Learn top 10 Golden Rules of Forex Trading

Success in the foreign exchange market is not guaranteed. In order to become a successful trader, you must learn specific skills and become adept at several different trading techniques. The following are a list of rules that might help you along this path towards your profit-making goals.

1. Quality over quantity. When you are trading currencies, it’s not important that you trade many times, but that your trades are high quality trades. Do not trade frantically in the hopes that some of your trades might result in a profit.
2. Do not be emotional when it comes to your trades. Sometimes you will lose money. Do not panic and attempt to recover your losses by making a number of poorly executed trades. On the other hand, do not become arrogant and greedy with your success and then make poorly executed trades in an attempt to continue your success.
3. Learn the difference between reliable tips and gimmicks. There are a number of trading resources available, from websites to books and other traders. Make sure that you learn the difference between actual tips on successful foreign exchange market trading, and those who are trying to sell you a scheme.
4. Make sure that your trading system is simple. If it is too complicated you can end up making mistakes.
5. Make sure that you put safeguards into place in order to minimize your losses. Obviously, risks are part of trading in the foreign exchange market, but if you are cautious and use programs that are available to minimize your losses, you can end up profiting from your trades.
6. Make sure that you broaden your horizons when it comes to your trades. If you end up sinking all of your capital into a losing trade, then you’ve sunk your trade plan before it’s even begun. Instead, diversify. When you become more experienced, then you’ll know when to make riskier decisions.
7. Make sure that you can afford to lose the money you’re trading with. Don’t trade with money that you don’t have and that is going to cost you your career or livelihood.
8. Do not be a day trader. This quicker trading pace can lead to confusion and is a lot riskier. Instead, focus on long term trades.
9. Make sure that you do your research. If you ignore the market that you’re participating in, you will miss out on important trends and make poor trading decisions.
10. Make sure that you know what the foreign exchange market actually is. If you’re going to be trading in currency pairs, have all the knowledge and information that you can get so that you will make good decisions.
Simply following a few simple rules will help you succeed in the foreign exchange market.

How to Predict Forex Events using Fundamental Analysis ?

If you are new to the foreign exchange market, one of the first things you need to do is to be able to predict what the market is going to do. One of the main techniques that are used in order to do this is fundamental analysis. Fundamental analysis attempts to predict how the market is going to respond based upon predicted or actual events. These events can be anything, including political and economic information and environmental or natural disasters.
Technical analysis and fundamental analysis can be a reliable method of predicting what will happen in the foreign exchange market and how currency rates will react to certain information.
Technical analysis looks at trends and previous information related to the market. Fundamental Analysis, on the other hand, looks at predictions. It determines how the market is going to react based upon certain current events and how these events will change currency prices.
An economics calendar is available to traders who would like to be able to effectively trade using fundamental analysis. An economics calendar is based upon existing data and can help a trader predict what is going to happen in the market. It is a tool that can be used to decide when to buy and sell and where to place stop losses.
It is important to watch interest rate levels when using fundamental analysis. Increasing interest rates can mean that a country’s currency is strengthening. Unemployment rate is a second factor to keep an eye on. An increase in unemployment can mean that an economy is suffering and can decrease the value of a currency. The third factor to be aware of is the GDP or Gross Domestic Product. If a country has a high GDP then more than likely the currency is going to perform well.
It is also important to keep in mind that in most trades on the Foreign Exchange Market, the US Dollar is somehow involved. Therefore, you need to pay close attention to the economic information that comes out of the United States.

How Fundamental Analysis Influence on Your Trade ?

