What is Forex Trading

What is Forex Trading

Overview

Forex, FX, or Foreign Exchange, is the simultaneous exchange of one country's currency for that of another. speculate on the exchange rate between two currencies. In doing so, speculators purchase or sell one currency for another with the hope of making a profit when the value of the currencies changes in favor of the speculator as a result of events that takes place across the globe. This market of exchange has more daily volume - both buyers and sellers - than any other market in the world. The FX market is available 24-hours a day, five days a week. Furthermore, the Forex Market is the largest financial market in the world with daily reported volume of over $1.4 trillion changing hands between buyers and sellers across the globe, making it one of the most exciting markets for trading. Although currency trading is inherently governmental (central banks) and institutional (commercial and investment banks), technological innovations, like the internet, have made it easy for individuals to take part in the currency trading markets and to trade via intermediaries online

Elliott Wave Theory

Elliott Wave Theory

Back in the old school days during the 1920-30s, there was this mad genius named Ralph Nelson Elliott. Elliott discovered that stock markets, thought to behave in a somewhat chaotic manner, actually, did not.

They traded in repetitive cycles, which he pointed out were the emotions of investors and traders caused by outside influences (ahem, CNBC) or the predominant psychology of the masses at the time.

Elliott explained that the upward and downward swings of the mass psychology always showed up in the same repetitive patterns, which were then divided into patterns he called "waves". He needed to claim this observation and so he came up with a super original name: The Elliott Wave Theory.

The 5 – 3 Wave Patterns

Mr. Elliott showed that a trending market moves in what he calls a 5-3 wave pattern. The first

5-wave pattern is called impulse waves and the last 3-wave pattern is called corrective waves

Here is a short description of what happens during each wave. I am going to use stocks for my example since stocks is what Mr. Elliott used but it really doesn’t matter what it is. It can easily be currencies, bonds, gold, oil, or Tickle Me Elmo dolls. The important thing is the Elliott Wave Theory can also be applied to the foreign exchange market.

Wave 1 The stock makes its initial move upwards. This is usually caused by a relatively small number of people that all of the sudden (for a variety of reasons real or imagined) feel that the price of the stock is cheap so it’s a perfect time to buy. This causes the price to rise.

Wave 2 At this point enough people who were in the original wave consider the stock overvalued and take profits. This causes the stock to go down. However, the stock will not make it to its previous lows before the stock is considered a bargain again.

Wave 3 This is usually the longest and strongest wave. The stock has caught the attention of the mass public. More people find out about the stock and want to buy it. This causes the stock’s price to go higher and higher. This wave usually exceeds the high created at the end of wave 1.

Wave 4 People take profits because the stock is considered expensive again. This wave tends to be weak because there are usually more people that are still bullish on the stock and are waiting to “buy on the dips”.

Wave 5 This is the point that most people get on the stock, and is most driven by hysteria. You usually start seeing the CEO of the company on the front page of major magazines as the Person of the Year. People start coming up with ridiculous reasons to buy the stock and try to choke you when you disagree with them. This is when the stock becomes the most overpriced. Contrarians start shorting the stock which starts the ABC pattern.

The 5-wave trends are then corrected and reversed by 3-wave countertrends. Letters are used instead of numbers to track the correction. Check out this example of smokin’ hot 3-wave corrective wave pattern!

Just because I’ve been using a bull market as my primary example doesn’t mean the Elliott

Wave theory doesn’t work on bear markets. The same 5 – 3 wave pattern can look like this:

Waves within a Wave

The other important thing you have to know about the Elliot Wave Theory is that a wave is made of sub-waves? Huh? Let me show you another picture. Pictures are great aren't they? Yee-haw!

Do you see how Wave 1 is made up of a smaller 5-wave impulse pattern and Wave 2 is made up of smaller 3-wave corrective pattern? Each wave is always comprised of smaller wave patterns.

As you can see, waves aren’t shaped perfectly in real life. You’ll also learn its sometimes difficult to label waves. But the more you stare at charts the better you’ll get.

Okay, that’s all you need to know about the Elliott Wave Theory. Remember the market moves in waves. Now when you hear somebody say “Wave 2 is complete.” You’ll know what the heck he is talking about.

Summary

According to the Elliott Wave Theory, the market moves in repetitive patterns called waves.

A trending market moves in a 5-3 wave pattern. The first 5-wave pattern are called impulse waves. The second 3-wave pattern are called corrective waves.

