What Is FOREX

(Forex) Foreign Exchange Market is the place where the currency of any country is exchanged for that of another at a mutually agreed rate. It came in existence about 35 years back when international trade transitioned from Fixed to Floating Exchange Rates, and nowadays it is considered to be the largest Financial Market in the world because of its tremendous turnovers and everyday increasing traders. Forex trading is just like trading in any other commodity and needs the skill to earn fortunes together with Constant Market Study.

Introduction to FOREX

SGD - Singapore Dollar Unlike other financial markets Forex has no physical location, like stock exchanges, for example. It operates through the electronic network of banks, computer terminals or via telephone. The lack of physical exchange enables Forex to operate on a 24-hour basis, spanning from one time zone to another across the major financial centres (Sydney, Tokyo, Hong Kong, Frankfurt, London, New York etc). In every financial centre there are many dealers, who buy and sell currencies 24 hours a day during the whole business week. Trading begins in the Far East, New Zealand (Wellington), then Sydney, Tokyo, Hong Kong, Singapore, Moscow, Frankfurt-on-Maine, London and ends in New York and Los Angeles. Below there are approximate trading hours for regional markets (London time)

Japan : 0.0 to 6.30

Continental Europe : 6.30 to 13.00

Great Britain : 8.30 to 15.30

Usa : 14.30 to 21.30

Every currency is traded in pairs and each is assigned with an abbreviation. Mentioned below are some of them.

EUR - Euro

USD - U S Dollar

GBP - British Pound

JPY - Japanese Yen

CHF - Swiss Franc

AUD - Australian Dollar

CAD - Canadian Dollar

NZD - New Zealand Dollar

FOREX Avenue

In my continuing quest to provide visitors of my site with a large amount of options to chose from when considering working from home I have done some research on Forex trading. I first learned of Forex trading while pursuing my MBA program. For those of you who have never heard of this, Forex trading is the exchange of foreign currency.

I know I would have never even know this was an option for making money had I not found out in class. Most of the really big corporations have departments of people that do this for a living because it can be very lucrative if done correctly. The best news I have learned about this process of exchanging currencies is that many of the websites that you can sign up with to do this offer free trial accounts to help you learn before you invest your money into trying it. You won't make any money in the trial accounts if you do well, it is just pretend money essentially but with the real market conditions. If you do well in the trial account you will know if this is something you want to try on your own.

Benefits to Forex trading are that is can be done 24/7 whereas the stock market is a business hours only exchange. It is 24/7 because it is done with countries around the world so clearly there are countries that are awake and working while we sleep. Another benefit is you are in control of the trading on your account. You do not need to hire a licensed broker to make your trades and charge you fees. Along those same lines, anyone who does any investing most likely knows that some funds require you to own then for a certain period of time or pay early withdrawal fees. You do not need to concern yourself with this either. One last benefit that I would like to point out is the fact that Forex is not really subject to the same kinds of swings in the market that stocks are subject to. Of course if you always buy and sell the same currencies then there will be market swings. But, because there are hundreds of currencies out there, there is always going to be something for you to make money on because while one currency is up in value another one is down and vice versa.

There are many resources available to someone interested in becoming involved in this type of training. The Federal Reserve Bank's website is just one example of the information available - http://www.ny.frb.org/markets/foreignex.html. Here is another article that you will find helpful in starting out in this field. http://www.forex.com/pdf/pro2.pdf . I have also included one of the sites that does offer a free lesson.

While there are many benefits to this type of training, as I mentioned above, there are certainly risks involved as well. There are risks with exchange rates, central banks in foreign countries, and risks involving interest rates and credit. Forex is quickly becoming a popular way to help diversify your investment portfolio. If you are good with understanding investing concepts and enjoy doing it this may be the home business opportunity for you. Just do your research and try to find one of the sites offering the free trial account to practice with and you are well on your way down the Road to Riches.

