Monthly Archives: March 2012

Getting Started with Forex Options

Getting Started with Forex Options Thanks to the Internet and the abundance of resources available, getting started trading with Forex options couldn’t be much easier. While it’s possible to earn extra cash, make a living and even get wealthy by trading Forex options, there are some key pieces of information that you should know before you get started.

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Forex Money Management

Forex Money ManagementThere are a significant number of Forex traders who possess many of the elements necessary to speculate successfully in the foreign exchange currency market (Forex). They are quite adept at interpreting price chart data and determining when prices will continue or reverse a trend, remain in a sideways channel or break that channel with exuberance.

They also seem to exhibit a significant degree of the intuition that must be combined with technical skills in order to know when to trade in accordance with the signals the indicators are supplying or when it is appropriate to trade counter to those signals.

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The Cost of Forex Trading

The Cost of Forex TradingYou may occasionally hear Forex trading referred to as a zero-sum game, meaning that for every winning trader, there is a losing trader that has lost precisely what the winning trader won. This idea needs to be expanded to include the possibility that it might require many losing traders to compensate one large winning trader.

The idea of Forex trading being a zero-sum game, however, is in reality a fallacy because Forex trading is worse than a zero-sum game. This is because the total profit of all winning trades is reduced by the cost of trading Forex, while the cost of all losing trades is added to that loss.

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Forex Trading with the Martingale Strategy

Forex Trading with the Martingale StrategyForex traders are constantly admonished to never add to a losing trade.

The rigidity of this rule if followed scrupulously when speculating on currency values should produce the effect of keeping every loss small and manageable, but it does mandate that there will be a lot of these small losses.

This fact of life of Forex trading compels many traders to consider the potential of using the Martingale Strategy during the course of their trading activities.

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Interest Rate Parity and Forex Trading

interest rate parity and forex tradingThe subject of using interest rate parity for the purpose of forecasting currency pair prices definitely belongs in the category of fundamental analysis, which implies that its usefulness as a price indicator is primarily geared toward longer term trading. For technical traders, it could be used to provide a long term view of the market, that when combined with one or more technical analysis techniques, could provide insights into price direction that could be valuable to devising a forex trading strategy.

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Tricks of Successful Forex Traders

tricks of successful forex tradersNew, and even experienced Forex traders, are seemingly always on the lookout for shortcuts and tricks that will make them successful Forex traders. The reality is that Forex trading is hard work, so the first trick at which you will need to gain expertise, is persistence.

Persistence simply means discovering what tactics and strategies work best for you and then repeating them over and over. Persistence is good as long as repeated activity produces positive results. Repeating the same mistakes over and over is not persistence, it is stubbornness. Learn to recognize the difference.

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Forex Trading with the US Trade Balance Figures

Forex Trading with the US Trade Balance FiguresUsing the United Sates balance of trade figures to forecast the exchange rates between currencies would have to be considered as a fundamental analysis technique that could have value for forex traders.

The theory behind using these figures is simple. When an economy is in a position of a trade deficit, the value of that country’s currency will decline in comparison to that of an economy where a trade surplus is present. This has the effect of making the goods and services of the economy with the surplus more expensive, which will influence a swing toward a return to a balance between the two economies that usually results in an overcorrection in the other direction.

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Retail Forex Spreads

Retail Forex SpreadsTrillions of dollars’ worth of currency change hands every day in the foreign exchange currency market (FOREX).

Governments, international banks, and multi-national corporations trade their native currencies for the currencies of the foreign countries where they are doing business. These entities attempt to make the exchange when it is most favorable to them. This is the wholesale level of Forex trading. It takes place because of the absolute necessity of swapping currencies in order to fulfill some financial obligation with the preferred currency of the party receiving the payment.

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Becoming a Successful Part Time Forex Trader

becoming a successful part time forex traderMany people who are interested in trading Forex wonder whether or not it can be done on a part-time basis.

The response to that question is a most emphatic: Yes!

There are even reasons why trading Forex part-time may be preferable to jumping in and trading full-time right from the start. Many people have full-time jobs and careers, along with family and other time commitments that completely preclude full-time Forex trading. There are several approaches that can be taken to trading Forex on a part-time basis and some of them are here further discussed.

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Technical Analysis in the Forex Market

forex fundamental and technical analysisForex traders spend the majority of their time analyzing the foreign exchange currency market (FOREX) in an attempt to properly forecast the direction the price of a currency pair will take. There are two main approaches to this analysis: fundamental and technical.

Fundamental analysis is done using a longer time frame and also gives more weight to news events and economic data releases that are expected to have an effect on prices. The effects of weather and political happenings also play a major role.

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