If you look hard enough at a chart, you'll see that the market really does move in waves

The Advantages Of Automated Forex Trading

The Advantages Of Automated Forex Trading
An increasing number of people are being drawn to Forex trading in preference to the many other forms of investment available today and it is not hard to see why.
The Forex market is the largest trading market in the world with a steadily growing trading volume which has risen from some $500 billion dollars to $2 trillion in the last twenty years.
It is also an incredibly liquid market which is not tied to any particular trading floor and operates around the clock across the world making it effectively a permanently open market.
As one market closes another is opening and you can effectively follow the markets around the world as you trade and even all but eliminate the fact that the market in your home country will close for the weekend.
It is no wonder therefore that Forex trading attracts a wide and growing variety of both big and small traders each of whom enjoys a wide choice of trading strategies based upon the myriad of factors which affect foreign exchange rates.
For many traders coming into the market it is the fact that there are so many different things that affect currency exchange rates which they find most attractive as it allows them to use a huge range of different tools when working in this extraordinarily exciting market.
Perhaps the greatest influence today however on the future growth of the market and its popularity lies in automation which has never been easier to accomplish and which brings with it many more advantages than disadvantages.
Automated Forex trading allows trades to be conducted in real time anywhere in the world and virtually eliminates the losses so often seen in manual systems which are trying to operate in such a fast moving and volatile environment.
Anyone who has traded using a manual system will know only too well the frustration of a row of losses caused by nothing more than a simple time delay in buying and selling and will appreciate the value of automated currency trading.
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Automatic Forex trading also brings with it the ability to operate in a wide range of different currency markets at the same time without any regard for the time zones of the markets concerned. If you are sitting in the United States at 2 o'clock in the morning then automatic trading allows you to conduct business with traders on the other side of the globe in several different countries all at the same time with ease.
One problem for many traders is that of risk management and this too is reduced as we move to automatic Forex trading.
Manual systems often leave traders nervous about whether or not payment will be made after the completion of a trade but as payments can now be synchronized in real time this is far less likely. Indeed, as the automated trading system continues to develop it is clear that the settlement system will also be updated and such risks are likely to be all but eliminated in the near future.
Computer technology has advanced by leaps and bounds over the past few years and will continue to do so for many years to come. More importantly, access to that technology easily and cheaply from the comfort of our own homes and now the ability to access the best mini Forex fully automated trading means that we can all now manage our own investments with ease. For those in the currency trading world automated Forex day trading will certainly come as a welcome addition to an already great investment vehicle.

How To Make Money In Foreign Exchange

How To Make Money In Foreign Exchange

 The foreign exchange market is an international exchange market in which currencies can be sold and purchased and, while it has been in existence for many years, the foreign exchange market which we see now has been born out of significant changes that took place during the 1970s when floating currencies and free exchange rates were introduced.
There is no 'home' for the foreign exchange market and trading can be carried out from anywhere on the globe, not least using your own home computer.

The trading market is effectively open day and night because as trading is closing in one country trading in another country on the other side of the globe is just opening.

In other words you can trade at whatever time suits you whether that is during the morning or during the night.

You will find that there is always somebody somewhere who is willing to do business with you.
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The key when it comes to making money in foreign exchange trading is to start by getting to grips with the basics of the business and this means finding a high quality forex training course. It is not all that hard to make money with foreign exchange, but you will undoubtedly lose your shirt if you do not know exactly what you are doing

. So, you need to take the time necessary to learn the business before you start and then need to make sure that you spend a little of time working with a dummy trading account before you start trading with your own money.
When you do begin trading start slowly and stay away from the day trading market until you have a bit of experience as this section of the trading market can be very volatile and is influenced by a large number of outside factors.

In addition, set yourself strict trading limits and do not go outside them under any circumstances.

Put another way, never trade with money which you cannot afford to lose because, although you will surely make money, you will also experience your fair share of losing trades while you are getting the hang of things.
And finally, make sure that you are trading with the best forex trading software available and do not be afraid to ask other people for help if you get stuck!

