Forex Trading for Beginners – Page 2

On the right, if your browser has JavaScript enabled, you will see a table showing current prices for a selection of foreign currency pairs and precious metals; moving arrows indicate the direction of the last price movement. The forex market is open 24 hours a day and closes only between Friday and Sunday afternoons EST (New York) time. Most trading activity, however, is when two or more major exchanges – New York, London, Zurich, Hong Kong, Tokyo or Sydney are open. To see how these opening times overlap in relation to your own time zone, you can download a table here. There is a lot of other useful information on other topics of interest too for our members.

An example of a forex 'trade' – in layman's terms

Let’s say the current EUR/USD buy price is 1.2620 (1 EUR = 1.2620 USD). You buy 1 lot of EUR because your analysis reveals that the rate will rise (meaning the value of the euro will go up in relation to the dollar). After 15 minutes the sell price has risen to 1.2640. You can stay in the trade for as long as you like, but if you 'close your position' (selling euros and buying back dollars), then your 20 pip gain equates to a profit of around $200 and this would be paid back into your trading account, together with the 1% margin (guarantee) required for the trade. On a standard account this is $1000 per 100,000 unit lot. With a 'mini' account amounts are divided by 10, so 20 pips would be $20 and the guarantee required $100.

Why might forex trading be of interest to you?

If you are currently resident, planning on retiring in, or making your base in a foreign country, you should be able to use the internet (even via your mobile phone) without being affected by regulations and controls on foreign workers. In the case of forex (currency trading), transactions are made overseas, but deposits and funding can be made using your 'home' or offshore bank account. An ATM card makes it easy to withdraw cash anywhere. Trading forex in Asia is quite feasible and could be tax-free too. If you don't have international banking facilities in your country, learn how virtually anyone can legally open a free non-resident bank account in the USA.

Forex trading advantages and benefits

• Easy to learn to start trading, mentally stimulating, even exciting;

• Can be done anywhere there is an internet connection – even using internet shops, or 'wireless' on the beach! Many brokers have web-based trading interfaces which means they work through a browser like Internet Explorer or Firefox. Others require a one-time download to a PC first;

• Markets open 24 hours from Sunday through Friday afternoon (EST);

• Completely under your own control as to what, how and when you trade;

• No joining fees or set-up costs required to become a forex trader;

• Free sources of information, free software, free training, free practice accounts from banks brokers and dealers; no commission on trades;

• Learn and practice with a demo account for as long as you like without making or losing real money, but your results are not really true to life.

• With knowledge and experience, there is the potential of earning tax-free extra income from forex trading.

And on the "other side of the coin"...

• There is the risk of loss as well as chance of gain with live trading;

• As with most things in life, there are winners and losers, so you should not invest funds you cannot afford to lose. Often loss will come before gain, as experience, knowledge and forex trading strategies are learned;

• Despite the promises of 'experts' who sometimes charge large amounts of money for information or products that they claim will make you a winner all the time with their secret or special systems, there is no ‘Holy Grail’ – no foolproof system that will guarantee consistent success with forex. The constant movement of prices in both directions preclude this;

• Practicing with a demonstration account is educational and mentally stimulating, even fun, but successful trades require self-discipline and good strategy. This comes only with time and experience.

• Your own mental attitude while trading has a profound effect on your results. Learn about 'optimising your mind' to control the way you think.

So how and where do you start?

A good starting point would be to open a practice (demo) trading account with a reputable forex broker or bank.

eToro offers many features that make trading, monitoring, communicating and staying informed relatively simple. Here's a video tutorial.

Our next and probably most important recommendation, would be to purchase the book by Dirk du Toit (see below) called "Bird Watching in Lion Country". It has helped countless traders, old and new, including ourselves to better understand the workings of the forex market and how to start making successful trades. We review "Bird Watching" in some detail here.

A Couple of Forex 'Good Guys'
For further training resources, many of which are free, we mention these names with confidence, because their offerings are genuine and not scams or fraud:  Bill Poulos and Dirk du Toit; there are others but these two men stand out as they rely on their personal reputations and are happy to show their faces. They also have many satisfied customers who trade not only forex, but other markets too, such as stocks, commodities, options and futures trading.

Bill Poulos (Forex Profit Accelerator, Instant Profits, Quantum Swing Trader)

Bill Poulos has been trading the markets since 1974. Learning from experience, he has developed stock trading systems as well as several trading methods. Bill holds a Bachelor’s degree in Industrial Engineering, and a Master’s degree in Business Administration, with a major in Finance.

In 2001, Bill launched his company, Profits Run Inc, and is now teaching students all over the world how to trade successfully. Read satisfied client testimonials for Bill Poulos courses for trading students of all levels.

New and experienced forex, stock, futures, commodities, options and 'swing' traders who have been searching without success for workable, realistically priced trading courses need look no further than the father and son team of Bill and Greg Poulos.

Read a review of Instant Profits or Bill's top selling product for stock swing trading Quantum Swing Trader. But the best was yet to come to forex trading...

Bill Poulos launched Forex Profit Accelerator (FPA) in September 2007. It could have been named "Forex-in-a-Box" as it contained every possible resource and training tool any forex trader could need. Read a review of the FPA components and tools or visit the FPA website now.

All 950 Forex Profit Accelerator copies were taken within 10 days of its release, followed by 550 more copies in December. A new version was released on July 22 this year. By the 28th only a handful of copies remained. It may seem expensive but compared to a university course which offers no promise of a regular income, Forex Profit Accelerator is worth the investment.

For a limited time, with a copy of Instant Profits, you get a full hour of extra screen-capture videos showing you step-by-step how to apply Instant Profits to the FOREX markets. Even if you don't trade Forex, these extra videos will help you understand how to make Instant Profits in any market.

Dirk du Toit (Dr Forex)

Dirk D du Toit heads a South African capital management consultancy which specialises in forex trading. He is the Chairman of the Forex Investment Association of South Africa and also an Associate of the Financial Planning Institute. He also holds the International Capital Markets Qualification from the Securities Institute in London.

Dr Dirk is a well-known and respected personal forex mentor, trainer and author of the best selling forex book "Bird Watching in Lion Country - Retail Forex Trading Explained". This is 'required reading' and re-reading for anyone trading or intending to trade in the forex market. We review it here and from, we assume, the many thousands of copies sold, over 150 new, old and potential forex traders have bought 'BWILC' on our recommendation.
 

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