10 Most Frequently Asked Questions on Forex

1. What is the best Forex platform?

There is no one way to answer such a question. This will of course depend on the trader, in accordance with his preference, knowledge, experience as well as what he intends to trade (which financial instrument). Many intermediate-experienced traders, especially when trading on the currency market, prefer to use platforms such as MT4 or C-Trader which are designed mostly for Forex trading, as well as CFD trading, and for someone with some knowledge of the trading market.

Others, more novice traders would prefer the use of such platforms as ones found from Easy-Forex, iForex, or eToro, where limited math/ computational knowledge is required for their use and are a lot more straightforward to use.

More advanced/ experienced traders, which may also prefer access to multiple markets would prefer to use such brokers as Interactive Brokers or SAXO Bank's SAXO Trader. Such platforms usually contain much more advanced charting/ analytical tools (although to be fair most analytical tools can also be obtained from MT4/ C-Trader) and also give access to thousands of instruments including Equities, ETF's, Swaps trading etc; and are designed with the ability to effectively allow traders to partake in such markets.

2. Forex Trader: What is the best way to do forex trading?

If you've looked into trading forex then you have most doubtable been exposed to all the various opportunities to make money and are wondering which is the best way to learn forex trading. First of all, the foremost thing I would advise is to get a Forex Education. There are countless material on Forex in the internet for newcomers as well as experienced traders - all you need to do is search. Spend some time reading up on how forex trading works, the concepts behind trades and how prices are impacted by economic and political conditions.

Secondly you must get some experience, if you want to learn forex trading, it's the only way. To begin with it is prudent for this to be on a demo account. This will give you a good technical foundation on the mechanics of making forex trades and get used to using a trading platform.

After having traded for some time on a demo account it is very important to also use a Real one, albeit with little investment amount - find a broker that will accept lower sized trades (0.01 lots for FX) so that you can get a real feel for the live market. It is a whole different game trading on a demo and real platform, due to the psychological effect that trading with real money has. Trading small will allow you to put your money on the line, but at little risk if you make mistakes or lose money.

From there, provided you are gaining more than you are losing, you should gradually increase your trading size and invested capital, always keeping in mind it should be an amount you can afford to lose and which you feel comfortable with.

3. What is the best forex trading software?

There are a number of Forex Trading software available, all with their specific advantages and disadvantages. Many trading companies have built their own platforms while others prefer to use, and in effect White Label, existing solutions which are commonly known within the industry.

To say which one is best would be invalid as this falls on the opinion of the individual user, however there has been a clear trend in terms of popular platforms, which have proven to be favored among both novice and veteran traders. These platforms are the Metatrader 4 and C-Trader. The former has been built primarily for Forex products, while the latter has been designed to accompany other instruments such as Equities and ETF's. Both platforms are easy to use and master and come complete with full charting and technical analysis capabilities.

4. Forex Trader: How can one be a good forex trader?

If it was to be summed up in one word, the key to a good forex trader is discipline. Yes there are many things to learn and know before you make any trades or get involved in the financial industry, but one thing that must stay consistent throughout is discipline. Discipline in learning, in making your first trades and in sticking with your plan.

The basics that all new traders should follow are:

- Learn about Forex - there is an abundance of material on the net. Spend a good 1 month learning. Study Technical and fundamental analysis. Your learning should continue well into your trading and be ongoing.

- Come up with a strategy - Set rules that will determine your trading pattern and how you will enter and exit the market.

- Practice on a Demo - Open a demo account and trade as if for real. Of course this will not be 'exactly' as if you were trading on a real, due to the fact that fear of losing would not weigh in on your decisions. Do not proceed to the next step unless you can make a profit on the demo first.

- Practice on a real account with small amount - Do this so as to be able to understand the difference between trading with real money and trading on demo. Do this with substantially a small amount, but enough so that you are concerned over losing it.