Why Is Forex A Great Trade

The Forex market seems to be one of the hottest markets right now. Let’s take a look whyIt takes small amount of capital to get going and you get leverage with it.This is important because a lot of people entering the market are looking for ways to make money and not just to invest their spare cash. Leverage means that you can use other people’s money to make your investment bigger. Not to try to scare you but this also introduces greater chance for Loss. This is not for the faint hearted or people not willing to learn how to trade, understand their trading phycology and follow money management rules. Having been duly warned please keep reading about the great potential and positive aspects of Forex trading. Leverage is a very powerful tool to make money very quickly. The Forex Market is the largest in the world worth more than a Trillion dollars a day. This is important for many reasons:It provides amazing liquidity. There are always people ready to buy and sell so you can always enter and exit your position easily. Smaller markets may not always give you the ability to exit your trade so easily. It is difficult for larger players to influence the market. In the stock market the larger players can influence a particular stock and cause movement just by their trades.The sun is always shining somewhere.There is always trading going on 24 hours a day Monday to Friday. It goes from city to city following the sun. Plus you still get your weekends of to relax. With stocks the markets closes and news is released and the stock can gap at the open leaving you in a worse position. When you can trade a very liquid market open 24 Hours it makes it a whole lot easier to manage your positions and relax. You are trading so that you can have a better life right?, not just stuck in front of a computer. It is important to get clear on why you are trading or you can just be just swapping one situation for another and not really improving your life. Pep talk over with let’s get on with it. VolatilityStocks may go in sideways movements and suddenly rush up or down and there are a lot of stocks to choose from. Sure there is some stocks renown for being volatile but it is easier to find consistent volatility in the Forex market. The market is always moving so there are always plenty of opportunities for day trading. So I obviously think that the Forex Market provides great opportunity for people to enrich their lives. It gives people willing to learn a little a great lifestyle that many will envy.I hope that you enjoyed that simple summary. There are many more great reasons to trade forex.

Learn FOREX Trading

This article will give you some basic forex trading tips. Forex which stands for the foreign exchange market, is one to the most traded markets today. Forex trading is the trading of money. It consists of simultaneously buying one currency and selling another. You are basically investing in the economy of a particular country. In the past, forex trading was reserved only for the wealthy. But with the development of the Internet, anyone can become a forex trader. - The very first lesson on forex trading is to trade pairs, not currencies. You must do your research and know how each currency impacts the other.- You must learn the basics of forex trading before starting to trade online. If you don't learn the basics you will probably lose all of your investments and then some!- You must decide whether you are going to begin trading on your own or if you are going to be using a broker to trade for you.- Making a trading strategy is vital to making money with forex trading. You must make a plan for how you are going to trade, what currencies you are going to trade, how much investment you are going to make and so on. Trading without a strategy is financial suicide.- Don't trade during off peak hours.- Remember that the market will go up and the market will go down. No one can accurately predict the future.- Pay close attention to the news. Major events will have a powerful impact on foreign currencies. Keep an eye on the news and trade accordingly.- If you have a trade that is not working for you, get out now. Don't hang on, waiting for it to turn. This just increases your risk for loss.- Keep your emotions in check. When you are emotional, you tend to not make the best decisions. Trade objectively and leave emotions out of it.- Stay confident. The best way to do this is to learn the business inside and out before you begin to trade.- Never spend money before you make the money. Thinking that you have a sure thing and that your trade is going to make you thousands of dollars is a guaranteed way to lose your shirt.- Be very careful when choosing a broker. Read discussion boards, ask for recommendations from people you trust. There are brokers out there who only interest is making money off of your money. They have no interest in finding you the best trade.Making money in forex trading is not that difficult if you know what you are doing. It is vital that you do your research and learn everything you can about forex trading. A lot of online trading sites will let you demo trade for a while. This means that you can practice trading without risking any money. Once you do that for a couple of months and you know exactly what you are doing, then it can be time to take the big plunge into the world of online forex trading.

Simulated FOREX Trading

If you are considering trying your hand at forex trading, it is best if you try simulated forex trading first. A simulated forex trading account lets you see the account online and see how it would perform if it were a read account. Simulated forex trading gives you the ability to make pretend transactions and will give you an idea of how actual forex trading works. You will be able to see if your trading resulted in a profit or a loss at the end of the day without risking any real money.Simulated forex trading works by giving you an imaginary amount of money in your simulated margin account. You will watch the news reports and study the currency markets. When you decide which currency will increase in value against another currency, you buy an amount of that currency and sell off the equal amount of the decreasing currency. The difference between the two currencies is what gives you your profit. Using simulated forex trading is the best way to learn the forex trading game without risking your own money. Most people learn best by doing and simulated trading is no exception. The learning is less stressful because you are not risking any real money. A simulated forex account will also allow you to get a feel for forex trading. After using a simulated account you may find that forex trading is something that you just don't want to do or you don't have a knack for it. Then again, you may find that you really love it and are very good at it. Either way, it is nice to be able to find these things out without risking your life savings. Simulated forex trading will also let you practice your trading. You can learn from your mistakes without risking any real money. The more you practice at anything, the better you will get. This rule applies with forex trading also.Most of the brokerage houses will offer simulated forex trading. Some may charge for the service, but the fee is usually small. The brokerage house knows that if you are able to practice and get comfortable with forex trading , you will more than likely start making large trades, which in turn makes them more money. It's a win-win situation for both of you. So before you jump in feet first to forex trading, use a simulated forex trading tool to learn the ropes. Forex trading can be quite volatile and complicated. Be smart, practice first and don't risk losing your hard earned cash.

