Online FOREX Trading - Become a Successful Forex Trader in Two Weeks! by sacha tarkovsky

One of the most inspiring stories I ever read, was how legendary trader Richard Dennis taught 14 people who had never traded before, to trade successfully in just two weeks.The result?They traded and went on to make millions and become some of the most famous traders of all time.So how was it done and can you do the same? Let\'s find out.Richard Dennis taught them three major points:1. A simple method they could have confidence in.2. Money management. 3. Applying the method with discipline.His advice was very specific with no filler.So, let\'s look at what you need to learn.1. MethodYou need a method you have confidence in and it needs to be simple.There is no correlation between how complicated a method is and how much money it makes.In fact, the reverse is true.A complicated method has more components to break and is less robust in the face of brutal market conditions.Look up "technical analysis" on the net and learn specifically how and why it works and also the theory of "trading breakouts"You should be using a long term trend following methodology looking for the big trends that produce the big profits and breakout trading is ideal for this.If you want to win at online forex trading, you need to know about breakouts.Base your methodology on it - It\'s simple and it works.Now you need to time entries.Look at some indicators that are based on momentum and look up "stochastics" this is simply the best momentum indicator you can use.2. Money ManagementIf you start with a "breakout method" and base your trading method on it, then stop placement is obvious.If you only trade significant breaks your odds of success will be high.3. DisciplineIs perhaps the hardest part of trading online forex.You need to apply your method with rigid discipline otherwise you have no method at all.Discipline is all about experience and even seasoned traders find it hard to keep executing a method when a string of losses occur.However, you are part of the way there to having discipline, if you have devised your own method.You know its logic and should be able to stay with it as you will have confidence in it to work.All the material you need to get up and running is free and on the internet, but it\'s worth reading a few books.These are my favorites and will they inspire you.1. Market Wizards and The New Market Wizards ( edit )By Jack Shwager.These are interviews with some of the top traders of all time including:Richard Dennis and the turtles and many more - Packed with insight and very inspiring.2. Trader VicBy Victor Sperandeo.A true trading legend, who shares with us his thoughts on trading, money management and trading psychology, a fantastic all round book.By all means read a few more, but these three are my favorites from over 500 I have read.Trading is Simple, yet people try and complicate it.They think the more effort they put in the more they will get out - This is totally false.Work smart not hard!If you want to make money you need to work smart not hard and if you want a perfect example of this look at the turtles!In just two weeks they all became great traders.Maybe, you wont make as much money as them, but if you learn and do the above, you will have the basic platform to make big profits in online forex trading.Finally, you will have done it all on your own and will have given yourself success, how satisfying is that?

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EVOLUTION OF A TRADER

Every Trader goes through the following stages of evolution:1) Basic market reading - is the market going up or down? Note, that at this stage, very few people think of the third possibility.....that the market could be going sideways2) Setting targets for the envisaged move - During this stage the person is happy if the market moves in the envisaged direction and even if the market comes just close to the target but misses it3) Getting to know all the scores and scores of Technical Indicators and tools, thinking that knowing the tools is the secret of successful trading.During this period, the person is focussed on "being right", the mentality is "me against the market", or even, "my forecast is better than yours". The person trades during this period, experiencing both profits and losses, but consistent profits elude her. She is happy every time there is a profit, no matter if it be small and tends to forget about the lossesSlowly, the Trader moves onto the next plane of evolution, wherein:1) She starts to think about various possible scenarios....and starts to think in terms of "If-Then-Else"2) She starts to think in terms of Probability....what are the chances of the IF or the THEN or the ELSE happening3) Starts to think in terms of Risk-RewardHaving mastered this higher plane, the Trader can then move on to the next plane1) Thinking in terms of strategy2) Managing multiple positionsAll of this takes time, TWO years at the minimum. During this period, one should trade as small as one can, alternating one month of Real trades with one month of Paper trades and so on.Learning to trade FX is not the same as learning to ride a bicycle or learning how to swim. Please think about it.If you have any queries, comments, problems or suggestions, please feel free to write/ call at our e-mail and phone numbers below.And, please take a look at our forex trading signals by clicking on "FX Thoughts for the Day"Learn to trade with an Online Trading Simulator featuring live quotes and charts.

