Online Forex Currency Exchange Trading FAQs

What Is Foreign Exchange?

The Foreign Exchange trading market, also referred to as the "Forex" market, is the largest financial market in the world, with a daily average turnover of approximately US$1.3 trillion. Forex is the simultaneous buying of one currency and selling of another. The world's currencies are on a floating exchange rate and are always traded in pairs, for example EURO/USD or USD/CHF.

Who Are The Participants In The FX Market?

The Forex market is called an 'Interbank' market due to the fact that historically it has been dominated by banks, including central banks, commercial banks, and investment banks. However, the percentage of other market participants is rapidly growing, and now includes large multinational corporations, global money managers, registered dealers, international money brokers, futures and options traders, and private speculators.

What Is Margin?

Margin is required collateral for taking a forex trading position. It allows traders to take on leveraged positions with a fraction of the equity necessary to fund the trade. In the forex market leverage ranges from 1% to 2%, giving investors the high leverage needed to trade actively whereas equity market only provides leverage of 50% (double the buying power).

What Are Commissions And Fees charged By MoneyForex?

Unlike many other forex brokers, MoneyForex does not charge any commission in executing a forex trading order. We are a market maker and our major revenue is generated from the spread from currency traded; usually 3 to 5 pips. There is a small cost of holding positions overnight.

What Does It Mean Have A 'Long' Or 'Short' Position?

A long position is one in which a forex trader buys a currency at one price and aims to sell it later at a higher price; the investor is benefiting from a rising market. A short position is one in which the trader sells a currency in anticipation that it will depreciate; the investor is benefiting from a declining market. The risk of having either long or short position will be the same.

How Do I Manage Risk?

The most common risk management tools in forex online trading are the limit order and the stop loss order. A limit order places restriction on the maximum price to be paid or the minimum price to be received. A stop loss order ensures a particular position is automatically liquidated at a predetermined price in order to limit potential losses should the market move against an investor's position. The liquidity of the Forex market ensures that limit order and stop loss orders can be easily executed.

A Forex Trading Plan: Limit Your Greed and Make $53,000 Per Month After Two Years

The title of this article resembles the seductive sentences you see a lot on scam and phishy or HYIP and Ponzi scheme websites. Please don’t get me wrong. I am not trying to refer you to one of these programs. I want to talk about one of the most important reasons of forex traders’ failure and show you a good way to overcome it.

I don’t know how long you have been trading forex, but you can be among those traders who have been trying to make a living or at least a supplementary income through forex trading, but have not been successful so far. There are a lot of people who have spent several years to learn forex. They have tried so many systems and strategies but they still lose. They still think that they have not found a good system and their problem is that they don’t have a good trading strategy , but they are wrong. They have had several good systems but they have not been able to make those systems work and make money for them. They know much more than what they should know to be a profitable trader, but they still read and learn more and more and still they think that they have not learned enough.

GREED is the most important reason of their failure. They have not been able to become a profitable forex trader because they are greedy. Because they are not even aware of their greed. It controls them and pushes them to overtrade and take wrong positions, but they don’t know. Greed is a normal emotion that everybody has. If you have not been greedy so far and if you think you are not greedy, just trade forex and see how greedy you are. This is normal. Everybody likes to work less and make more. Everybody likes to become a multi-millionaire or multi-billionaire within the shortest time but the problem is this strong desire can not only prevent you from getting rich, but it doesn’t even let you become a profitable forex trader who is able to make a steady small income every month.

The problem is that sometimes we don’t know what greed is, what it does and how it works. If you overtrade; if you take positions when there is no strong and sharp signal; if you take the position while it is too late and you should wait for another trade setup; if you push yourself to trade every day and when you don’t find a trade setup one day you feel angry, guilty and uncomfortable; if you try to double or triple your account within the shortest time; if you get furious when you see you have missed a good trade setup; if you take too much risk and trade more than 2-4% of your account; if you don’t close a wrong position as soon as you are realized that it was a mistake; if you follow several trading systems and strategies because you want to have as many trade setups as possible every day; if you still look for e-books and articles every day and you read them and follow and try their directions and you are not happy with what you have learned; if you like to trade with small time frames to have more trade setups; if you set a big pip or monetary goal for yourself and you get upset when you can not achieve it… THEN you are not able to control your greed.