When a foreign exchange market trader uses fundamental analysis, they are looking at how economic and political news information can influence the price of currencies within the market. Even though economic and political news can cause the market to fluctuate quickly for a short amount of time, generally speaking, fundamental analysis is better suited for use over a long period of time than a short one.
It is important to follow news information because even these short-term changes in the market can have a major effect, especially on day traders. If an economic speech is being given or a meeting of several countries is taking place, the market can have a very strong reaction and can have a negative or positive impact on the market, and on a trade that might have been made.
For example, you might be following a trade on the Yen but a piece of economic news has been released from Japan saying that economic predictions were not correct and that the economy has actually decreased significantly within a certain amount of time. This negative information could result in a decreasing value of the yen and that could very easily take away whatever profits you initially made from your trade. However, this initial, strong market reaction could easily disappear in a few hours and the direction of the currency will change once again.
In this kind of situation, you have to decide what the best move is. If you don’t have stop losses in place, then you have to make the difficult decision to potentially lose money by getting rid of the currency or holding onto it and hoping that your currency will rebound. If you do have a stop loss in place in order to save your capital, then you need to have a replacement trade planned out in case you do end up hitting that stop loss.
A trader needs to pay attention to both technical analysis and fundamental analysis. You should always pay attention to world events when you are setting up a trade and attempt to determine how those events could impact your trade. You can find technical models available which can attempt to predict what might happen with certain events. The goal here is to minimize your losses and decrease the impact on your trades by using the proper exit and entry points.

Forex Traders mistake – Forget the Fundamentals

Many traders are using technical analysis in an attempt to predict whether or not currency prices are going to increase, decrease, or stay the same. However, they may make mistakes regarding their trade if they forget about fundamental analysis.
Political and Economic information that is released globally and locally can have a major impact on currency markets. Normally, financial information will have the most impact upon the currency market, but that doesn’t mean that other events can have an impact on the market. Sometimes, setting stop losses is the only way to minimize the damage that can result from such events.
Take, for example, the impact that the British Petroleum oil spill or Hurricane Katrina had upon the currency markets. These events were completely unexpected and had a very large impact upon the foreign exchange markets. In other situations, these events might be planned. But you need to take similar steps to attempt to minimize losses.

Traders also need to pay attention to how unrelated events might impact their trades. For example, an economic situation in one country might actually help that country’s local currency and local economy, but might have a negative impact on other surrounding or interconnected economies. Focusing only on the country affected can result in a loss of capital.
Currency traders trade in pairs. So, if you’re only looking at how an event is going to affect one currency, then you ignore opportunities that might present themselves with your other currency. Also, a news event that affects one of your currencies negatively or positively can have the opposite effect on your other currency.
Focusing on how political and economic information can affect your trade is very important for currency traders. There is no excuse for losses resulting in market changes from information that was made available to you, that you chose to ignore because of a lack of focus on fundamental analysis.

How to Trade Using our Economic Calendar ?

So first visit our economic calendar – forex calendar – Forex calendar important events and releases that affect the forex market
There are correct and incorrect ways to use an economic calendar. Even though it may seem obvious how to use one, that isn’t always the case. Economic calendars normally contain the following information; news released in the US, European and Asian world regions, the time in GMT when that information will be released, and how the foreign exchange market will respond to that information.
Many traders who are new to the foreign exchange markets believe that you should trade based on the economic information that is announced. However, this is not the case. Often times, traders don’t have the available knowledge and ability to respond to the information. Imagine that you are privy to this economic information. By the time you have analyzed it and then made a decision about what trade strategy to follow, that information is no longer valid. You might be entering the market on a trend that is ready to change.
Just because an economic calendar and news information is pointing in a certain direction, don’t use that as a reason to make a trade. Releases of new news information can cause a short-term change in the market. It doesn’t necessarily mean that something long-term is going to take place. Because of that, if your chosen trading strategy indicates that you should make a certain trade, then go ahead and do it.
The economics calendars help you manage your trades but you shouldn’t make trades based only upon the information that is presented. Basically, economics calendars allow you to do the following. First, they let you make an education decision about whether or not a piece of news information is going to have a large or small impact upon the direction of the market. This can help you decide what to do with current trades. For example, if you believe that the information released will not be detrimental for your trade, then you can make the decision to do nothing. However, if you believe the information could have an impact on your trade, you can take the steps necessary to minimize your losses.