Online Currency Trading and the FOREX Market - A Flexible Alternative to Commodity Trading

Online currency trading is all done through the Foreign Exchange or FOREX. It is the largest market in the world with about $1.9 trillion going into different hands everyday. Unlike all other financial markets on the planet, FOREX doesn't actually have an actual physical location. That is because it is all done on the Internet and through banks with individuals trading their local currency for another. Or, if they have come back from a different country, then they might be changing from that currency into their home currency. Because FOREX is all based on the Internet, you can use online currency trading services to work within the market 24 hours a day.But to be able to use the FOREX service, you have to sign yourself up to one of the many companies that offer FOREX trading accounts to customers. You can open an account with any one of the hundreds of companies available; and then immediately begin trading currencies. You will not want to use this service if you only exchange currency once a year, as you can do that at your local bank. Although this choice of account is available, large corporations mostly use online currency trading and they are the ones that will use this service the most.Also, on these online currency trading websites, you will get up to minute exchange rates from all over the world, so you will know the exact amount that you will get from your money. This also enables you to know the best time to use the online currency trading services. When the rates are just right for you, then that is when you can exchange your money.However, it is important to note that some currency trading companies will need two days advance notice before you withdraw your money, so it is always wise to plan ahead if your goal is to make money with FOREX trading then use that money to pay bills or to pay for living expenses.

What Is Online FOREX Currency Trading?

Currency trading has grown dramatically over the past 10 years and that then paved the way for companies to set up online currency trading. All of these companies use Forex-or the "Foreign Exchange"; they offer their customers--both new and old--a safe and secure place to make online currency trades.When you decide to use trade on the Forex, you will have a number of companies to pick between, all of which will provide you with different tools and resources. Almost all will give you up-to-the-minute market prices from the Forex's multi-source inter-bank price feed, which will enable you to make better decisions based on accurate information. There is no time-delay or re-quotes that are often apparent on other markets. You can then use these up to the minute prices and trade directly through the Internet.When you do take part in Forex online currency trading, your trades are executed almost instantaneously; in fact, on average, the trades are executed in less than a second therefore giving you the ultimate high speed transaction service.There are 15 different currencies that you can trade in when buying and selling on the Forex market; and that means that you have a lot of different options and subsequently even more potential strategies. And as the Forex market gets older (it has only been available to the public since 1995), it is highly likely that the amount of currencies available will grow. Expanding options available to traders will also expand the amount of people who trade-and thus the ease with which you will be able to execute a trade.If you are going to trade on the Forex market, then you should make sure you are in good hands. There are a number of Forex companies that will give you up to the minute news on the latest currency updates and you will always know what is happening. If you are a beginner to online currency trading, then you will have to do some research into what online currency trading is all about. Then you can make the leap into online currency trading and you will realize that Forex is your best option for earning a return on your money.

What is Forex?