What is day trading? 2

What is day trading? 2

In very simple terms a day trader buys and sells with a very short investment horizon which is typically measured in minutes with trading positions being opened and closed within the same trading day.
Day trading is particularly suited to high volume, volatile markets such as the forex but is certainly not limited to currency trading.
It is for example very commonly seen in the equity markets, although it tends to be seen on the more volatile exchanges such as the NASDAQ, rather than the NYSE or AMEX.
The principle is simply to spot an opportunity and then profit from it quickly getting in and out of the market with just enough time to make your profit and too little time to risk the market turning against you.
For example, you might open a position at 11:00 am and close it out just a few minutes later at 11:07 am to take a small but quick profit and repeat this process as many as a hundred times in a single trading session.
Today this traditional definition has been widened somewhat and we now also refer to the practice of trading from home through an online broker as day trading. And, just to complicate matters, the term 'swing trading' has also started to appear recently to refer to traders with a slightly longer investment horizon of anywhere from one to five days.
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Day trading in its truest form (buying and selling with a very short investment horizon) is a risky business and is not something which you should try unless you know exactly what you are doing as, while it can be very profitable, it can also produce very large losses very quickly.
Although we talk about 'investment horizons' it also needs to be understood that day trading is not the same as investing and you will be working to very short timeframes during which you will need to be glued to your computer screen jumping onto the wave of a trade as it gains momentum and the jumping off as it crests in order to ride the next wave. Spotting the waves as they roll in and knowing just when to jump on and jump off requires both skill and practice.
For those who enjoy the excitement of the roller coaster ride then day trading can be both exciting and profitable but it is not something for the novice forex trader and should only be contemplated once you have cut your teeth in the world of currency trading and gained a fair amount of experience.

learn forex :pivots and the forex

learn forex :pivots and the forex

The Pivot techniques work well in markets with a wide daily trading range, such as the Forex. Pivot lines steers traders away from “no man’s land” and identifies “high activity” areas in which the equity has a high probability of reversal. These areas are important trading zone watched daily by floor traders and computer trading systems.
The levels for the trading ranges and pivots are the support and resistance levels of the market in the next time interval. It is important to note that the predicted levels only give the range in the next time interval.
They do not indicate when the levels will be reached by the currency price action. The pivot is a level at which the underlying asset can be expected to change direction and/or move rapidly away from.

DAILY PIVOT DATA
My pivots program provides not only Pivot, R1, R2, S1, and S2, but also the M1, M2, M3, and M4 points as well. It is common to find many traders calculating only the Pivot, R1, R2, S1, and S2 levels.
In the Forex market, however, you will find my additional points of support and resistance to be very significant indeed. These pivot data points are published daily and is available for access to you once you start the course. The Forexmentor video course also shows you how to calculate the Pivot points using our proprietary Pivot Calculator.
After you have calculated the pivot numbers for the day, place horizontal lines on your 15 minute and 1 hour charts at the pivot numbers for the day, or at least as many lines as your chart has room for. These pivot points will guide your trading throughout the day.

About Forex

About Forex

The Forex market has quickly become the world's largest financial market, with an estimate daily turnover of $3.2 trillion. It is a market that has great appeal to a financial trader because of its volume which guarantees liquidity. High liquidity means that a trader can trade whatever currencies he feels like at all times, since there will always be someone to buy and sell any currency he wants. Another outstanding feature of the forex market is that it is active 24 hours a day and is closed only on the weekends. This means that unlike the stock market for example, traders in the forex market don't need to wait for a bell to ring, but can make trading decisions around the clock.

Enter the internet into the equation. Now the forex market is literally at your fingertips. Most brokers offer online trading facilities which enable you to trade simply by clicking a button, instead of the traditional phone call. The internet has really revolutionized the industry, making the retail section of the market more dominant than ever.
About eToro
eToro is a forex trading platform developed to cater to the emerging retail segment of the forex market. With its simple style and exciting trade visualizations, eToro is the perfect platform for a novice trader to get his first forex trading experience. With its great array of professional forex trading and analysis tools, eToro is also the perfect platform for experts in the field who want to trade comfortably and reliably. eToro has developed a truly intuitive interface that lets traders concentrate on trading instead of messing around with bulky and overcomplicated software.

It's important to mention that eToro also offers an educational experience, so novices can gain knowledge of the forex market and eventually become pros if they're so inclined. eToro offers forex trading guides, forums and video tutorials to facilitate their traders' progress. eToro also offers an unlimited practice mode where both beginner and seasoned traders can sharpen their skills and test their strategies with real market rates.


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The Forex trading industry

The Forex trading industry

With a daily turnover of over $3.2 trillion, as estimated by The Bank of International
Settlement, the Forex market has quickly become the world`s biggest and most liquid
financial market. Nevertheless, it is a market that has up until now allowed very
narrow access to private traders, since it customarily uses terminology and procedures
that can take years to grasp.