- Trade on real account with substantial amount - Do this with an amount you are 'comfortable' to completely lose. Even if your strategy worked on the demo and on a real with a small amount it may not continue to do so in future. Stick to your strategy (have complete discipline). If you see the strategy is failing, then adjust your strategy accordingly, but stick to it (to the pip) at all times once it has been decided.

5. Foreign Exchange Market: Is it possible for an amateur forex trader to make sustainable profits trading forex?

Many Traders have made a living off of trading Forex and some have had very wealthy returns which have allowed them to become self-employed and leave the 9-5 work behind them. All of these traders have 1 thing in common - they all started out as an amateur forex trader! No one is born with the trading know-how; it is achieved through dedication and discipline.

So Yes! an amateur forex trader can indeed make sustainable profits from trading forex. As long as he is willing to put in the effort and has the discipline to follow through with such a commitment then there is no reason why he cannot do what others have done before him in the same shoes.

6. Forex Trader: Who is the best forex trader?

There is no one best Forex Trader - or at least there is no clear way to measure this (is it the amount one has won or the % gained from it). Also as many of the top forex traders in the world do not trade with their own money but instead funds and Company capital, it means that different psychological and risk appetite conditions exist for different traders and as such makes it bias to compare such traders success with those who trade with their own capital.

The one thing to know is that what a lot of Forex traders do have in common is their appetite for success, their diversified portfolio and willingness to take measured risk.

7. Has anyone ever made money trading FOREX?

Yes! Not only have people made money trading Forex but many have made a livelihood!

Although the majority of retail traders would not have as much success as professionals would, this is largely attributed to poor money management strategies and lack of discipline in sticking with their strategy.

With 100% discipline and a good money management strategy, there is no reason why anyone should not have a good chance in making money from trading Forex.

8. Is FOREX the best way to invest money?

It is hard to say if it would be the Best as there are numerous ways of investing money and would largely depend on what the individual is familiar with; however it is one of the best, largely to the fact that unlike stocks/ housing market - an investor can make money regardless of the how the instrument is doing by both selling/ buying that instrument (or doing both - known as hedging).

In the Stock market it is only possible to invest in the success of a stock - however in Forex you can both buy/ sell a certain currency against another and hence there is always a possibility for profit to be made.

Also the fact that Forex is commonly traded on leverage, it allows Forex trading to become one of the most volatile and hence allows for higher profits (as well as losses) to be made - if traded correctly.

9. Foreign Exchange Market: What are the best forex blogs?

There are a number of locations on the web to find a great forex related blog, in fact many brokers have their own blogs also; but in order to remain unbiased I will recommend a non-broker blog. One of the most useful blogs for both novice and veteran traders alike is at babypips.com - there is a regular update on current market movement as well as an abundance of information and back-forth ideas being expressed.

10. Why do individual investors usually lose money in Forex?

The majority of retail investors end up losing money in Forex. In spite of the fact that they may receive the right training and educative material (or at least the same as some other successful traders may receive) many often fail due to bad money management rules and/or lack of discipline. The latter is the most often.

The hardest thing in Forex is not making the calculations or predicting where to enter, how much to trade and/or what your limits should be; it is sticking to your strategy and following through with 100% discipline

Forex Signals - What Are They?

If you are a Forex trader, then you undoubtedly make use of Forex Signals to help you decide not only what currencies to buy and sell, but also at what price and under what conditions. Regardless of the kind of trader you are (long-term or short-term), your personal risk profile (low risk or high risk) or what specific type of forex instrument you trade (spot cash, forwards, futures or options), forex signals form the basis of your trading decisions, whether you are aware that fact or not!

So what exactly are the various different types of Forex signal and how are they used by different types of trader?

Let's start by going back to basics. In essence, a forex signal is nothing more than an instruction or a recommendation to make a forex trade. Could that instruction stem from a panicky voice in the trader's head yelling "sell the dollar now!"? Yes indeed, that is probably the most fundamental kind of signal there is!