I don’t say you are greedy. I say you are not able to control your greed. Because everybody is greedy. The difference is some people are able to control their greed and some people are not.

Now let me share something that I shared with members of Forexoma Live Market Analysis today. Then I will tell you what to do to become able to control your greed and become a profitable forex trader. Please read the below paragraphs to see what made me talk about greed:

Last Friday daily candlesticks had formed a very strong sell signal with several currency pairs including NZD-USD which had the best trade setup, but unfortunately market was opened on Sunday afternoon with a big gap, almost in all of the currency pairs that had already formed a trade setup. Usually when market opens with a gap, it is used to go against the gap direction and fill it because those traders who already had a position from the last week, when they see they are in a big profit because of the gap, they get overwhelmed and close their positions to collect their profit and so price goes to the other direction right after the market open. But last night it didn’t fill the gap and kept on going down. In these cases, I just call it bad luck and then forget about it and wait for another trade setup. I never enter if I am late. If I can enter on time and with the price that I should enter, I do it, otherwise I ignore the trade. This is a very important aspect of discipline that a trader should have. Our greed pushes us to enter even when it is too late. I know it is a pain to see a good and a strong trade setup runs away from you while you are not on board, but this is part of the game too. We can not catch all the movements.

I read somewhere that a trader said he preferred to be late than wrong. But I think being late can be as risky as being wrong. So I prefer to be right and on time than wrong or late.

Maybe many of you, have been trying forex for several months or even a few or few years but have not been profitable so far. You make some profit every now and then and lose it with some bad trades. Let me share a million dollar secret now. It is the right time to do it.

You will become profitable only when you become able to control your greed. You should be able to ignore some positions and signal that don’t look good and strong or you are late and it is not safe to enter. If you review your memory, you will see that most of the bad positions you have taken are because you have not picked a strong signal or because you had missed a strong signal but you pushed yourself to enter and make some profit and get out. But they went against you right after you entered. Maybe they have been waiting for you to enter to change their direction. Sometimes it really looks like that a position has been waiting for you to enter and right when you clicked on buy or sell button, it changed its direction. It is because you are late or you have picked a poor signal.

Being late or picking a poor signal is because of nothing but greed. You can not ignore the money that it may make for you. So you take it. When it comes to trading, everybody becomes greedy. Please don’t get me wrong. I am not criticizing you. This is normal. Everybody likes to work less and make more. I knew myself as someone who could be everything but greedy. But when I started trading, I discovered my greed. It showed up. It is hard to know it first. You have no idea. It pushes and controls you but you don’t feel it. You are not aware of its presence. You will become a profitable trader only when you know it and become able to control it.

This was all I told them.

What is the solution?

The other problem with greed is that it covers your eyes and doesn’t let you see the bigger picture. You think, to become rich, you should have a $100,000 account and double it every month and as you can not afford to have such an account, you try to double or triple your $5000 account every week to reach to that level but you wipe out your account every month. This is your greed that doesn’t let you sit and calculate and see how much money you could make if you just would be patient and happy with a small amount of profit every month and what account size you would need to become rich in a short time. I have done this for you. Probably you have seen it on the July first week performance report but here I have done it differently and more precisely. I have created a spreadsheet for you that helps see your future. Click here to download the Excel spreadsheet. I have called it Forexoma $1000 Forex Plan.

Enter your account size in the primary account size cell. I have entered $1000 as an example. In the “profit per month” cell, enter 25 which means 25% profit per month (I have already entered it). After you press enter, it calculates the monthly profit you can make.

So, if you start with a $1000 account and you make only 25% profit every month and you don’t withdraw any money for 24 months, you will have a $211,758.24 account and you can make $52,939.56 per month after 24 months or two years.



It is unbelievable, isn’t it? But it is true. You could never imagine that a $1000 account could be changed to such a huge wealth. Please note that to make such an income, you don’t have to triple your account every month. You should only make 25% per month which is extremely easy.

Now try it with different amounts of primary account size and profit per month values and for example see that if you start with a $2000 account and the same 25% profit per month, you will make $105,879.12 per month, after 24 months. Try it yourself and see.

What does this Forexoma $1000 Forex Plan have to do with controlling your greed?