Fundamental Analysis is Forex Investment Strategy – insure a return on your investment in the foreign exchange market

You must have an understanding of the fundamentals of trading in order to effectively have an investment strategy on the foreign exchange market.
Trading is not the same as a foreign exchange investment strategy. A trader uses technical analysis to trade foreign currency in order to make a gain in a shorter period of time. On the other hand, an investor can use fundamental analysis on the foreign exchange market in order to decide which currencies they should invest in so that they will make a profit in a longer period of time.

Investment Strategy on the Foreign Exchange Market:
When you study the economic situation of a certain country in order to make trading decisions then you are using fundamental analysis. An economic calendar is published based upon the predicted outcomes of published economic information, political and social events, information that is presented by political and economic figures. Some of that information might come from the manufacturing output of a certain company or economy, an increase in prices of housing and an increasing number of purchases of homes, what inflation and interest rates are doing to the economy, what the forecasted cost of oil is, what the employment rate is, what the country’s budget deficit is, how confident consumers are in their own economy and how much money they are spending, and what the country’s trade balance might be.

Investors on the foreign exchange market will look at all of these things when they’re making an investment decision. They are looking for a long-term trade and are not looking for day trades and short-term market decisions. They try to use fundamental analysis to assist them with these decisions.

As you can see on the below chart, based upon published economic data, the currency pair is vacillating back and forth without an obvious trend. This is because all economic data can have a small, short term impact. If you look at the second chart, though, you can see a broader time frame where a larger trend is much more obvious.

There are always opportunities for investment. If you have used fundamental analysis to make your trade decisions then you can take advantage of available profit. For example, if you had made the decision to invest in Australian currency in 2009 while most of the rest of the world economies were struggling financially, then you would have made quite a bit of profit in a matter of months.

You can use fundamental analysis to insure a return on your investment in the foreign exchange market as long as you have a basic understanding of how to properly use it.

What is Fundamental Analysis and why is important in forex trading

Fundamental analysis uses the news to analyze the foreign exchange market to conclude what traders currently feel about the market and what direction they feel the market is going to take.

Fundamental analysis is based upon economic information and news. Economic news produced in a country can shape the opinion of investors and traders who operate within that economy. Through the shaping of their opinions, the market can have an impact on the currency of that nation. Positive economic news can result in an increased amount of confidence in the currency and economy of a nation. Inversely, negative economic news can result in traders exchanging the currency that they lack confidence in for one that they might feel more secure about.

News stories about Gross Domestic Product, Manufacturing and Employment numbers, retail sales, intervention by banks, decisions about interest rates, reports about inflation and trade balances, reports about terrorism or major natural disasters and information about political unrest can all have an impact on the economic status of a country.

How can Fundamental Analysis result in a profit from the foreign exchange market?

Identifying public opinion of the currency market is an integral part of fundamental analysis. Traders make the decision about whether or not they will retain a currency based upon their opinion of that country’s economy. Traders receive the news as soon as the public does. If that news is positive and the inclination is that the currency will remain strong, then traders will hold onto it, other traders will start purchasing it, and the value will increase. However, if that news is negative then traders will sell the currency and that will result in the price of the currency decreasing.

When you see spikes on a currency chart, what you are actually seeing is the impact of economic information. The foreign exchange market reacts almost instantly to new information that is released in a country. Opinions are created in seconds and this results in a large number of new purchases or sales within a market. It takes some time for a larger currency movement to take place, depending upon the perception of the market.

It takes time and practice if you want to make accurate trades while using fundamental analysis. If you are trading on the foreign exchange market then there are opportunities available for you to buy or sell currency based upon how other traders are viewing a certain market. However, because the market can make very quick and very radical changes, and because a currency might behave in a very unexpected way, you cannot always be certain that you’re making the right decision. Choppy, wild moves can occur in a market as soon as news is released and is digested by the market. Often times, during those wild moves, inexperienced traders can become tangled up in all the resulting information.

Studying past information can help you effectively use fundamental analysis in order to trade. Practice on trades that aren’t going to result in large losses, or even practice on trades that you have not invested in, attempting to predict market changes without losing any capital. When you have mastered fundamental analysis, at least to the point that you are comfortable using it in most situations and you feel like you have enough practice, then you can start trading normally.