Future Investments In Forex

There are many many advantages over the various other ways of investing. First of all it is a 24 hr market, except for weekends of course. You have the US market then the european and then the Asian. One of the great times to trade is during the over lapping periods. The USA and european overlap between 5am & 9am eastern and the Euro & Asian between 11pm & 1am eastern. Usually the busiest time and best to trade.

The is also the risk factor for the accounts. With futures and options you can get margin calls that can wipe you out. If you get caught in a bad trade not only do you lose the money in the account but you may have to come up with alot more from your pocket. It can be very risking. But not in Forex. Worst case senerio you could lose whats in you account. But you would have to do something really stupid. Like making a big trade on a Fundamental day and leave it alone. If market takes a bad move and you weren't there. OOOPS. But That wouldn't happen with a smarth trader.

Then there are the demo accounts which is an account where you can trade using all the right things, platform,charts,and information. But you are using play money, or what we call paper trading too.

Plus with Forex you have a mini account. Instead of needing thousands of dollars to get into it. You can open an account with as little as $300.00. Now of course you will be trading at 1 tenth of a trade. IN other words you controling 10,000 instead of 100,000.00 These are call lots. Which also means you will only risk 1 tenth too!

FOREX Trading Software

This article will answer your questions about choosing a forex trading software. If you are considering forex trading then you must know that a good forex trading software is a must for every forex trader. This will help you to acccess market information daily to help you in your trading decisions. But how do you choose a good forex trading software? What should you look for? You should know that there are two basic types of forex trading software. There is the web based trading software and server based trading software. The web based trading software is more popular than the server based. With the web based software, everything is stored on your broker's website. You log in with you access information to use it. There is no expensive installation of data servers and you don't have to worry about maintenance or upgrading.With the server based software you first need a well equipped computer to use for your data server. This can be very expensive. These data servers are used to transactions of the user and traders in addition to website content. The disadvantage to this software is that there can be delays in transmission because of the Internet connection speed. Sometimes just the physical distance between the main server and the peripherals of the trader can cause delays. Therefore, the server based trading software is more expensive and more difficult to use.A good trading software should be able to be customized to your specific trading style. The forex trading software on the market today allows you to maintain trade records and it has a charting interface. But some people need to be able to custom their software based on their trading style. A lot of traders like to trade using a system of moving averages. If this is your style, make sure that your software can do this for you. Of course the most important thing about choosing forex trading software is making sure that it is reliable. You want to make sure that you can get instant access to the trading market so that you will be able to check prices and movement. Make sure that there are no delays in data delivery with the particular software you are considering. Do some research and ask around in the trading forums for recommendations for good forex trading software. If a lot of people recommend the same software, you can be pretty certain that it is a reliable software. Good forex trading software can make all the difference when it comes to making money or losing money. That is why it is very important to do your research first, learn all you can about forex trading, and then make a decision on forex trading software.

FOREX Trading Tool

What is one of the most important forex trading tool that you can have access to? It would have to be a calendar of economic reports. This calendar will help you to avoid trading when the market is volatile and unpredictable. A good economic reports calendar can save you a ton of money and help prevent a loss in the forex trading market. To find the best calendar to fit your needs, shop around on the Internet and find the one that suits your needs the best. There are plenty of free resources online. The website known as the ForexFactory has a lot of good information on forex trading and a very lively forum. It also has a great calendar. This calendar can be set to your time zone and will give you the time that fundamental announcements will be made in your local time. No more confusing conversions to GMT or daylight savings time. The calendar does it for you. It also has a great color coding feature that has economic reports that are likely to have the greatest impact in red, medium impact in orange and minor in yellow. You can tell by just a glance the best times to trade and when to exercise some caution.A website called the FXCM has an associated site called the dailyfx.com. This site has a daily calendar containing fundamental announcements that can be viewed online or downloaded to a PDF file. The reports that will have a major impact are in bold. The PDF file can be printed out to use as a reference on your desk or beside your computer.Another good trading calendar is the Econoday calendar. This is the favorite among many professional forex traders and fund managers. But this calendar requires a paid subscription. If you are just starting out, there is a free version from Barrons that is good. This calendar will also give you links to detailed explanations on all the major economic reports and why the market cares about them and the effect that this will have. Forex trading can be complicated and the market can be quite fickle. The economic calendar is your road map to success. You wouldn't want to wander around in the dark without a flashlight, so you shouldn't want to do forex trading without a calendar. A good calendar of economic reports can make all the difference between gains and losses in the forex trading world.