But usually forex signals are associated with a little more accuracy and a little less emotion than that. Mostly they are generated by applying various technical analysis rules to charts of price movements. The actual signals that arise from these applications are usually specific to the individual trader and are based upon a range of configuration options.

For example, you may have two traders who are both trading the same market (USD/EUR say). They are both looking at the same prices and they might even both be using the same application to generate their forex signals. But if trader Bill is a day-trader or scalper and has configured the application to generate short-term signals and trader Bob has a longer-term outlook and has configured the system to generate signals that will allow him to ride the trend, the trading signals they see might be diametrically opposed to each other, even though they are coming from the same system.

That is why it is important that, whatever forex trading system you use, you set it up to match your own outlook and to follow your own trading strategies. Any forex signal is only as good as the trader who is using it. There is no such thing as a universal forex signal. If there was, there would be no market (because for any market to exist, you always need both buyers AND sellers).

Whatever forex signals you decide to use, and whatever your trading perspective, always remember the golden rule - never risk more than you can afford to lose!

Analyzing Different Trading Instruments

Strife is the affix of the world's most efficient trading Forex tools; Manufacturers' are finally setting up the most effective and easy tools to trade with. On hullabaloos bound to persist, traders are apprenticed to benefit more. This does not only exclusively gives you an upper hand to opt wisely on the best Forex tool to trade with, but also lets you to compare the products and have the best trading capabilities in the market. Today, there are numerous trading systems to trade with. Detailed herein are two major Forex instruments in the market and their attributes.

Forex Megadroid automaton:
Megadroid was created by two accredited persons in the trading industry, with thirty-eight years of training and experience; they are the most respected loyalists in the masses of Forex trade, (Albert Perrie and John Grace). This trading instrument is extremely earning whim in the global trading industry. It is however aforementioned to quadruple every single dollar you invest in spite of the market condition. According to its web page, it has an anticipating capability of close to 95.82% accuracy. Only seven exceptional months in the business of currency trading, it has attained recorded gains of 1,384.87% just from 340.33%. Its project is to fissure the 2,000% profit mark by the end of the year. Megadroid assures full money-back compensation in the consequence that you buy the product and it deceives to work successfully. It is fitted with plug-and-play lineaments and fast installation process. Moreover for any inexperienced user, there is an effortless steps tutorial to tutor you on how to trade. You will be eligible to trade on test basis until you are self-gratified that the trading tool works.

FAP Turbo Forex Robot:
This constitutes amongst the most-reviewed automated Forex trading software with a minimal of $50 as a start up trading requirement; it bears straightforward directions and tutorials on the web page. Besides, it accompanies a pre-programmed software capability known as the Scalper Relax Hours and 2 winning advances, an interim scalping design and a long-term trading tactic. The trading system has major advantages when employing real time trading capability sometimes regarded as "off session and on session"; it implements trade when the market looks more inevitable. This is the advantage behind Scalper Technology - to lead you through venturous trades that may truncate your chances for raising profits and minimizing losses.

Kill Those Bad Habits in Your Forex Trading

The Forex market is full of possibilities for personal traders. There is the potential to do very well financially for those who are able to study, work hard and exercise patience and self-restraint. It is vital when learning Forex that the trader has information from experienced traders to help along the way. Use this article to find tips about Forex trading.

People tend to be get greedy once they start seeing the money come in. This can make them overconfident in their subsequent choices. Another emotional factor that can affect decision making is panic, which leads to more poor trading decisions. Remember that you need to keep your feelings in check, and operate with the information you are equipped with.

Most Forex traders who have been successful will suggest that you keep some type of journal. Complete a diary where you outline successes and failures. Keeping a diary will help you keep track of how you are doing for future reference.

Don't trust anyone to watch your trading activity other than yourself. You know yourself and your trading strategy better than anyone. Software can't be trusted to completely control your trading. It takes a human touch to really figure out Forex trading, if you want to be successful.

