Learning to trade Forex online for beginners

Welcome to Beginner Online Forex Trading. This site provides tips and techniques for beginning Forex traders in order to trade successfully. If you have questions not covered in Beginner Online Forex Trading please feel free to leave a comment.

Beginners guide to online Forex trading

The purpose of this post is to introduce new forex traders to the reality of currency trading. I want to get something out of the way right now. Forex will not make you rich over night! So you can stop wasting your hard earned money on ebooks and software that promise to make you a forex millionaire. The only people getting rich off of these forex products are the one's who are selling them.Now, forex trading should be looked at as a business, and like any other business, it takes time to learn. Also remember that you never stop learning. Market conditions change, especially in forex, and as they do so will you. Forex trading can be very profitable if you put the time in to learn it correctly, and find good resources to help you along the way. All of the information that you need to trade forex profitably is free, and by not looking for it and actually trying to learn it, you are adding an unbelievable amount of time to your learning curve.The one question that always comes up when talking about forex is, "How much money can I make?" I don't know what your forex account size looks like but you should be able to easily clear 5 to 10% per month if you know what you are doing. You heard right, forex returns can reach 5 to 10%, and there are some traders who make more than this with forex. This is why so many people are drawn to forex trading. This is also why so many fail. You have probably heard that 95% of forex traders lose there money, and the reason is they come in with dollar signs in their eyes and are under the impression that forex is easy. It's NOT! Don't get me wrong, forex can be "easy" once you know what you're doing. Until then spend your time learning forex and saving your money. Every trade that you don't take until you know what you're doing should be considered money made. Trust me, if you had traded it, you would be broke! I will continue with more forex insight in my next post but until then, please be smart with your money.

Forex Trading Systems

The first thing to do before you start your trading career is to develop a forex trading system. All you need to do is Google forex trading systems and you will be bombarded with every trading system under the sun, for a price of course. You will realize in time that the trading system you use depends on what kind of trader you are going to be.Huh? There are many different ways to trade the forex market, which is best is open for debate, but more often than not a trading system is going to depend on things like your personality, the amount of time you have to trade, and what kind of returns you are looking for. Let me explain, you may work ten hours a day and don't have a lot of extra time. In this case you are probably going to need a trading system that requires you to check the charts once a day, make a decision, and make your trade. On the other side, you may have all the time you need and you love always having a position in the market. You could get away with watching your charts and placing trades all day if you like. This kind of trading system when you first start out is a sure fire way to blow an account. The point I'm trying to make is that during your research into different trading tools make sure you take into consideration what forex trading system is going to fit you.Another thing to keep in mind when deciding on a trading system is to understand that just because a trading system seems too simple doesn't mean it doesn't work. I have found that the more indicators that I have on my charts actually hide what the market is trying to tell me. So try and understand what each tool does and how you can use that to your advantage. Watch your charts for a while and see if you notice any patterns. (I will get into this in another post) The technical analysis tools and theories used to create forex trading systems are no different from tools used to trade any other market. Don't be fooled by gimmicks selling you a new forex trading system. None of this is new! If you find a successful trader you will usually find they trade simple systems using tools and theories they learned 20 years ago. That should tell you something.I hope that everyone reading this will take some of this to heart. Trading the forex market can be very lucrative if you take your time to develop the best forex trading system for you. Most don't and they really cost themselves by doing this. So until next time, do some research and try to decide what kind of forex system is right for you.

Forex Trading Tools

In my last post I touched briefly on forex trading tools. I would like to go into more detail about how to use some of these and maybe answer some questions that many new traders have. The very first thing for everyone to understand is that forex trading tools and indicators are two very different things. I don't want to insult anyone but when you're new to forex some of this can be very confusing.A forex indicator could be classified as a tool to some degree because you are using it to help you make decisions in the market. I don't place too much weight on indicators because they are lagging by nature. What I mean by that is they actually calculate past data with complicated formulas in an attempt to "predict" where the forex market will go next. To me this is not a forex trading tool because I can see what the market has already done. I'm more interested in where it's going.Forex trading tools on the other hand have much better predictive value and can be used to not only enter the market exactly where you want, but also gives you an idea as to where to exit. Examples of forex trading tools are trend lines, support and resistance, and Fibonacci. These forex trading tools are used by some of the best traders in the world, and if you do not have them on your charts you should do so as soon as possible. There are many different strategies that traders use these forex trading tools for and many are successful. I would recommend everyone do research on all of these forex trading tools and see if you can develop a strategy that works well. I will go into more detail at a latter time. I hope to break down each forex trading tool and go into detail about some of the different ways they are used. So for now visit as many forex related forums as you can and register in some of them. Ask questions! There are a ton of helpful traders out there that are willing to go out of their way to answer your questions about forex trading tools and many other topics. Most are very happy to help because at one point in time they were new to forex as well. I hope some of this information is helpful to you. Please check back often as I intend to really get the ball rolling on this subject.

Daily Forex Trading

Daily forex trading or day trading can be an extremely stressful way to make a buck. Today I'm going to shed some light on why this is, and maybe some things that can help you over come some of the stress. Some would title this trading psychology, and that would probably be more appropriate. This will be a very important part of your daily forex trading so pay attention.It's time to realize that your emotions will play a part in your daily forex trading. It should be a top priority on your list to figure out how to take as much of this out of your trading as possible. Now not all emotion is a bad thing. It feels good to win and carry some momentum from it. Just remember not to let the wins go to your head either. Fear and Greed are two of the major emotions you will experience in your daily forex trading.Fear will absolutely destroy any chance you have of being successful. Fear can be caused from risking money that you can not afford to lose. Leveraging your account to realize more profit is a great way to grow an account in your daily forex trading if the market is always moving your way. This can also cause you to pull out of a perfectly good trade because you position was to large. Having solid risk management that you are comfortable with will take care of most of the fear you experience in your daily forex trading.Greed can be just as bad as fear. Usually it is your greed that gets you in a position to have to deal with the fear in daily forex trading. Ever heard greed is good? Only if you plan correctly and grow your account over time is greed good. Keep in mind that it takes a good trader years to get their trading system, risk management, and trading psychology to a point where they feel comfortable in all market conditions. So until next time, think about all of the variables that are involved in your daily forex trading. Think about your personal flaws and try to devise a plan to overcome these problems. Self awareness is key. No two traders are the same. I hope this helps you on your journey to better daily forex trading.