The Global Forex market is one of the largest markets in the world in terms of daily volume. Its trade volume varies from 1 to 3 trillion USD every day, which is 6-8 times higher than the volume in the stock exchange worldwide. The commodies traded on Forex are national currencies. The Forex market enables exporters and importers to engage in international trade, banks and financial institutions to provide sophisticated financial services, governments to implement policies, and tourists to travel. In essence, it is a truly global market, which operates around-the-clock and around-the-globe. The global nature of the Forex market, utilizing modern information technologies and financial services, enables private investors to participate in the market from their homes or offices via telephone or computer.Return to Questions About Forex TradingHow does Forex work?The Forex market is nowhere and everywhere. There is no central place where market players execute trades. Instead, Forex is comprised of currency transactions between banks, investment funds, Forex brokers and traders. Currency supply and demand and investors' expectations determine the market price of a currency. Some currencies also come under significant influence from Central Banks. The Forex market is a virtual market, which means that it is not followed by a physical delivery of currency.Return to Questions About Forex TradingWhat is the role of Forex Club?Forex Club is a broker, which monitors global currency prices and delivers quotes to its clients via the Trading Terminal software. Its clients may buy or sell all major currencies. In addition, the clients of Forex Club are supplied with informational support, market analysis and learning materials. Forex Club does not charge any commission for its services. It is compensated for its work via a spread (which is a difference between purchasing and sell price of currencies).Return to Questions About Forex TradingIs the Forex market risky?Forex is sometimes described as one of the riskiest financial markets. However, the volatility of currencies rarely exceeds 1-1.5% per day and risks are only high when unreasonable leverage is used. By choosing the leverage size traders actually determine their risks themselves. We do not recommend our clients use leverage higher than 1:5. The Forex market is a highly speculative market. Hence, the ability to analyze price bahavior becomes an invalubale asset for any trader.Return to Questions About Forex TradingHow does one analyze Forex?In essence, analyzing the Forex market requires understanding price movement on financial markets. There are two types of analysis used in the financial markets: "fundamental" and "technical". While technical analysis gives the trader a grasp of patterns of movement in the market, fundamental analysis explains the reasons behind movements in the market and attempts to predict changes in price and market trends. A fundamental analysis takes into account the economic conditions of the countries whose currencies he or she trades, follows political events and trends in the world, and reacts to emergency news. Whatever method you prefer, the reality is that it has become increasingly difficult to be a purist of either persuasion. Fundamentalists need to follow the various signals derived from the changes in price on charts, while few technicians can afford to completely shrug off incoming economic data or critical political decisions. For example, if one looks at the chart that shows EUR/USD moves over the recent war in Iraq, it becomes obvious that victories of the Coalition forces meant a stronger Dollar and a weaker Euro. Conversely, military failures resulted in a decline of the American currency, and a strengthened Euro.Return to Questions About Forex TradingWhat is technical analysis?If there were a direct relationship between the fundamentals of a currency and its price, then life would be much simpler. But the price of anything and everything represents a consensus; an agreement. The price of something is merely that at which one person agrees to buy and one person agrees to sell. The price at which a trader agrees to buy or sell depends mainly on his expectations. If he expects the price to rise he will buy, and if he expects the price to fall he will sell. The market is made up of millions of active traders all continually expressing their expectations through trades. The history of price action is therefore a history of traders' expectations. Through a methodical analysis of the mapping of price action, it is possible to make an informed forecast of future price action. This is the core of Technical Analysis.Technical analysis is a method of forecasting price movements by looking at purely market-generated data. The tools of technical analysts are price charts and graphs. The method is based on three postulates. All market fundamentals are inherent in the actual market data. The market takes everything into account. Price movements mirror market participants, moods, interests, and opinions on further currency dynamics. Prices move in trends. In other words, technical analysis assumes that price fluctuations are not random or unpredictable. There are three possible trends: up, down or sideways. History repeats itself and therefore markets move in fairly predictable patterns. The goal of technical analysis is to uncover the patterns given off in a current market by examining past market patterns, often designated as signals.The primary tool of technical analysis is the chart and it is dedicated to identifying the patterns and trends of prices. These patterns and trends are then projected into future time to enable the trader to make informed decisions based on calculated risk. Technical analysis does not guarantee success, but a methodical application of its principles may improve your performance as a trader.Return to Questions About Forex TradingWhat is fundamental analysis?The entry "Fundamental Analysis" into your search engine will yield over a million results. Fundamental Analysis was first used to identify under or over-valued companies and forecast and profit from future price movements on the stock market. To take a fundamental approach on the Forex market you should view a country as if it were a company and consider the underlying forces affecting the country's economy.This fundamentalist approach is informed by a wide range of elements. Let's consider the currency of country "X". A Fundamentalist would analyze economic indicators (Interest rate; Employment figures and GDP to name but a few) as well as government policy (is the government right or left leaning; how secure the government's tenure is; the geo-political pressures on the government, etc.) and societal pressures (are the people "spenders" or "savers"? How do they perceive country X's economy and its economic institutions?) The information both pertinent and available is a vast ever-changing mosaic and it is impossible to keep on top of everything simultaneously. The first thing to remember is that the more you research and the more you learn, the more you will understand the subtle dynamic of the market. The second thing to do is to choose which indicators you feel are most indicative of price action. The only way to make a measured choice is to research and to listen to and learn from more experienced traders.News of economic indicators is released at set times and has a marked effect on the behavior of traders on the market, so an ignorance of these indictors would make the moves of the market completely inexplicable. It is important, therefore, to know when news is going to be announced and what the implications of the news are. Keep fully informed using the wealth of information available on the Internet. Visit the sites of the Central banks of the currencies you are considering (see the Links page), access their calendars of Economic Indicators and develop a clear idea of what economic information is about to be released and how it will affect the currency. Forex Club's internet trading platform, IDSystem, provides a constant flow of real-time, up-to-the-minute financial news from Dow Jones Newswires directly to your trading screen, equipping you to devise sound, informed trading strategies. The two services available are Dow Jones Business News and Dow Jones Money News. These services are available to Forex Club clients absolutely free-of-charge.Fundamental Analysis is generally held to be an effective method of forecasting economic conditions, but is less precise when it comes to outlining a profitable trading strategy. A trader has to derive his or her own responsive strategy. Bear in mind, also, that not only are the figures themselves important but also how these figures influence expectations.One major difference between fundamental analysis on the stock market and fundamental analysis on the Forex market is that on the Forex market you have to consider two currencies, as there are two sides to every trade.Return to Questions About Forex TradingHow is the Forex market different from the stock market?As a result of its global dimension, the Forex market is open 24 hours a day, which enables investors to correct their positions at any point in time. Given the large number of players, the Forex market has narrow spreads and virtually no price gaps. The lack of price gaps enables investors to count on non-slippage order execution. However, in a very volatile market the possibility for slippage exists.The large volume of participants also reduces opportunity for insider information. To put it simply, there has never been a case of complete currency collapse in a developed country. The volatility of leading currencies rarely exceeds 1% per day, in contrast to the volatility of stocks, which may fluctuate by up to 10% over one trading session. The Forex market generally provides more opportunities for leveraged trading (although a higher leverage size is associated with higher risks).