Calculating the Earnings

For instance, EUR/USD the exchange rate is 1.2505/1.2509 & your leverage is 1:100. You believe EUR/USD will shoot up & buy 0.1 lot of EUR/USD at 1.2509 (Ask price). So, you buy 10,000 EUR and sell 10,000*1.2509=12,509 USD. In fact to fund this position you do not have to have 12,509 USD but only 125.09 USD. The rest of the money is leveraged to you by the service provider.

Leverage (or gearing) mechanism allows you to open and hold a position much larger than your trading account value. 1:100 leverage means that when you wish to open a new position, then you need to support a deposit 100 times less than the value of the contract you are interested in.

For example, you believe that EUR/USD is moving higher and buy 10,000 EUR and sell 12,509 USD. Assuming you are right and EUR/USD goes up to 1.2599/1.2603 and you decide to close the position: when you close a long position you sell the base currency (10,000 EUR in our example) and buy the quote currency (10,000*1.2599 = 12,599 USD):

To fund this position you only need 100 EUR (approximately 125 USD) not 10,000 EUR. The profit on this position is 90 pips (1.2599-1.2509=0.0090). A pip or point is a minimal rate fluctuation. For EUR/USD 1 pip is 0.0001 of the price (see Table 2).

This example shows a favourable outcome. If EUR/USD had fallen you would realise a loss not a profit and with leverage this loss will be magnified. For example, if you close the position at 1.2419, your loss would be $90.

Forex Enterprise

A new marketing course to hit the internet by Nick Marks that advertises earnings of $1000 a day and $30,000 a month respectively. This turnkey system generating multiple streams of income is relatively new and so it is my pleasure to review it for you.

After purchasing you are given a login page where you are introduced to the system which is in website format. Everything is easy to access and well organized.

After Nick gives you a little pep talk about positive thinking and goal setting, you will be introduced to his first recommendation: join Coastal Vacations. While not a part of his main Forex system this is a recommendation I could've done without.

In the pay per click section you are given a large list of keywords that Nick found convert really well with his system. Some of the keywords in the list have bid prices already attached to them so you can get front page exposure.

The course also has $50 in free adwords credit that unfortunately only works with new accounts so I was out of luck. If you don't already have an account this is worth the price of the course alone.

The forex course shows you some inexpensive traffic methods and provides links to these sources. He also covers stuff like pop-over ads, e-mail lists and autoresponders. Not bad information by any means, and is an alternative to pay per click advertising if you have a smaller budget.

He has an ebook package that seemed like it was going to be really cool as there were dozens of bonus ebooks and software programs covering everything from creating ebooks and website templates, to getting top positions in the major search engines.

As I took a closer look at this package I realized there were some bargain bin informational products included. However, there were also alot of goodies in there as well that I found rather useful. You get so many ebooks and software in here that it really is worth far more than the price of the course.

There is a section on becoming an Ebay power seller in 90 days that goes into a fair amount of detail and wasn't bad. However, Ebay isn't something I have ever been particularly interested in doing. There is also a section on baccarat strategies that I had no interest in.

One of the last sections of his course introduces you to e-currency exchanging using the DXINONE system. It is a great way to acquaint yourself with this increasingly popular opportunity without having to buy standalone e-currency courses which can cost a couple hundred dollars.

The author has combined several effective ways to earn money online and rolled them all into one course. While I didn't jump up and down about all of his strategies, the free ebooks, software, and adwords credit make Forex Enterprise worth the money.

Futures Versus Forex

Todays current futures market is quite unlike the futures of the 19th century. Todays future market is a worldwide one that includes manufactured goods, financial currencies and treasury bonds, and agricultural products.

When you speculate on futures it is not the actual good that is speculated upon rather it is the contract for the goods that is traded as value. Every futures contract includes a buyer and a seller. The following is an example of a futures speculation: A farmer agrees to deliver 1000 bushels of corn to a baker at a price of $5.00 a bushel. If the daily price of corn futures falls to $4.00 a bushel, the farmer's account is credited with $1000 ($5.00 - $4.00 X 1000 bushels) and the baker's account is debited by the same amount. Futures accounts are settled every day.