When you see how much money you can make with a $1000 account and making only 25% profit per month, you will not overtrade, you will not try to triple your account every month, you will not trade poor and weak signals, you will not follow several different trading systems at the same time, you will not take too much risk, you will not… and so you will not wipe out your account and you will become a profitable trader. You will know that there is no rush. You have enough time. You can wait for the best trade setups. You will not take any position. You will take the best ones. This is how your greed can be controlled. Do you agree?

Members login: Forgot your password? When You Will Be A Professional Fo

I received a comment on the December 24 report from a gentleman, Sambhunath, that made me write and post this article. Sambhunath says,

” While moving around aimlessly in the internet, I have chanced to come across your site. It appeared so attractive that I have gone through as many pages as I could and finally come to the conclusion that I must visit this site regularly.

As for myself, I am relatively new in the field of currency-trading. I had read a lot of e-books and practiced my acquired skills in some demo-accounts. Enthused by consecutive and relatively consistent success I started to believe that I had mastered all the skills necessary to become a successful currency trader. I then opened a real account with all the savings I had and started my real journey. The consequence of my endeavor proved to be fatal !!!!

I have lost all my money. I do not understand why for some days I remain puzzled and behave most irrationally and lost my all.

This blow has proved to be an eye-opener. I have realized that my knowledge about both the market and about myself is far from satisfactory. I am yet to learn a lot before even thinking of playing with real money. I have to learn everything afresh from a real master. I still believe that I can learn the subject and in course of time I must be a successful trader.

I have wrote so many things just for the new-comers. This is not just as it appears. It is purely a game of applied psychology- controlling impulses of fear and greed- applying earned knowledge judiciously.

I cannot sufficiently express how happy I am meeting you. You are the person I am looking after.

You have started an excellent work. Countless people around the world will remain thankful to you for ever. “

I appreciate his kindness and I am happy that my efforts could be any of help. Unfortunately, this happens to more than 95% of the beginners and he is not alone. Something that changes a beginner to a professional trader should happen after this stage but unfortunately 99% of those who come through this stage, give up and never think about forex or any other kind of investment and trading. They will complain that they are not for trading and they can not become traders.

I have explained in one of my other articles that you have to have three things to become a good and successful trader:

1. Knowledge
2. Experience
3. Suitable mental and psychological condition

If you lose your money as soon as you start working with the real account you should ask yourself that “Do I have enough knowledge? Do I have enough experience? Am I mentally and psychologically ready to trade with my money?”

If you answered no to any of the above questions, you should not trade with the real account.

You can learn everything about forex trading through the internet. Internet is full of free and invaluable information about forex. There are also free videos that you can watch and learn a lot. They all talk about trends, patterns, indicators, candle sticks, fundamentals and … and you can learn all of them word by word.

Then you sign up for a demo account and start trading. Sometimes your first trades are very good and it deceives you that you have learned everything and now you can trade with real money but you don’t know that forex market is like an ocean. Sometimes it is calm. Sometimes it is stormy and sometimes there is a Tsunami because of an earthquake. Someone who has experienced sailing when the ocean has been calm may think that he is a sailor but he is not aware that the storm is on the way and he is not experienced enough to face a real storm. He goes to ocean and becomes trapped by the storm.

Beginners should keep in their mind that a few successful trades with the demo account doesn’t mean that they are good traders and a few successful trades with the real account, doesn’t mean that they can increase the amount of the trades.

Beginners have to keep on trading with the demo at least for few months. The other thing is that they have to have a system. Trading with the demo account without an especial and well-described system is wasting of time. You have to know what kind of signals you should be waiting for before you buy and sell and you should know that you only buy and sell when you see the signals not when you think that you are seeing the signals. Like waiting behind the red light. You start moving only when you see the green light.

So you have to trade with the demo account at least for few months. You have to learn to get stuck to your system. You have to learn to control your emotions. You have to learn to control your fear and greed before you start working with real money.

Unfortunately some greedy brokers push the beginners to open real accounts. They are not smart enough to understand that they have to have long term traders not one day traders. Most beginners who lose their money, will never reload their accounts and so the brokers will lose them for good.

When you work with the demo account for few months, you feel a confidence in your heart. This confidence is not a false confidence because it is gained through practicing and experiencing. If you don’t feel a true confidence, keep on practicing with the demo account. It doesn’t matter for how long. One year or even two years. Nobody has determined a deadline for you. So don’t rush. The market is always there waiting for your money.

Then open a real account but please note that after opening a real account, you are at the BEGINNING of a new stage. Yes! Working with the real account is different from the demo account.