Forex Terminology

Glossary of forex related terms*American-style option An option contract that may be exercised at any time before it expires.Ask The quoted price at which a customer can buy a currency pair. Also referred to as the 'offer,' 'ask price,' or 'ask rate.'Base Currency For foreign exchange trading, currencies are quoted in terms of a currency pair. The first currency in the pair is the base currency. For example, in a USD/JPY currency pair, the US dollar is the base currency. Also may be referred to as the primary currency.Bid The quoted price where a customer can sell a currency pair. Also known as the 'bid price' or 'bid rate.'Bid/Ask Spread The point difference between the bid and ask (offer) price.Call A call option gives the option buyer the right to purchase a particular currency pair at a stated exchange rate.Counterparty The counterparty is the person who is on the other side of an OTC trade. For retail customers, the dealer will always be the counterparty.Cross-rate The exchange rate between two currencies where neither of the currencies are the US dollar.Currency pair The two currencies that make up a foreign exchange rate. For example, USD/YEN is a currency pair.Dealer A firm in the business of acting as a counterparty to foreign currency transactions.Euro The common currency adopted by eleven European nations (i.e., Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain) on January 1, 1999.European-style option An option contract that can be exercised only on or near its expiration date.Expiration This is the last day on which an option may either be exercised or offset.Forward transaction A true forward transaction is an agreement that expects actual delivery of and full payment for the currency to occur on a future date. This term may also be usedto refer to transactions that the parties expect to offset at some time in the future, but these transactions are not true forward transactions and are governed by the federal Commodity Exchange Act.Interbank market A loose network of currency transactions negotiated between financial institutions and other large companies.Leverage The ability to control large dollar amount of a commodity with a comparatively small amount of capital. Also known as 'gearing.Margin See Security Deposit.Offer See ask.Open position Any transaction that has not been closed out by a corresponding opposite transaction.Pip The smallest unit of trading in a foreign currency price.Premium The price an option buyer pays for the option, not including commissions.Put A put option gives the option buyer the right to sell a particular currency pair at a stated exchange rate.Quote currency The second currency in a currency pair is referred to as the quote currency. For example, in a USD/JPY currency pair, the Japanese yen is the quote currency. Also referred to as the secondary currency or the counter currency.Rollover The process of extending the settlement date on an open position by rolling it over to the next settlement date.Retail customer Any party to a forex trade who is not an eligible contract participant as defined under the Commodity Exchange Act. This includes individuals with assets of less than $10 million and most small businesses.Security deposit The amount of money needed to open or maintain a position. Also known as 'margin.'Settlement The actual delivery of currencies made on the maturity date of a trade.Spot market A market of immediate delivery of and payment for the product, in this case, currency.Spot transaction A true spot transaction is a transaction requiring prompt delivery of and full payment for the currency. In the interbank market, spot transactions are usually settled in two business days. This term may also be used to refer to transactions that the parties expect to offset or roll over within two business days, but these transactions are not true spot transactions and are governed by the federal Commodity Exchange Act.Spread The point or pip difference between the ask and bid price of a currency pair.Sterling Another term for British currency, the pound.Strike price The exchange rate at which the buyer of a call has the right to purchase a specific currency pair or at which the buyer of a put has the right to sell a specific currency pair. Also known as the 'exercise price.'*Extract from NFA guide "Trading in Off-Exchange Foreign Currency Market: What Investors Need to Know".