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Trading Forex For Beginners – How to Make Money Trading Forex?

admin — Sun, 18 Apr 2010 19:26:08 +0000

In the Forex market, it is possible to make money by buying and selling currencies. To understand how to make money trading Forex, some basics of the forex market need to be understood. The Forex market is very similar to a stock market; the mechanics involved in Forex trade are very much comparable to those in the stock trading field. The objective of Forex trading is exchanging one currency for another in anticipation that price will raise, so that the currency bought will be at a higher value compared to the currency sold. Every two currencies involved in the trade are known as currency pairs.

It is easy to pick up how to make money trading forex if the investor is already familiar with stock trading. An exchange rate in the Forex trade is the ratio of the value of one currency with respect to another. For instance, USD/JPY exchange rate means how many US dollars can buy one Japanese Yen or vice versa.

It is essential to learn how to read a Forex quote to know how to make money trading forex. Currencies are quoted as pairs like USD/EUR or USD/GBP. This is because every forex transaction involves two currencies – buying one currency while selling another.

If a quote is given as GBP/USD = 1.5:

· The currency given first before the slash (/) is the Base currency

· The one to the right of the slash is the Counter or Quote currency.

One more terminology to understand how to make money trading Forex is Long/ Short. If an investor wants to buy, he has to wait for the base currency value to increase so that it can be sold at a higher price. In Forex trade jargon, it is called taking a ‘long position’. When investor wants to sell, the base currency value has to reduce so that it can be bought back at a lower price. This is known as taking a ‘short position’.

Forex robot is software that acts as a personal expert advisor in Forex trading. Their algorithms are built to pick the best currency pairs to trade and the right time for trading. All the user needs to do is set up a trade account and adjust parameters like currency, profit limit, stop loss limit etc. The Robot can be made to carry on trading 24 hours for five days a week when the Forex market is active.

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Trading the Pin Bar reversal – Make money trading forex

admin — Tue, 23 Mar 2010 19:26:56 +0000

www.learntotradethemarket.com Trading the Pin Bar reversal – Make money trading forex

Make Money Trading Currencies – What Are the Basic Tricks?

admin — Mon, 15 Mar 2010 19:48:16 +0000

The Forex market is a place where investors can make money trading currencies. A forex market functions on similar lines to those of the stock market. For those who are already experienced in stock trading, Forex trading would be a very similar experience.

By understanding how the Forex market functions and some of the basic tricks of the Forex trade, it is possible to easily make money trading currencies. Buying and selling of currencies in pairs is the prime trade that happens in the Forex market. One currency is exchanged for another. When the value of the bought currency goes up in comparison to the one sold, a profit is made. Some important terminology used in the Forex market includes exchange rate, Forex quote and Long/ Short.

To make money trading currencies, the first step is to get accustomed to the jargon used in the Forex trade. Exchange Rate is nothing but the ratio of the value one currency vis-à-vis value of another currency. The two currencies are referred to as a currency pair.

For instance, a USD/GBP exchange rate can be read as how many US dollars will be needed to purchase one Great Britain Pound or how many Great Britain Pounds are required to purchase one US dollar. To make money trading currencies, understanding this with an example would be apt. GBP/USD = 1.25 is a typical Forex quote. In this, the first currency is referred to as the Base currency. The second currency is known as the Quote currency or Counter currency.

When an investor buys currency, the exchange rate gives how many units of the quote currency is needed to buy one unit of the base currency. In the sample above, the investor needs 1.25 US dollars in order to buy one single Great Britain Pound. The exchange rate is interpreted slightly differently while selling – that is how many units of quote currency can be acquired by selling a single unit of base currency. In the above example, the Forex trader can get 1.25 dollars by selling one British pound.

The base currency is the primary factor that decides whether an investor buys or sells. To make money trading currencies, one has to decide to buy or sell. For this the long/ short position has to be analysed. To buy, the base currency value has to rise (long position) and to sell the base currency value has to fall (short position).

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