Using the above as an example this is how the contract settlement would play out: If the price of corn futures is still at $4.00 the farmer will have made $1000 on the futures contract and the baker will have lost an equal amount. However, the baker can now purchase corn on the open market at $4.00 a bushel - $1000 less than the original contract, so the amount he lost on the futures contract is made up by the cheaper cost of corn. Also, the farmer must sell his corn on the open market for $4.00 a bushel, less than what he anticipated when entering the futures contract, but the profit generated by the futures contract makes up the difference.

Speculators profit by daily fluctuations in the futures market by choosing to buy from the seller (buying short) or from the buyer (buying long).

The FOREX market has advantages over the futures market. FOREX is the largest financial market in the world. It is a liquid market and stop orders can be executed more easily and with less slippage than in other markets. The FOREX market is open 5 days a week, 24 hours a day. Traders can take advantages of opportunities as they become available. FOREX transactions are usually instantly executed. FOREX transactions are commission free. Brokers earn money on the spread.

5 EMAs FOREX SYSTEM, Exponential Moving Averages Full Potential

Among one of the important concepts a new forex trader should know is what a Moving Average means, how it's calculated and what its use as a trading indicator is.

Moving Average is defined as a technical indicator that shows the average value of a particular currency pair over a previously determined amount of time. This means, for example, that prices are averaged over 20 or 50 days, or 10 and 50 min depending on the time frame you are using at the moment of your trading activity.

As an averaged quantity, MA's can bee seen as a smoothed representation of the current market activity and an indicator of the major trend influencing the market behavior.

The basic mechanics of how Moving Averages can tell you where the forex market is moving (up or down), at the moment of your analysis is by considering two different time frame Moving Averages and plotting them on the forex chart. It is very important that one of these MA is over a shorter time period than the other one; let's say one will be over a 15 days period and the other over a 50 days period. Most trading station software available by a number of brokers will let you do this plotting and much more.

Recently there has been the realese of a new forex trading system called "The 5 EMAs FOREX SYSTEM". This system will allow you to identify both entry and exit points with incredible accuracy. He even claims you can convert $1000 into $1000 000 in just 24 months. He may be exaggerating a bit on this, but his plan of action and use of moving averages is quite outstanding and accurate.

Depending upon the exit strategy selected, the system generates monthly returns of between 30% and 55%. Which is more tha enough to make a living trading the forex markets with the 5 EMAs Forex System.

Policies of Agencies

In Foreign exchange trading a "Spot" basis means that all trades settle two business days from inception, as per market convention. The settlement date is referred to as the value date. There is no physical delivery of currencies hence, all positions left open and will be rolled over to a new Value Date.

If you have a long position (bought) and the first currency in the currency pair has a higher overnight interest rate than the second currency, then you receive a gain. If you have a long position (bought) and the first currency in the currency pair has a lower overnight interest rate than the second currency, then you lose the difference.

If you have a short position (sold) and the first currency in the currency pair has a higher overnight interest rate than the second currency, then you lose the difference. If you have a short position (sold) and the first currency in the currency pair has a lower overnight interest rate than the second currency, then you receive a gain.

The act of rolling the currency pair over is known as tom.next, which stands for tomorrow and the next day.

Useful Tips for Forex

To improvise the returns in your Forex Trading programme, we provide you with the useful TIPS that everyone wants to know about. Our Tips are not conventional but most traders don't make money fast in Forex trading so don't let that worry you. These are simple yet powerful tips any Forex trader should consider to improve their profitability. A good place to start is with classic investment book - the Zurich Axioms by Max Gunther. The wisdom is simple, profitable timeless, unconventional, funny and its one of the most inspiring and essential investment books ever written. Several of the Axioms are not accepted wisdom - however the Swiss investors who wrote them became rich, while most investors are not.

"The allure of diversification has to be resisted"

Diversify your investments is accepted as a way to make money longer term and reduce risk but all it does is dilute profits. You will read about risking 2% per trade and spreading your trades around. But if you are like most Forex traders and trading a small account of around $2,000 you won't make much money risking $40.00. The Zurich Axioms encourage you NOT to diversify. Look for the big potential winners and risk more. This does not mean you are being rash, you are simply risking more on the high odds trades and ignoring marginal trades - many traders simply trade too much. In currency trading you don't get paid for how much effort you put in or the amount of trades you make instead you get your reward for being RIGHT with your trading signal.

The Pareto Principle - 80 / 20 Rule.

