Posted by Dave Nettles on April 13, 2010 under Buy Foreign Currency | 
By Paul Dubsky
We come face to face with our local money every day. The time will come when some of us will need to make or receive a payment in a foreign currency. To jump this hurdle, we go to the bank to handle the currency exchange, or to a number of foreign currency exchange companies we can find on the internet, who will invariably quote far better rates of exchange. Believe me they will, they could not exist if they did not offer a better deal.
You do not have to be a mechanic to know some essential words about a car like the steering wheel, the hand brake, clutch pedal, the engine etc. But you do need to know these fundamental words to be able to understand what they refer to when becoming a car driver otherwise life would be hard. Similarly, it is important to know a little about the foreign exchange market so that when the day comes and you will be need to buy foreign currency to get that house of your dreams or anything else abroad, you are not at a disadvantage.
The FOREIGN EXCHANGE MARKET also called FOREX or FX, has no trading center.
Unlike the London Stock Exchange or the New York Stock Exchange centers, it has no fixed abode, but manages very well and is extremely active.
There are hundreds of brokerage companies and banks, who deal between themselves including big corporations. Put these on one level. On another level, there are smaller agents who handle the buying and selling of the foreign currencies, going by the rates as signaled by Reuters or other agencies. These rates are aligned to the actual events taking place nonstop in the market.
The difference between these two levels is a wholesale and retail classification as existing in other trades. When the media talk about the foreign exchange market, it is the wholesale level they refer to. Foreign exchange currency institutions have better access to obtaining a more advantageous rate of exchange than the ordinary small company or the man in the street.
The foreign exchange market operates 24 hours per day so you can always buy foreign currency.
BID is the rate at which a dealer is ready to purchase the base currency.
OFFER is the rate at which the dealer is ready to sell the basic currency.
The difference between the BID and ASK price is called the SPREAD.
The MARKET MAKERS make the profit from the spread. They make no commission.
BASIC CURRENCY is the currency against which the other currencies are quoted.
BULL MARKET refers to a price rising market.
BEAR MARKET refers to a declining price market.
BOTTOM: a description of a price decline meeting heavy support against further price decline.
CABLE: When the steel cable was connected under the Atlantic in 1850 thus linking USA with UK enabling telegraph transmission between the London and New York Exchanges, it was called ATLANTIC CABLE. Satellite and optic cables are now used, and the word CABLE refers to GBP/USD currency pair rate.
CROSS RATES: This refers to currency pairs where the USD is not included like GBP/EUR or GBP/JPY
MARGIN refers to a deposit in cash required to cover the possibility of loss the client may encounter trading the foreign exchange.
MARGIN CALL refers to a requirement for additional money, to make up the minimum cash deposit needed to cover any losses the client may encounter trading in the foreign exchange market.
VOLATILITY refers to the extent of price fluctuation.
There are of course, many more terms used in the foreign currency business, but you have here a selection which will help you to know some of the basics.
Good luck.
Paul Dubsky is director of Foreign Currency Exchange Services Ltd. The company is focused on being able to offer really friendly currency exchange rates. We believe we are the only Foreign Currency Exchange company which offers special rates to Senior Citizens. http://www.foreigncurrencyexchangeservices.co.uk
Posted by Singapore Trading Reports on March 11, 2010 under Currency Trading |
by ForexRules
So you have been thinking about Forex trading, well before you get started you need some rules and guidelines to help you become a successful trader. The other question you need to ask yourself is do you really want this? What are the reasons that you have decided to trade forex? If you write this down and continually look at these reasons, you will increase your chances of becoming a successful trader.
At the CFD FX REPORT we are big believers in these principles and we make sure that we are continually developing our members on getting better traders. If you are looking for a great Best Forex Broker that can help you implement these rules then please feel free to contact us
The 30 Rules to Follow to Forex Trading Success:
1. You should never over-trade - Don't trade for trades sake, you will lose otherwise
2. Make sure that you never risk more than 10% of your trading capital in a single trade, protecting your capital is very important. There will be more trade opportunities
3. Ensure that you never trade without careful stops and use trailing stops
4. Don't cancel a stop-loss after setting the trade- other than get out
5. Never average down on a suffering trade
6. When you get into a profit never let it run into a loss.
7. Never buy or sell just because the price is low or high, as what is high and low
8. Never try to think tops or bottoms- otherwise go to the casino and pick black or red
9. You should never limit a profiting trade, instead move your stops to guarantee a profit- ideal trading is as soon as you get into a good profit at aleast ensure a break even
10. You should never close a position toget out of the marketplace because you have lost patience or get in because you are anxious from waiting.
11. Please never hedge a losing position.
12. Never change your position or close a trade without a great reason.
13. Never follow a blind man's advice, everyone has trading certainties. Use systematically approach
14. Make sure that you never enter a trade if you are unsure of the trend. Never buck a trend. Remember the rule TREND IS YOUR FRIEND
15. Try to avoid scalping for little profits and taking large losses if you scalp you need tight stops
16. Avoid trading after long periods of failure - take a break, re look at your goals.
17. If you have a great run don't keep raising your trade size, otherwise you will blow yourself up. Remember great runs will come to an end, and sometimes great runs turn into bad runs.
18. Avoid getting in misguided or getting in right and out wrong, making a big mistake.
19. Always identify firm support/resistance levels.
20. Always lock in a profit at predetermined increments on profiting trades.
21. EVERY trade must have stop losses
22. Always distribute your risk equally among different markets.
23. Don't be a one trick pony, make money from both sides of the marketplace
24. Always reduce trading after the first loss; never increase, it is ideal if you use equal trade sizes, do not double up and try and get your money back.
25. Always cut your losses short and let your profits run - remember learning to take a loss is the first step to trading success.
26. When in doubt, get out. Do not get in when in doubt - back yourself if it doesn't feel right don't do it. Follow your gut sometimes as most of the time it is right.
27. Only trade active markets- illiquid markets will leave you thirsty- remember small markets are easy to get in, but remember you always have to get out. This is why forex trading is so popular.
28. Only pyramid trades that have a firm trend and should be accomplished once the price has crossed support/resistance.
29. Profits from a successful trade should be saved for future trade security deposits or put somewhere else, spread the risk.
30. Make sure you follow your rules
Extra Trading Tools:
If you are short term and trade goes bad, cut it, don't become a long term trader, other than you buying and hoping, not even buying and holding. Have a trading strategy before entering the market. Know before the trade is executed where you will take profits/loss.
Understand why a win/loss occurred and how you could of made the trade better. Consistency is the key to trading success, without it you have nothing. Your assessment is the only care, do not let outside factors affect the way you trade. Not everyone can be a trader, deem yourself worthy if given this opportunity. Most importantly have fun and stick to your rules and hopefully by following these rules they will increase your chances to becoming a successful Best Forex Broker
I hope this helps you achieve your goals. Happy Trading
About the Author:
The CFD FX REPORT is the first stop for traders education, real time trade ideas, they also help you find the Best Forex Brokers in the market.
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