Learn about Equities and correlation with Forex Market

All of the monetary markets are entwined. There are a variety of examples but one of the best examples is present in the relationship that the equities market has with the foreign exchange market. The perception of how the stock market is performing is part of the standard used by fundamental analysis while trading currencies and equities. A large portion of this perception is the result of whether or not the economy is performing well. The economy can have a large impact on equities trading. For example, if a stock for a company is traded as an equity, the presentation of that stock could be based upon the perception of how well that country’s currency is doing.

How is the Foreign Exchange Market affected by equities?
Here are some examples to show how much equities can affect the foreign exchange market:
Countries with export heavy economies generally favor policies of currency deflation. If a local currency is fragile then the export goods are cheaper and, for that very reason, other countries are inclined to purchase goods from that country because of the decreased value of the currency. Because of the increased purchase of export goods results in a profit from the producing companies. As long as these companies profit from export goods, then the currency will remain weak in order to continue this tradition of profit. One example of this situation took place in Japan until recently when the price of the Yen begins to increase and the value of the Japanese stock market decreased drastically.
The foreign exchange market can also be affected by equities due to acquisitions or mergers. Transactions such as these can be compensated through cash, stocks, or a combination of cash and stocks. If it is an extremely large transaction, one that might be larger than one billion dollars, and if the companies involved are in different countries, then there must be an exchange of currencies. Cash transactions have the largest impact on the foreign exchange market. Stock transactions have the smallest impact on the foreign exchange market. A 2000 study shows that cash transactions resulted in the receiving corporation’s country currency rising by a full percent. There are examples available in the table below.

These examples that have been mentioned above show, with irrefutable evidence, that the foreign exchange market and the equity markets are closely related. This information should be used when making trade decisions with the affected currencies.

How Traders Gain Money with Forex Charts ?

If you are new to the foreign exchange market, you will probably have some success and a lot of loss. But don’t give up. Foreign exchange trading isn’t something that you can jump into without any experience. You need to take your time. One of the best things to do is to find a professional trader, someone you can trust, to mentor you. One of the first things you should learn is charting and technical analysis.
The foreign exchange market is constantly changing, mostly because of the impact from experienced investors and large international banks. Instead of trying to take on one of these investors or banks, you have to learn to work with them. They use the same techniques and technical analysis that are available to you.
You need to focus on the indicators in order to make money in the foreign exchange market. You have to understand what the indicators mean so that you will know when to make trades and when you can profit from those trades. Learn what indicators successful traders use. Most good traders use pivot points, price channels, RSI, and MACD as indicators. They call this the Foreign Exchange Fibonacci retracement. Successful traders know how the market behaves and they’re capable of identifying excellent buy and sell points. You need to pick tools that are going to match your trading style and stick with them.
Each trade that you make is a piece of business and it needs to be treated as such, so make sure you have a trading plan. Calculate your risks and whether or not it can be profitable for you to make a trade. It might be tempting to make a trade because it seems like a good opportunity, but you need to think about possible risks and potential return. You can make a beginner’s mistake by not thinking about how much you want to invest in a trade, or what your entry and exit point is. Make a plan using technical analysis. Put your charting skills to work. Then stick with your plan to avoid making any novice mistakes.

Top forex answers that you need to know before you become forex trader – what is forex