The above philosophy of trading less is related to famous the 80 / 20 rule or Pareto principle. The rule states that 80% of your results come from 20% of your activities. This is true in many areas of life in sales, business and trading. The rule postulates that by concentrating on the best investments, and ignoring the others, you can improve your profitability by only focusing on a smaller number of good trades. This is really a common sense rule, yet very few Forex traders think about or practice this rule. Most Forex traders are obsessed with trading - they think if their not in the market they will miss a move.

Other traders try trading in ways that simply offer them no chance of success like Forex day trading or scalping. I know traders that make triple digit annual gains and only trade once every few months and I know other traders who trade every day and lose. Keep in mind the aim of Forex trading is to make money and that’s all. The major reason traders don't win is because of the fear of risk. But to make big gains you have to take calculated risks when the time is right and a good trade presents itself and load it up with a meaningful amount of money.

"Worry is not a sickness but a sign of health...If you are not worried, you are not risking enough" and "Always play for meaningful stakes. If an amount is so small that its loss won't make any significant difference, then it isn't likely to bring any significant gains either". If you want to make money fast in Forex trading then you need to risk meaningful amounts on the right trades at the right time. So if you want to make money fast seek out the high odds trades and load them up with as much as you can afford and aim for and achieve higher returns.

Currency Trading Techniques

Among the first places to look for education on currency trading techniques are brokerages. These companies will want you to be confident in using their trading platform, and thus will give you a full education, for a fee or for free, on using trading techniques, such as stops and limit orders.

Other places to look for online or classroom education on currency trading strategies are forex education institutions (such as TraderHouse) and market information providers (such as Reuters).

Most of the courses offered will integrate the currency trading technique education as part of teaching a complete trading system.

The education should show you the most advantageous situations for using, for example, market orders. In very volatile situations a market order might get your order filled for a very different price that you intended it to be filled.

Another example is placing stops. There are some very popular price points for stops, such as around round numbers that traders use. How and when to use similar entry techniques should be part of the education.

100% Hedging Strategies

Hedging is defined as holding two or more positions at the same time, where the purpose is to offset the losses in the first position by the gains received from the other position.

Usual hedging is to open a position for a currency A, then opening a reverse for this position on the same currency A. This type of hedging protects the trader from getting a margin call, as the second position will gain if the first loses, and vice versa.

However, traders developed more hedging techniques in order to try to benefit form hedging and make profits instead of just to offset losses.

In this page, we will discuss, some of the hedging techniques.

1. 100% Hedging.

This technique is the safest ever, and the most profitable of all hedging techniques while keeping minimal risks. This technique uses the arbitrage of interest rates (roll over rates) between brokers. In this type of hedging you will need to use two brokers. One broker which pays or charges interest at end of day, and the other should not charge or pay interest. However, in such cases the trader should try to maximize your profits, or in other words to benefit the utmost of this type of hedging.

The main idea about this type of hedging is to open a position of currency X at a broker which will pay you a high interest for every night the position is carried, and to open a reverse of that position for the same currency X with the broker that does not charge interest for carrying the trade. This way you will gain the interest or rollover that is credited to your account.

However there are many factors that you should take into consideration.

a. The currency to use. The best pair to use is the GBPJPY, because at the time of writing this article, the interest credited to your account will be 24 usd for every 1 regular long lot you have. However you should check with your broker because each broker credits a different amount. The range can be from $10 to $26.

b. The interest free broker. This is the hardest part. Before you open your account with such a broker, you should check the following: i. Does the broker allow opening the position for an unlimited time? ii. Does the broker charge commissions?

Some brokers charge $5 flat every night for each lot held, this is a good thing, although it seems not. Because, when the broker charges you money for keeping your position, the your broker will likely let you hold your position indefinitely.

c. Equity of your account. Hedging requires lots of money. For example, if you want to use the GBPJPY, you will need 20,000USD in each account. This is very necessary because the max monthly range for GBPJPY in the last few years was 2000 pips. You do not want one of your accounts to get a margin call. Do not forget that when you open your 2 positions at the 2 brokers, you will pay the spread, which is around 16 pips together. If you are using 1 regular lot, then this is around 145 usd. So you will enter the trades, losing 145 usd. So you will need the first 6 days just to cover the spread cost. Thus if you get a margin call again, you will need to close your other position, and then transfer money to your other account, and then re-open the positions. Every time this happens, you will lose 145 usd!

It is very important not to get a margin call. This can be maintained by a large equity, or a fast efficient way to transfer money between brokers.

d. Money management. One of the best ways to manage such an account is to monthly withdraw profits and balancing your positions. This can be done by withdrawing the excess from one account, take out the profits, and depositing the excess into the losing account to balance them. However, this can be costly. You should also check with your broker if he allows withdrawals while your position is still open. One efficient way of doing this is using the brokerage service withdrawals which is provided by third party companies.

