next thing beginner traders should know is that there is no official governing authority in the Forex trading industry. What this means is that unlike other financial trading exchanges where there is centralized control (such as the SEC for the stock market), the currency exchange market is not regulated by any organization at all.
This poses an extra risk for retail traders as it leaves the potential for scam ‘brokers' to set up shop, take your money and basically run away with it.
That's why retail traders will have to be extra careful when choosing a broker to work with. Where possible, do try to find reputable brokers such as big banks or other well-established trading houses.
You definitely wouldn't want to risk having your money cheated by scammers who are looking to make a quick buck at your expense.
Harold Hsu is currently giving away a free 26-page report on how to trade Forex profitably, and you can get it now at http://www.ForexSystemProfits.com. Harold is the owner of http://www.ForexSystemProfits.com where he provides premium Forex trading information and resources.
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