Why? Are the signals, charts, indicators, currency pairs and … different?

Absolutely not. They are all the same but something that is different is that you know that you are playing with your real money. The money that you have been working to the bone to collect. You don’t like to lose it. You want to increase it.

What will happen then?

You trade with more fear and greed. You don’t close the trade that goes against you because you don’t want to lose. You wait for the price to change the direction but it won’t and finally you decide to close your trade when you have lost a lot.

Or you keep a good trade to make more profit. You ignore the reversal signals and so you lose all the profit you had in your hand.

Sounds familiar, doesn’t it? :)

So what should you do?

1. Start learning first and complete your knowledge. Learn everything that you should know about the trends, patterns, support, resistance, candle sticks, reversal and continuation signals and … . There are a lot of websites that have these information for free. You have to spend at least three months to learn all these things.

2. Decide that if you want to be a swing trader or an intraday trader. As a beginner you should choose one of them because you have to be focused on one thing first.

3. Choose a system (strategy). Your system should be as simple as possible. Complicated systems are not applicable. You can only lose with them. A System should be as easy as 1, 2, 3. Also choose a system that works according to technique and knowledge not according to superstitions. In an e-book I read about a strategy that says you should buy when you see the price has gone up for 80 pips before noon!!!

4. Start trading with the demo account using the system you have chosen. If you see that you don’t like your system or it is not good, change it. Find a better and simpler system. Get stuck to it and test it over and over and over. Spend several months to one year with the demo account. Do not be fooled by some of the forums members who say “I have started working on forex two months ago and now I make 100 pips everyday”. This is not true.

5. Forget that the account you are working with it is a demo account. Consider it as a real account. When you see you are losing, think that it is your REAL money that is burning. And when you see that you are making profit think that it is going to your real bank account. Keep in your mind that if you rush and trade emotionally you lose your money. This will help you to experience your fear and greed before trading with the real account. If you experience them, you will learn to control them. Don’t let them show themselves right when you start trading with your real money.

6. Then start working with a real account BUT trade with a very very small amount of money. I don’t care if you have a $500k account or a $100 account. Start trading with the minimum amount that you can place an order. Keep on working with this amount of money for a few weeks. If you saw that you are trading exactly like when you have been trading with the demo account, increase the amount of the money gradually. Do not play with a huge amount of money after a few successful trades.

7. Don’t give up! Don’t get disappointed when you lose. Everybody loses at the beginning. Even the best traders lose in some of their trades. Learn from your mistakes. Keep in your mind that losing is part of the game. We do not practice to learn not to lose. We practice to learn how to lose small amounts and win big amounts. Your stop loss will be triggered in some cases. This is natural. It should not prevent you from entering to another trade.

If you work in the way I explained above, you will become a professional trader in about one year without losing your money and without having to reload your account.

Happy trading :)

Trading Only With Moving Average

At the moment I am rather busy. Moving to a new place and house. The house still needs a lot of work. As a result, I do not have time to update this blog. Trading is still going on but on a shorter timeframe. Result is consistent now. AudUsd is very kind at the moment with no sudden movement.

In the next few weeks I will show you how to trade using only MA. As usual what works for me may not work for you. This is because some of you may not be able to follow the rules of the game.

RULES OF THE GAME
1. Trade based on your capital and the time that you have. The bigger your capital the longer the TF. The more time you have the longer the TF. Vice versa.

2. Only trade at the direction pointed by the MA pairs. If the MA pairs is showing mixed direction, do not trade. The MA pairs must be pointing at the same direction.

3. If a trade suddenly change direction, do not hesitate to close it at a loss and turn the trade. This is the hardest part where most of you failed. Free your mind or become a loser all your life.

4. Keep in mind, there is no such thing as winning all the time. Just make sure you win a lot more than you lose. In the end your profit will grow along with your confident.

Simple system with simple rules. I like to keep it simple. No point of having the most complex system when simple system can have the same result. With this system you will be out of the market most of the time. This is because you will only be taking the big move and avoiding the small move and market noise.

Last advise. Do not anticipate. Forex is not a game of inteligence eventhough this system at full swing will show you possible turning point. I am having a possible turning point for audusd at 0.7200 but I will not take it coz there will be market swing before the actual turn. Why wast time waiting for the big move when you can actually see when its going to move.