Basic Strategies

There are many examples of successful traders using both fundamental and technical analysis. Which one you should choose is dependent on what you’ll be most comfortable with.

If you choose fundamental analysis exclusively, you have to follow current breaking news, indicators, as well as political trends to make money. Using fundamental analysis for trading calls requires deep understanding how the markets work and how the markets will react to news.

You can also analyze fundamental information with econometric tools to make trading calls.

If you choose technical analysis, you will have to learn a technical analysis trading style that suits you best. There are hundreds of technical trading styles to choose from with some using chart patters, others mathematical formulas, for example.

Most of the technical analysis rules have the benefit of being systematical, making testing a strategy on historical data comparably easy.

Advanced Strategies

There is a lot to learn from hedge funds for anyone willing to know more about forex trading strategies. These strategies are actually sub-strategies to the two basic strategies, fundamental and technical analysis.

Olsen, a Swiss finance research company, has classified hedge funds according to the trading strategies of each one. According to the company’s classification, there are currently four major trading strategies:

• Event driven

• Long/Short strategies

• Relative Value

• Tactical trading

Also, to learn about these strategies, mentoring programs may offer mentoring on a specific trading style, especially if you ask to be taught on a single line of strategy.

Risks of FOREX Trading

Despite the claims you may see on some FOREX web sites, FOREX is not risk-free. You are trading with substantial sums of money and there is always a possibility that trades will go against you. There are several trading tools, however, that can minimize your risk, and with caution, and above all education, the FOREX trader can learn how to trade profitably and while minimizing losses.ScamsFOREX scams were fairly common a few years ago. The industry has cleaned up considerably since then, but you still need to exercise caution when signing up with a FOREX broker. Do some background checking – reputable FOREX brokers will be associated with large financial institutions like banks or insurance companies and they will be registered with the proper government agencies. In the United States brokers should be registered with the Commodities Futures Trading Commission (CFTC) or a member of the National Futures Association (NFA). You can also check with your local Consumer Protection Bureau and the Better Business Bureau.RisksAssuming you are dealing with a reputable broker, there are still risks to FOREX trading. Transactions are subject to unexpected rate changes, volatile markets and political events.Exchange Rate Risk – refers to the fluctuations in currency prices over a trading period. Prices can fall rapidly resulting in substantial losses unless stop loss orders are used when trading FOREX. Stop loss orders specify that the open position should be closed if currency prices pass a predetermined level. Stop loss orders can be used in conjunction with limit orders to automate FOREX trading – limit orders specify an open position should be closed at a specified profit target.Interest Rate Risk – can result from discrepancies between the interest rates in the two countries represented by the currency pair in a FOREX quote. This discrepancy can result in variations from the expected profit or loss of a particular FOREX transaction.Credit Risk – is the possibility that one party in a FOREX transaction may not honor their debt when the deal is closed. This may happen when a bank or financial institution declares insolvency. Credit risk is minimized by dealing on regulated exchanges which require members to be monitored for credit worthiness.Country Risk – is associated with governments that may become involved in foreign exchange markets by limiting the flow of currency. There is more country risk associated with 'exotic' currencies than with major currencies that allow the free trading of their currency.Limiting RiskFOREX trading can be risky, but there are ways to limit risk and financial exposure. Every FOREX trader should have a trading strategy – knowing when to enter and exit the market and what kind of movements to expect. Developing strategies requires education - the key to limiting FOREX risk. At all times follow the basic rule: Do not place money in the FOREX that you cannot afford to lose.Every FOREX trader needs to know at least the basics about technical analysis and how to read financial charts. He should study chart movements and indicators and understand how charts are interpreted. There is a vast amount of information on FOREX trading available both on the Internet and in print. If you want to be successful at FOREX, know what you are doing.Even the most knowledgeable traders, however, can't predict with absolute certainty how the market will behave. For this reason, every FOREX transaction should take advantage of available tools designed to minimize loss. Stop-loss orders are the most common ways of minimizing risk when placing an entry order. A stop-loss order contains instructions to exit your position if the currency price reaches a certain point. If you take a long position (expecting the price to rise) you would place a stop loss order below current market price. If you take a short position (expecting the price to fall) you would place a stop loss order above current market price.As an example, if you take a short position on USD/CDN it means you expect the US dollar to fall against the Canadian dollar. The quote is USD/CDN 1.2138/43 - you can sell US$1 for 1.2138 CDN dollars or sell 1.2143 CDN dollars for US$1.You place an order like this:Sell USD: 1 standard lot USD/CDN @ 1.2138 = $121,380 CDNPip Value: 1 pip = $10Stop-Loss: 1.2148Margin: $1,000 (1%)You are selling US$100,000 and buying CDN$121,380. Your stop loss order will be executed if the dollar goes above 1.2148, in which case you will lose $100.However, USD/CDN falls to 1.2118/23. You can now sell $1 US for 1.2118 CDN or sell 1.2123 CDN for $1 US.Because you entered the transaction by selling US dollars (buying short), you must now buy back US dollars and sell CDN dollars to realize your profit.You buy back US$100,000 at the current USD/CDN rate of 1.2123 for a cost of 121,223 CDN. Since you originally sold them for CDN$121,380 you made a profit of $157 Canadian dollars or US$129.51 (157 divided by the current exchange rate of 1.2123).