About eToro

eToro has developed a cutting edge Forex trading software, catering to novice and
veteran traders alike by way of a user friendly trading interface, and various additional
features that render the vast world of Forex trading accessible to new traders.
eToro`s easy to use platform makes foreign exchange trading almost entirely intuitive,
through its extensive use of trade visualization. eToro`s platform is also designed
to make Forex trading a community oriented experience, with such features as private
and public chats, forums and championships.

eToro`s provision of an opportunity to acquire trading experience by trading for
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it enables them to get their chops without risking any of their money. This way,
novices can get a fundamental understanding of the world of Forex, before they dive
in. Furthermore, eToro makes the learning experience a smooth and painless one,
by replacing the complex charts and lingo that the Forex market is famous for, with
step by step instructions, tutorials, professional support and creative graphic
representations of trading activity.


eToro`s forward thinking approach combines all the advantages of the Forex market,
namely its scale, its liquidity and its extent of opportunity, with all the advantages
of online technology, in order to create a user friendly access to an enormous and
complex industry.

Overall, eToro has produced the ultimate trading environment, where one can learn,
develop, communicate, and grow according to one`s individual needs.

eToro`s Features:
eToro has designed a cornucopia of features that make trading, monitoring, communicating
and staying informed simpler than ever. These features include:


Visual representations: Trades are depicted through various creative representations,
so you can monitor your activity with ease.
Practice mode: Polish your skills by trading with virtual money for live
rates, before putting them to the test.

Competitions: Compete against fellow traders for cash prizes and Forex glory
- with no entry fees.


Chat: Whether it`s Forex or romance, discuss it all with your trader friends
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Trade: Enjoy real time execution with all your trades.

Low Spreads: Save a fortune on eToros super low spreads - as low as 2 pips spread.



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The financial world is now going through some turbulent
times. The global economic crisis has affected markets and economies worldwide and
has rendered the financial markets unstable. The crisis has deepened recently due
to negative investor sentiment. In these critical conditions most investors are
pulling their money out of the falling stock markets and looking for available alternatives
for investment.



Many investors have found this alternative in the forex
market. Unlike other financial markets the forex market literally cannot crash.
This is due to the fact that in the forex market one invests in a currency's value
relatively to another currency. One is always buying and selling at the same time.
Therefore one can profit when one currency weakens against another just as much
as if it were strengthening against the same currency. In fact, the instability
that the global crisis has introduced into the market is considered by many to be
a positive thing. Volatility in the forex market, despite perhaps making it more
risky, also provides greater opportunities for profit. The sharper the swings the
currencies go through against each other, the more forex traders stand to profit.


And because this volatility makes the trades riskier,
forex dealers also provide traders with tools to reduce their risk. Stop Loss orders
are a very commonly used tool in forex traders, because they allow traders to limit
the amount they are risking while their profits remain potentially limitless. One
does not even have to risk the entire amount of their investment. For example, if
one invests $100 on a trade they can place a stop loss order that will close the
trade in case the rate of the currency pair reaches a level that leaves only $50
to take back. This allows traders to protect themselves from unpredictable market
movements while simultaneously allowing them to take advantage of this same market
volatility.


Despite these obvious advantages, some people still hesitate
to start trading forex since they've never tried it before. This is where the eToro
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eToro's educational guides, tutorials and forums also
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Now, more than ever, it's time to give forex trading a shot.
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About eToro

About eToro

eToro is an innovative software that has taken the complex world of forex trading and made it user friendly. Countless online forex providers supply their traders with platforms that are bulky and uncomfortable to use. You'll find yourself spending more time trying to figure out how to set up a simple trade than analyzing the market and deciding what your next trade will be. Using a ground breaking interface, the eToro platform puts all the forex tools your heart desires right at your fingertips. eToro is about providing the ultimate forex trading environment for all traders. Here you will not only find a phenomenal array of forex trading tools but also live streaming news, financial event calendars and an unlimited practice mode with live forex rates for you to test out trading arenas before applying them with real money. eToro also combines forex trading with a web 2.0 community centered approach. eToro have created a thriving forex community around public and private chats and forums, that enables you to discuss forex with peers from around the globe, and you can even monitor the most popular pairs traded by eToro’s top 100 ranked traders, and utilize their experience to your advantage !



eToro`s Features:
Traders at eToro enjoy:
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Community experience – connect with you fellow traders using public and private chats and forums
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