In the mean time, good luck for all of you. I will be back once my pc is online again. At the moment I am posting this on a laptop. I dont like laptop, too small keypad, makes it hard to do speed typing.

Forex Trading Analysis: Does it Really Work and How

Forex Trading Analysis: Does it Really Work and How?
By: Hillel Ful............I Will recommend first you forex forex forex forex forex forex forex forex forex forex forex forex forex=changed the course Of your Life...........


dWhen it comes to Forex trading, the million dollar question occupying all traders across the globe is how to best predict future movements of the market. Now, before we proceed, it is very important and crucial to emphasize the point that there really is no one way that can predict what will happen in the market with 100% certainty and accuracy. Having said that, there are various ways to analyze the Forex market and draw conclusions about the different currencies, both in the short and long term periods. The two primary methods are what are known as technical and fundamental analysis. Just as there is no one method to predict what will transpire in the market, so too there is no absolute answer to the question which is better, technical or fundamental analysis. Many experts, who base their trading on technical analysis of the market, might tell you it is the ultimate method, and vice versa. So how do you determine what is right for you? Before we discuss the ins and outs of the technical and fundamental schools of thought, it is important to understand one point. The best option is obviously to try and incorporate both types of analysis in your day to day trading. If you could take the best of both worlds and implement the principles properly, you are going to see the best results. However, most traders cannot focus equally on technical and fundamental analysis, so they do need to eventually choose which will be their primary method of market analysis. Fundamental: “Forex fundamental analysis is a method of forecasting the future price movements of a financial instrument based on economic, political, environmental, and other relevant factors, as well as statistics that will affect the basic supply and demand of whatever underlies the financial instrument.” Fundamental analysis is a more traditional tool than its competition, it has always been around, it was just referred to differently. Fundamental analysis means exactly as it sounds. You draw your market conclusions based on the fundamental principles driving the currencies. This can include the political developments of the country at hand. It will almost always include the economic happenings, and might even include environmental factors. Fundamental analysis is based on the premise that where one currency or another will go is not random, and if we know the “action”, we are sure to be able to predict the “reaction”. Fundamental analysts will therefore trade with their eyes glued to the news, and will pay much less attention to what their currency did in the past. They will identify and quantify factors that determine the intrinsic value of a currency based on its supply and demand. If the supply is on the decrease and the demand increasing or staying the same, the value of the currency will obviously rise, and vice versa. To just give a more concrete example, a Forex fundamental analyst will study the level of supply and demand of a given country’s currency, as well as its export and import numbers, its government stability and popularity, as well as the countries economic indicators. Based on all those factors and more, the analyst will draw certain conclusions about the strength of that currency and whether it is a wise investment for the average trader. This is obviously a very thorough way of analyzing the market and is sure to see accurate results. The big question is, can everyone be a professional fundamental analyst or does it require vast knowledge in numerous complex issues? Advantages:
Thorough and comprehensive
Relatively simple to decipher the relevant information Disadvantages:
Endless information to analyze
Difficulty in measuring the relationships among the variables, how much attention should be paid to the political arena, as opposed to the economic or environmental? Technical “Forex technical analysis is a method of predicting price movements and future market trends by studying charts of past market action, which take into account price of instruments, volume of trading, and, where applicable, open interest in the instruments.” Technical analysis is a much more scientific and objective method of analyzing the market. Before we get into the details of technical analysis, we should say that the basic and most elementary principle upon which all technical analysis is based is the sentence “The trend is your friend”. Technical analysts do not dispute that there are forces that drive the Forex market, they just add another factor that fundamental analysts do not hold by. Technical analysis is based on the concept that what was yesterday paints a clear picture of what will be tomorrow. Technical analysts will not have the news open while they trade, instead, they will pay close attention to the daily, weekly, and monthly charts. If there is a pattern to be found in the charts, technical analysts will find it. Technical analysis has the advantage of focusing on one or two charts and analyzing them, whereas fundamental analysts have to consume and analyze tremendous amounts of complicated data, and there is no indication what types of information are more important than others. When it comes to technical analysis, there are 3 underlying principles:
Although many factors affect the market and its currencies, including politics and economics, when it comes to technical analysis, the driving forces are irrelevant. What is important are the movements of the currencies themselves and not the reasons behind them.
As I stated above, technical analysts will claim that if you look long and hard enough at the charts, you will notice a trend, or a certain pattern. Follow that trend, and you will come out on top.
Trends are based on human psychology of how people trade the market, and will therefore continue. To simplify the concept of technical analysis, we will say that it involves the gathering of historical data (there is over 100 years of recorded data in the Forex market), inputting it into a computer, which then searches the data for a pattern, later displaying it in graphical format. OK, so we have concluded that technical analysis is a more focused and defined method of analyzing the market, but that does not answer the question, is it a more accurate method? Advantages:
Enables you to focus on one topic or chart and not analyze tremendous amounts of complicated data. .............I Will recommend first you forex forex forex forex forex forex forex forex forex forex forex =Changed the course Of your Life.......... Clear definitions of what information is the most crucial.
Most trading platforms have built in technical analysis tools.Disadvantages:
Technical analysis completely ignores the driving force behind the currencies.
The information is sometimes presented in a highly technical (hence the name) fashion making it hard to comprehend. There is no one answer to the questions we have posed, but in order to cover your tracks, it is recommended to trade the Forex market making use of both methods, which each, as we have seen, have their own advantages and disadvantages. ...........I Wil recommend first forex forex forex forex forex forex forex forex forex forex forex forex forex = Changed the course Of your Life