Do not buy an automated Forex software product that cannot be personalized. You should strive to change your system. Your software can also be varied in order to better fit your particular strategy. Check to make sure that your software is customizable before you buy it.

Is Forex trading something you want to give a go? Before you begin this adventure, you need to understand how the market works in depth. Learn about currency fluctuations, and what causes shifts in the currency markets. Do you research on the foreign currencies traded on this market. When you are armed with knowledge, the odds will be in your favor that you will pick currencies that will see an increase in value.

Don't think that you can come along and change the whole Forex game. Financial experts take a great deal of time and energy practicing and studying Forex trading because it is very, very complicated. Your odds of finding a trading method that works better than these tried and true methods are incredibly small. Do some research and find a strategy that works.

You should be very cautious about utilizing robots in Forex, as they are often detrimental to buyers. Buyers rarely benefit from this product, only the people selling it do. It is better to make your own trading decisions based on where you want your money to go.

Few things can benefit Forex investors like perseverance. All traders hit a run of bad luck at some point or another. But what makes a successful trader different from an unsuccessful trader is that the successful traders just do not quit. When things seem awfully dark and you forget what a winning trade even looks like, keep on and ultimately, you will triumph.

Forex trading information can be found anywhere online at any time. You are better supplied for the experience when you definitively know the ropes. Joining a forum to talk to others involved with and experienced in Forex trading can be quite helpful in understanding information.

Why should you consider Forex market trading over other options? The Forex market is open all day, so you can make trades any time. When investing in Forex, a little can go a long way. Both of these outstanding benefits mean that Forex is accessible to nearly everyone and at any given time.

Forex trading, or foreign money exchange plan, is devised as a way for you to make money by trading foreign currency. Many people use this to earn cash on the side, or even as a full time job. You will want to be sure you know exactly what you are doing before you begin buying and trading.

Use what you want as well as what you expect to select an account and features that are right for you. Acknowledge you have limitations and be realistic. You will not master trading overnight. Generally speaking, it's better to have a lower leverage for most types of accounts. For starters, a practice account can be used since there is no risk involved in using it. Know all you can about Forex trading.

Forex can have a large impact on your finances and should be taken seriously. People who are interested in Forex for the thrill of making huge profits quickly are misinformed. It would be more effective for them to try their hand at gambling.

All Forex traders need to know when it is time to pull out. Many times, traders see their losses widening, but rather than cutting their losses early they try to wait out the market so they can attempt to exit the trade profitably. That is the quickest way to lose more money.

Choose an extensive Forex platform to be able to trade more easily. There are platforms that give you the ability to see what is going on in the market and even execute trades all from your smartphone. You'll get faster reactions and better flexibility this way. Don't allow limited Internet access to hinder the availability of investment opportunities.

Make and stick to a plan. If you do not have a plan you will not win. Having a plan and sticking to it will avoid temptations where you would trade with your emotions rather than your knowledge.

You should always be concerned with risk management. Have a clear idea what acceptable losses are within risk management. Never override your stops or limits. You can lose everything very quickly if you get too emotional and don't focus. Knowing when to cut your losses and call it a day can help you to succeed.

Again, any trader new to the Forex market can gain useful information and knowledge by learning from experienced traders. Anyone looking to get started in the Forex market should keep in mind the tips presented here. The opportunities are huge for traders that work hard and take expert advice.

Compare Forex Trading and Stock Trading

The forex (foreign currency exchange) market is the largest and most liquid financial market in the world. The forex market unlike stock markets is an over-the-counter market with no central exchange and clearing house where orders are matched.