What is forex ?
About Forex
The meaning of word “Forex” is “Foreign exchange” which is commonly used in overseas exchange industry. Laws of demand and supply are so typical for the finance industry started influencing the cost thus certainly leading to new trend. This new trend is called as floating amount policy.
Participants of Forex
In general we can say that Forex is just a currency market around the globe which does’nt has any branches. Central state financial institutions or banks, other commercial banks or financial institutions, financial enterprises, professionals and ordinary individuals are the contributors of the Currency trade.
Market Volume of Forex
The total purchases amount on Forex is high. As per the survey the daily summary income in 2010 to 2011 means 4 billion $ which is increasing day by day. This shows the development and trust of forex trading.
How to generate income on Forex
In position exchanging currencies, to buy at a less cost and sell at a higher cost so that Unusual Return may carry income. There is no need to go to any bank or related institutions. You can do business of overseas exchange through internet.
Many individuals, got used to hear announcement about the amount of money every day, believe that the currency modify cost does modify every day. Also in real the charges modify very rapidly, in each and every second of time. The size changes are somewhat small but if an individual have the slightest cost modify can carry a significant economical outcome.
Capital amount needed for trading in Forex
Nowadays there is no need of huge investment to start trading online. Margin trading is helpful for persons who can make less investment in the beginning. Thanks to it, an individual obtains the same economical outcome from each business as if he had resources hundred or so or 200 or so periods bigger than own. Traders and professionals call this by the name leverage in simple words.
We can say an individual has an amount of $100. With the power of 1:100 he can easily manage 100*100=10,000$. This is the reason a tiniest currency modify amount modify of 1.00 cent will give him a significant revenue, approximately 100 $ at a certain variety of a business.
Currency trading made easy software
To create Unusual Return work comfortable, a unique application known as interacting terminals elaborated. This software application becomes simpler to execute positions and watch the amount of modify. Other than this, we can see a probability to get economic announcement and do the technical analysis in trading terminal.
Training in trading process
For the easiness of users, training is better which can give better results. Training makes a trader more perfect in doing business easily without loss and fear of loss. You can open a unique practice account known as demonstration account and in a few minutes you can research all aspects of interacting without any actual cash committing.
Opportunities in Forex Market
Today Currency trading opens wide possibilities for all individuals. For few people it is a good committing way. It is practical for both committing all of the financial commitment decision capital as a whole and diversifying resources by splitting the selection between different spheres of financial commitment decision.
For others Forex overseas exchange industry is a chance to get extra cash. As opposed to owning shares, currency trade interacting may carry revenue even if the industry falls. That is why earning income on amount of modify change is more popular during the financial state uncertainty. Besides, as a concept, the range of currency modify variation is increased in such times and it raises the probable probability of getting more income.
Forex broker
An individual requires a Brokerage so that all the prospects of the overseas exchange industry would become available. A bank or interacting middle (providing prospects of currency modify dealing) may act as an agent or broker. As a concept, the conditions are more ideal in an interacting middle and registration procedure is simpler and due to this reason many beginners select exactly DC.
What broker means?
Broker is a middleman between a trader and market participants who will help the trader to earn income easily. After joining in the site, the new trader is offered to download an interacting terminal for a regular or mobile interacting and to activate. If an individual is interacting for initially, he has to research Forex content and, may be, begin a demonstration profile where he is able to check his skills and make sure the currency trading may carry a significant economical outcome.
Selecting a broker

Selecting a broker for trading, many individuals ask the same concern, which one is the best- A large number of forum pages are used up, hundreds of content are issued, many rating systems are formed but you will not get a perfect answer yet discovered to this concern. Each individual has his preferences and tastes. So one and the same agent cannot be ideal for everyone and be practical for all the professionals.
Who is best broker?
Answering the concern which Brokerage is the best, we should say: your agent. If you are not certain yet, you may select right now, begin a interacting profile and concentrate on the procedure of revenue generating which is better than buying broker and searching for the reviews of old customers.
Earning limit on Forex
Forex industry is a possibility of endless revenue. As an example, if the worker of a firm is limited by salary or prospects of the enterprise, the Forex revenue is similar to percentage relative to your financial commitment decision capital and the business amount. So on paper you can increase your interacting resources and get marketed ad infinum which there is no possibility to happen in your case if you will stay on same usual positions. When interacting efficiently and viably the earnings may be similar to hundreds and more in a month. A quantity of revenue gotten depends on the abilities and also determination of the person who makes trade. So if you believe in your abilities and think that you deserve more, then begin walking your path into the community of economical freedom and self-reliance right away. At this time we can say that the amount of modify may have been changed 3-5 periods and lots of successful professionals have gotten tons, that have discovered their way to a reporter interacting profile. Now it is your turn. You can decide a good forex agent and can move forward in trading business to earn more income without any tension of loss.