Forex Trading Tip - Be Flexible

Forex traders get into trouble when they are rigid in their beliefs.

The problem for inflexible minded traders is that the markets they trade aren't rigid. They do trend, but they can turn the other direction leaving a rigid trader with a hard decision to make... To stay and hope the market will rebound or to get out and cut loses short.

Part of this stubbornness in a trader is the obsession to always be right no matter that the evidence proves they are wrong. Such a trader may even know they are wrong but still insist otherwise. They have a hard time admitting defeat and don't want to lose face.

Until something catastrophic happens, for example getting a margin call, these rigid thinking traders will not change their set in stone beliefs.

You may be one of these traders and don't even realize it. Having to be right just overcomes your ability to think clearly. Rigid thinking prevents you from taking corrective action on your trades so you can cut your losses and be ready for another opportunity, whether it's reversing directions from long to short.

Be determined not to have a rigid view of the markets. Being flexible in your thinking is better than being right about the direction of the market. They say the market doesn't care what you think. It doesn't matter if thousands of other traders agree with your view... The market decides which direction it will go.

The only belief you should hold is that you must be flexible and adapt to change.

Copyright © 2009 L Chan

Want a solid foundation to build upon your Forex trading success? Discover the insider information you need to trade the Forex market with confidence. Visit http://www.ForexTradingBasicsGuide.com and take the first step to becoming a winning Forex trader.

The Use of Requote in the Forex Market

The Forex market holds the largest financial market trading in the world. There are more than $3 trillion value trades per day. Did you know that everyone plays a vital role in the trade of currency? Being a citizen of your country that has a currency automatically makes you as an investor of your countries currency. You decide whether you will hold on with the currency of your country or you want to trade it to other foreign currency. Currency trading is done at the Foreign Exchange market otherwise known as Forex or simply FX market.

The Forex market operates in a global electronic network which consists of financial institutions, banks and Forex traders which all involved in buying and selling national currencies. Unlike the stock exchange, the Forex market does not have any central location instead it involves an inter-bank system of trading. The Forex market transactions are done in real time which operates 24 hours a day. With a colossal number of traders around the world, the Forex is the busiest trading market in the world. Trades are made over an electronic network worldwide or by telephone. Sydney, London, Tokyo, New York and Frankfurt are the main centers of trading.

During the earlier years of the Forex market, access to trading was only made available for large business institutions and banks but later was made available for individual Forex traders and money managers. Traditionally, access to the Forex market has been made available only to banks and other large financial institutions. However, with advances in technology over the years along with the industry's high leverage options, the Forex market is now available to money managers and individual Forex traders. This was made possible through the use of computers and internet connection. Currency trading is basically instantaneous buying and selling of one currency to another. Example of trade are; Euro – US Dollar, GB Pound – Japanese Yen. This process is called cross trading.