Do You Have A Back Up Plan?

I know a woman in her sixties. She worked for a company for a little more than a decade as an administration and office assistant for a staff of one hundred sales people, who loved her dearly. She always made sure all the faxes got to their desks; the stationery stock was full and each staff member had what he needed.

Beyond her job description, she was like a mother to all of them: making sure the toilets got cleaned, old food was removed from the fridge and decorating the entire floor which the department occupied. She worked hard and never complained. She was always smiling, friendly and polite.

She felt good about being a 'mother' to all the people who entered and left that department. She was comfortable with her position. No-one else could do the things she did. And she did them better than anyone else in the building.

One day, she went to work as usual. After doing her morning chores, she was invited to the office, where she was told her services were no longer needed. The company was undergoing certain cost-cutting measures in every department and unfortunately, her role would have to be sacrificed. She was then asked to leave the building as soon as possible. She was assured, however, that before having made the decision, every attempt had been made to find a position for her somewhere within the company.

She has financial obligations to fulfil and she still hasn't saved enough for her retirement. She still has credit to pay off and she was saving for a trip overseas, something she never got around to doing in her younger years. She wanted to save up to establish a book-selling business. Suddenly, she would have to re-evaluate her plans. Losing a job and nearing retirement age, she will have to relinquish some of the things she had dreamt for herself.

I am sure you have heard hundreds of similar stories like these. Just five months before writing this article, I had already read about companies cutting costs by laying off jobs. Their main reason is to remain competitive, so they would not have to raise the prices they charge to their customers. Companies are outsourcing jobs overseas because the labour costs in other countries are relatively cheap compared to the local currency and sometimes because of significant skills or technological advantages. Other businesses lessen staff when sales drop and they can no longer sustain to pay the same number of people they have on their payroll. No organisation - not even a big, established business - is immune from the need to become leaner in an ever-increasingly competitive market environment.

In the past, most people believed the companies or the governments - whom they work for - could guarantee them a job for life. Nowadays, I think more and more people are becoming increasingly aware that expecting to have a job-for-life is unrealistic. It is a dire predicament to be working everyday, taking care of someone else's business and realising that at the end of one's career, years of service do not guarantee one's well-being. Because of this, I believe that people are now looking to improve their chances of having enough funds to meet their needs and wants after retirement.

I think there is a dawning awareness that the ultimate responsibility for one's own well-being lies within each individual. People are beginning to understand that their boss or the company they work for does not have an obligation nor the ability to ensure that they are taken care of when they finish working for them.

According to an article written by John Roskam(*), based on a forthcoming Institute of Public Affairs (IPA) Backgrounder on self-employment and the self-reliant society, the trend to self-employment will speed up in coming decades. Five reasons explain this change:

1. Our societies will continue to develop knowledge-intensive and service industries.

2. Jobs of the future need more education; however, better educated workers might opt to work for themselves instead.

3. Older workers are more comfortable with being self-employed than the younger workers, which might indicate individuals would prefer to work for themselves as they grow older.

4. Individuals want more control and flexibility over their working arrangements and self-employment allows for this.

5. Individuals are more willing to assume responsibility for the decisions that affect their lives and their families.

In addition to this trend, more and more people are now seeking to gain greater control over their financial assets.

What we can all learn from this article is the idea that we do not have to rely on our employers to be there for us when we desperately need them to pay us our periodic paycheques at the end of our working days. There are alternatives and, while we still can, I believe we owe it to ourselves and our families to have a back-up plan and look at every single opportunity available. The question for you is this: Do you have a back-up plan?