Traditionally forex trading has not been popular with retail traders/investors (traders takes shorter term positions than investors) because forex market was only opened to Hedge Funds and was not accessible to retail traders like us. Only in recent years that forex trading is opened to retail traders. Comparatively stock trading has been around for much longer for retail investors. Recent advancement in computer and trading technologies has enabled low commission and easy access to retail traders to trade stock or foreign currency exchange from almost anywhere in the world with internet access. Easy access and low commission has tremendously increased the odds of winning for retail traders, both in stocks and forex. Which of the two is a better option for a trader? The comparisons of retail stock trading and retail forex trading are as follows;

• Nature of the Instrument
  The nature of the items being bought and sold between forex trading and stocks trading are different. In stocks trading, a trader is buying or selling a share in a specific company in a country. There are many different stock markets in the world. Many factors determine the rise or fall of a stock price. Refer to my article in under stock section to find more information about the factors that affect stock prices. Forex trading involves buying or selling of currency pairs. In a transaction, a trader buys a currency from one country, and sells the currency from another country. Therefore the term "exchange". The trader is hoping that the value of the currency that he buys will rise with respect to the value of the currency that he sells. In essence, a forex trader is betting on the economic prospect (or at least her monetary policy) of one country against another country.

• Market Size & Liquidity
  Forex market is the largest market in the world. With daily transactions of over US$4 trillion, it dwarfs the stock markets. While there are thousands of different stocks in the stock markets, there are only a few currency pairs in the forex market. Therefore, forex trading is less prone to price manipulation by big players than stock trading. Huge market volume also means that the currency pairs enjoy greater liquidity than stocks. A forex trader can enter and exit the market easily. Stocks comparatively is less liquid, a trader may find problem exiting the market especially during major bad news. This is worse especially for small-cap stocks. Also due to its huge liquidity of forex market, forex traders can enjoy better price spread as compared to stock traders.

• Trading Hours & Its Disadvantage to Retail Stock Traders
  Forex market opens 24-hour while US stock market opens daily from 930am EST to 4pm EST. This means that Forex traders can choose to trade any hours while stock traders are limited to 930am EST to 4pm EST. One significant disadvantage of retail stock traders is that the stock markets are only opened to market makers during pre-market hours (8:30am - 9:20am EST) and post-market hours (4:30pm - 6:30pm EST). And it is during these pre-market and post-markets hours that most companies release the earnings results that would have great impact on the stock prices. This means that the retails traders (many of us) could only watch the price rise or drop during these hours. Besides, stop order would not be honored during this times. The forex traders do not suffer this significant disadvantage. Also, a stock trader may supplement his/her trading with forex trading outside the stock trading hours.

• Affordability
  In order to trade stocks, a trader needs to have quite a significant amount of capital in his account, at least a few tens of thousands in general. However, a forex trader can start trading with an account of only a few hundreds dollars. This is because forex trading allows for higher leverage. A forex trader could obtain larger transaction compared to stock market. Some forex brokers offers 100:1, 200:1 or 400:1. A leverage of 100:1 means that a US$1k in account could obtain a 100 times transaction value at US$100k. There is no interest charge for the leveraged money. Stock trading generally allows for not more than 2 times leverage in margin trading. There are interest charges associated with margin trading.

• Data Transparency & Analysis Overload
  There are thousands of different stocks in different industries. trader needs to research many stocks and picks the best few to trade. There are many factors that affect the stock prices. There are much more factors that may affects stock price than foreign currency exchange rates. The forex traders therefore can focus on few currency pairs to trade. On top of that, most data or news affecting currency exchange rate are announced officially, scheduled and in a transparent manner. Retail forex traders therefore have better chances of success than retail stock traders.

• Bear/Bull Stock Market Conditions
  Forex traders can trade in both way buying or selling currency pairs without any restrictions. However, stock traders have more constraints to trade and profit in bear market condition. There are more restrictions and costs associated with stock short selling. In a bull market when the economy is doing well, stock traders have a high chance of profitability if they buy stock first then sell it later. Savvy forex traders however, could operate in all market conditions.

• Trending Nature of Currency
  Major currencies are influenced by national financial policies and macro trends This national financial policies and macro trends tend to last long in a certain direction, either in monetary expansionary (rate cutting) or monetary contractionary cycle (rate hiking cycle). Stock prices however tend to fluctuate up and down due to many factors, many of these factors are micro and specific to the stocks. Therefore forex traders can better exploit the trends in foreign currency markets that stock traders in stock markets.