Trading Large NAV Percentags

There is nothing wrong with trading a large percentage of your NAV as long as you know what you are doing. It's a problem if you are trading this way because you keep acquiring positions as the market moves against you. It's okay if you take a measured defined risk because the market has entered a condition that you have decided represents an opportunity. It is very important to get out of losing positions once you know that your market position is unfounded

Carry Trading Becomes Useless

If you only have hundreds of dollars in your Forex account, then there is no point trying to take advantage of carry trades. If the market didn't fluctuate so much it might be worthwhile, but in all likelihood you'll make a few bucks here and there and end up wasting your time. So what if you make 200% over a year, you still only have several hundred dollars in your account.Concluding ThoughtsWhen you are trading relatively large positions relative to your account size, it can be exciting. You'll quickly win or lose tens of percentage points. If you are good you'll be able to build up a bit of a nest egg before too long and then start trading more appropriately for the size of the account you've built up. Quite simply, as your account gets larger the need to large risks dissipates.Get out there, take your time, make sure the market sets itself up for you just right, and then stomp around and rip a few dollars out!

Waiting For A Buying Opportunity

If you don't know how to recognize a buying opportunity, then you need to be playing with funny money still. Perhaps there has been a big movement recently. Perhaps there is a news release on the way. Perhaps you have noticed a trend and your indicators are giving you signals. Whatever the case, don't just throw your money at the market and hope for a profitable move

Managing Your Risk

It's easy to get fully invested. Heck, if you are careless you can do this in one trade. If you aren't careful you can blow up your entire account within minutes. Sure, you do have to take a risk every time you enter the market, but you don't have to take huge risks in order to achieve significant returns on your money. Make sure you are around for the long haul because eventually the market will make a move in your direction.

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Forex For The Small Speculator

Today was a banner day for me... trading the AUD/JPY with a return of more than 10% NAV. The market simply walked up and down my trend lines bringing me profits with every pass. How come this doesn't happen more often?Anyway, as a small time speculator I thought I'd outline some issues that we face compared to some of the larger traders:We trade in very small lot sizesTo make any meaningful revenue we may trade with a large percentage of our NAV.Carry trading strategies may be meaningless

Trading Large NAV Percentags

There is nothing wrong with trading a large percentage of your NAV as long as you know what you are doing. It's a problem if you are trading this way because you keep acquiring positions as the market moves against you. It's okay if you take a measured defined risk because the market has entered a condition that you have decided represents an opportunity. It is very important to get out of losing positions once you know that your market position is unfounded

FOREX Trading Strategy

Once you've identified a trading opportunity, the next step is to decide EXACTLY when to buy - and this is where many traders go wrong.Here we explain how to incorporate better market timing into your FOREX strategy - so that you can make bigger profits.Most traders time their entry levels incorrectly, so here's the right way to do it:Using Support and Resistance CorrectlyA basic wisdom of market timing is ¡°buy low, sell high¡± - well, the reality is, if you try this in FOREX trading, you'll end up losing money. First, let's define what support and resistance meansA support level is a historical price that traders come in, and buy to ¡°support the market¡± ¨C and the more times it's tested, the more valid the support will be.

FOREX

Foreign Exchange Trading

Foreign exchange trading is generally conducted in a decentralized manner,with the exceptions of currency futures and options. Foreign exchange hasexperienced spectacular growth in volume ever since currencies were allowed tofloat freely against each other. While the daily turnover in 1977 was U.S. $5billion, it increased to U.S. $600 billion in 1987, reached the U.S. $1 trillion markin September 1992, and stabilized at around $1,5 trillion by the year 2000.Main factors influence on this spectacular growth in volume are indicatedbelow.For foreign exchange, currency volatility is a prime factor in the growthof volume. In fact, volatility is a sine qua non condition for trading. The onlyinstruments that may be profitable under conditions of low volatility arecurrency options.

Why Forex Is So Popular Nowdays?

Here the most important reasons why Forex is so popular nowadays:• Liquidity. Forex is the largest financial market in the world, with the equivalent of over 3-4 trillion changing hands daily when the volume on the stock markets is only 500 billions of dollars. • Flexibility. Because of 24-hour trading participants of the foreign change market would not wait to react on some events, as this happens on other markets (for example: stock markets). On other markets you simply can be late if you have to wait till morning to show your reaction, as in the morning the event will be already in the price, greatly differ from the desired level.• Lower transaction costs. Traditionally the Forex market has no commissions, except spread, the difference between ask and bid prices.• Price stability. High liquidity helps ensure price stability, when unlimited contract size can be executed at a fair price. It helps to avoid the problem of instability, as it happens in the stock market and other exchange-traded markets because of the lower trade volume, where at one price only limited number of contracts can be executed.• Margin. Margin size for trading on Forex is defined in the contract entered between a client and a bank or a brokerage company, which gives the opportunity to enter the market for the individuals and usually it is 1:100. So, the collateral of 1000 US dollars allows a trader to make deals on $100.000. Such High leverage combining with the rapid rates fluctuation make this market profitable but at the same time extremely risky.