Another type of trading which can be done is in the spot market which involves the largest volume and the most important trading in the Forex market. These trades are done on the spot which means that it doesn’t take two banking days. There are many advantages in trading in the Forex market compared to other trading systems. The major advantage is that trades can be made 24 hours a day which allows traders to immediately decide and react on breaking news which greatly affects the market price. Another great advantage for investors is that trades which are done in the Forex market do not charge any commission. With the Forex market there are always opportunities to gain a profit. Currencies sometimes weaken and sometimes strengthen. When you trade currencies, they exactly work against each other. For example, if you think that the Euro will decline against the US Dollar or vice versa, you would sell your Euro and later buy Euro again at lower price to earn a profit.

However requotes occur which may lead to decrease of profit and even lose of your investment. Requotes happen when a broker quotes one price but then quotes another. Brokers might even fill your order at a different price commonly higher when you attempt to trade. So before investing your money, make sure to check the policy of the broker regarding requotes.

How to Calculate Rollover Interest?

In the Foreign Exchange Market or Forex market, Rollover is a method of stretching the arranged clearing date or what is known as the settlement date of an open position. Mostly, in common currency trades, trades ought to be completed in two business days and traders who wish to stretch their positions with no intention of settlement must close their positions before 5:00 in the afternoon Eastern Standard Time on the date of settlement day, plus re-opening of them the next trading day. This means by rolling over the position, this at the same time closes the existing positions at the daily close rate and again coming into a new opening rate at the next trading day. This precisely means that the trader is indirectly extending the settlement day by one more day.

This is also known as tomorrow next strategy, it is functional in forex due to many traders have no purpose of getting delivery of the currency they buy but instead they have the intention of getting profit from fluctuating exchange rates. Since rollovers shove out the settlement by another two trading days, it may cause a gain or a cost to the trader depending on the existing rates.

Apparently, Rollover is when you reinvest funds from a mature security into a new issue of the similar security or same security. You are transferring the holdings of one retirement plan to another without the agony of tax effects. Plus a charge is incurred by Forex investors who extend their positions on the following delivery date.

Rollover interest is the net effect of the money borrowed by an investor to purchase another currency and such interest is paid on the borrowed currency and earned on the purchased currency. To calculate this interest, you should get the short-term interest rates on both currencies, the existing exchange rate of the currency pair and the number of the currency pair purchased. For instance, an investor possesses 15,000 CAD/USD. The present rate is 0.9155, the short term interest rate on the Canadian dollar (base currency) is 4.50% plus the short term interest on the US dollar (quoted currency) is 3.75%, so the interest would be $33.66 [{15,000 x (4.50% - 3.75%)} / (365 x 0.9155)].

If on the contrary, the short term interest rate on the base currency is lower than the short term interest rate of the borrowed currency, the interest rate would result into a negative number which may reduce the value of the investor’s account. Such interest can be avoided by taking a closed position on the currency pair. If an option is about to expire is quite favorable to grip, you can either buy or sell the later expiring option. Always note the interest rate that is paid by a currency trader or he may received in the course of these forex trades is considered by the IRS as ordinary interest income or expense. For taxation, the trader of the currency should always keep track the interest received or paid, separate from regular trading gains or losses.

Why the Forex?

Money Trader? Every successful trader needs a great set of tools to help them make money when trading the markets. The tools that we offer MTI can be used effectively to trade and make money in any market. As you have heard it said, a chart is a chart is a chart. If you will take the time to look around our site and take us up on our free trial offer to our services, you will soon see the value of the knowledge that we are willing to share with you.
More Bang for YourTrading Dollar!
You may ask yourself, Why would I want to trade the FOREX?....The answer is simple, its called leverage. Frankly no market can provide you the leverage that the FOReign EXchange or FOREX can. You can effectively use US$1000 to control US$100,000. No secret formulas, no smoke and mirrors and no Indian chants, just a sound application of technical analysis coupled with a logical money management strategy. We can't guarantee that every trade will be a winner and you wouldn't believe us if we did, but we can say that consistently applying the right methodology can produce profits over the long haul. Leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains.

FOREX Traders buy & sell currency lots.
To control 1 currency lot the trader will need US $1,000 in margin
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When the price of 1 lot moves 1 point it makes approximately US $1,000. When it moves 2 points it makes US$2,000. When it moves 5 points it makes US $5,000 and so on, all from the original amount of US$1,000 invested.

1 point move is divided into PIPS. Like US$1.00 has 100 pennies.

Currency Traders are trying to capture PIPS. 1 PIP is approximately equal to US $10.

To get started trading all you need is a minimum of $300.00 in a trading account.

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