• Regulation
  Generally, most major stock markets are better regulated than forex markets. Therefore, traders need to be aware of this difference to stock markets. Fortunately, there are however many reputable forex brokers in the market. With prudence and proper research, it is not difficult to find a suitable reliable forex brokers.

Based on the above few points, forex trading seems to be a better trading option than stock trading, especially during these uncertainties in the global economy. During bull market condition, stock trading could be a viable alternative. A stock trader should definitely seriously consider supplementing their trading with forex trading. Forex trading enables a stock trader to exploit any opportunity arises during non stock trading hours, by trading in forex trading. Forex trading would also enable the stock traders to understand a more complete big picture of world economies operations and further enhance their stock trading skills.

Learn How To Trade Forex - Can A Beginner Make Money In Forex Trading?

Introduction

Contrary to what every Forex 'expert' out there would have you believe, it's not easy to learn how to trade Forex at all. Trading Forex is one of the most challenging skills you can ever set out to learn, which is especially daunting if you're a beginner just starting out to learn how to trade Forex. If you're finding it hard to learn how to trade Forex successfully right now, you're probably wondering: "Can a beginner make money in Forex trading?" By the end of this article, you'll know what you can do to make money in Forex trading right now.

Can A Beginner Make Money In Forex Trading?

If you have a look around the many Forex websites, forums, seminars and magazines, it seems like everyone's making millions of dollars trading Forex! The thing is, Forex traders love to talk about their winning trades and make themselves out to be wildly profitable traders, but the reality is that only 5% of Forex traders are consistently making money. Yes, even a beginner can make money in Forex trading, but there's a big difference between making money in Forex and making a full time income, achieving financial freedom, and building wealth through Forex.

What Stops Beginners From Making An Income

So what's stopping beginners from making a consistent, long term income from trading Forex? Well, unlike the professional Forex traders working for the big banks and hedge funds, most beginner traders learning to trade Forex aren't paid a full time salary to immerse themselves in the markets. If you're just starting out in Forex, then you've probably got a full time job that you spend at least 8 hours a day on, and a family and social life outside of that. That means that you have a very real shortage of time to get yourself to the level where you can trade like a pro, and believe me, it takes a lot of time and consistent effort.

It takes years of study, practice and real experience in the markets to learn how to trade Forex successfully, and get to the level where you can consistently make money in Forex trading. Not to mention that you'll be taking on, for all intents and purposes, an unpaid part time job that will chain you to your computer while you are trading. It's something that will alienate you from your social circle, and put considerable strain on your family relationships as well. It's no wonder that most traders wanting to learn how to trade Forex will give up within 3 months, and never make money in Forex trading.

What You Can Do To Make Money In Forex Trading Now

So what can you do to make money in Forex trading right now? The best shortcut I know is to buy a proven Forex trading system to do your trading for you. I'm not going to look you in the eye and tell you that you can just go out there and pick any system and make millions, because that's simply not true. Profitable trading systems are rare, and you need to choose very carefully. That said, if you can find a trading system that works, you can overcome the biggest challenges any trader faces while they learn how to trade Forex. You'll be able to gain valuable Forex market experience, preserve your personal relationships and most importantly make money in Forex trading while you learn how to trade Forex.

When you've built up the capital and income of your Forex systems operation, and have gathered up valuable trading experience, you may decide to try out trading Forex for yourself. Regardless of whether you trade with an automatic Forex system in the short, medium or long term, it's a powerful solution that will enable you to make money in Forex trading even if you're a beginner.

Thad B. is a Professional Trading Systems Developer who has developed and managed dozens of profitable trading systems over the years for a private hedge fund. Forex trading systems are his passion and expertise, and he has a wealth of helpful resources available for any serious Forex systems trader.