Forex for beginner

Why Should I Learn Forex?

If you hear from anyone that making money in Forex is easy, do not believe. It is a myth. The truth is – being profitable in Forex requires a lot of work, dedication, learn, practice, more than a good discipline, sharp knowledge of money management and understanding of the psychology of the currency market. Learn Forex before you start Trading, because to Earn you should Learn Forex.

If you are ready to Learn Forex / start Forex Trading, then this blog is for you. Here you will learn all details about forex / forex trading,

1) You will learn what is Forex and how to trade forex.
2) You will learn forex strategy / forex trading technique / forex trick.
3) You will learn how to draw forex trendline.
4) You will learn how to determine support and resistance.
5) You will learn how to use forex chart / forex indicator for entry & exit in forex market.
6) You will learn about risk management & money management.
7) You will learn how to calculate forex profit / losses and MORE.

Learn Forex: What Is It And How Does It Work? -

The currency (foreign exchange) market is the largest and oldest financial market in the world. It is also called the foreign exchange market, or "FOREX" or "FX" market for short. It is the biggest and most liquid market in the world with daily average turnover of US$1.9 trillion, and it is traded mainly through the 24 hour-a-day inter-bank currency market - the primary market for currencies.

Foreign Exchange simply means the buying of one currency and selling another at the same time. In other words, the currency of one country is exchanged for those of another. The currencies of the world are on a floating exchange rate, and are always traded in pairs.

There are two reasons to buy and sell currencies. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency.

The other 95% is trading for profit, or what you call speculation. Investors frequently trade on information they believe to be superior and relevant, when in fact it is not and is fully discounted by the market.

Unlike the futures and stock markets, trading of currencies is not centralized on an exchange. Forex literally follows the sun around the world. Trading moves from major banking centers of the U.S. to Australia and New Zealand, to the Far East, to Europe and finally back to the U.S.

Currency Symbol / Currency Pair

EUR/USD = Euro / US Dollar

GBP/USD = Pounds Sterling/ US Dollar

USD/JPY = US Dollar / Japanese Yen

USD/CHF = US Dollar / Swiss Franc

USD/CAD = US Dollar / Canadian Dollar

AUD/USD = Australian Dollar / US Dollar

NZD/USD = New Zealand Dollar / US Dollar

Etc.

In excess of 85 percent of all daily transactions involve trading of the major currencies - Australian Dollar, British Pound, Canadian Dollar, Japanese Yen, Swiss Franc, and the U.S. Dollar.

Currencies are traded in pairs, meaning that you are really trading one currency for another. A simple way to understand this is to consider what you do when you go on foreign vacations. If you are an USA, and you plan to travel to another country, say Canada, then you might take say $10,000 USD to the bank to change it for Canadian dollars. Let’s say the exchange rate is 1.4000, then for your $10,000 USD they would give you $14,000 CAD. Now let’s say you didn’t spend the money and upon coming home you decide to change it back to USD currency. Now let’s say the exchange rate is 1.3700 (a change of 300 pips that could happen in a week), so your $14,000 CAD would convert back to $10,218.97 US. Therefore you just made $218.97, a 2.19% increase in funds.

Reading a FOREX quote may seem a bit confusing at first. However, it's really quite simple, when you see Forex quotes you will actually see two numbers. The first number is called the bid and the second number is called the offer/ask. If we use the USD/JPY as example 115.37/115.40 the first number 115.37 is the bid price and is the price traders are prepared to buy USD against the JPY. The second number 115.40 is the offer price and is the price traders are prepared to sell the USD against the JPY.

Here in USD/JPY the currency listed first (USD) is the base currency and & the value of the base currency is always 1. A quote of USD/JPY 115 means that one U.S. dollar is equal to 115 Japanese yen. When this currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote increases from 115 to 117, it indicate dollar is stronger because it will now buy more yen than before.

What Next

Well now we have a basic understanding of how Forex market works what next? Now you are going to decide best way to trade the Forex market. The most common approaches are Forex fundamental analysis and Forex technical analysis.

Forex Fundamental analysis: Usually everyday, and often more than once a day, the currency pair will be moving along slowly (sideways movement, consolidation) and then all of a sudden it JUMPS! It very quickly moves up ten or more pips, usually in just a minute, and often continues to move strongly for another hour or so. This is due to the release of a “Fundamental Announcement”, and of course any experienced trader should understand that they usually create a market movement.

Forex Technical Analysis: It is technique to learn Forex market using chart and indicator to predict the future price of a security.

WHAT YOU NEED

**BROKER:

1: A broker that provide good platform to trade Forex. MARKETIVA provide very good platform for Forex trading and also give $5 free to open an account.

2: If you are ready to deposit at least $100 then ForexYard is best because they provide 100% bonus on first deposit upto $300.

Deposit $100, receive free $100 and start trading with $200

Deposit $200, receive free $200 and start trading with $400

Deposit $300, receive free $300 and start trading with $600 

3: You can try Plus500 they provide $20 free with No Deposit required.

**Learn Forex Money Management and Risk Analysis:

However, it is common that one afraid of being involved in Forex market because of high risk in this trading field. Although every capital market involves certain level of risk, the risk of loss in foreign currency trading market can be extensive. It would be wise to learn about the potential risk (and managing it) if you wish to trade in Forex market.

Best Forex Platform

foreBroker	Options	Votes	Avg. Rating	Weighted Avg. Rating	Reviews
Interbank FX	Rate	4	8.8	7.6	Interbank FX Reviews
Dukascopy	Rate Compare Free Demo	1	10.0	6.9	Dukascopy Reviews
FXCM Micro	Rate	1	10.0	6.9	FXCM Micro Reviews
CitiFX Pro	Rate	1	8.0	6.1
Etoro	Rate	1	8.0	6.2
FxPro	Rate	1	8.0	6.2	FxPro Reviews
PFG Best	Rate	1	8.0	6.2	PFG Best Reviews
AAAFx	Rate Compare Free Demo	4	6.3	5.9	AAAFx Reviews
MB Trading	Rate	6	6.0	5.8	MB Trading Reviews
Saxo Bank	Rate	3	5.0	5.1	Saxo Bank Reviews
Ava FX	Rate	3	4.3	4.7	Ava FX Reviews
Oanda	Rate	6	4.3	4.6	Oanda Reviews
CMC Markets	Rate	1	3.0	4.5	CMC Markets Reviews
MIG Bank	Rate	2	3.5	4.4	MIG Bank Reviews
FXCM	Rate	5	3.8	4.2	FXCM Reviews
Alpari	Rate	3	3.0	3.9	Alpari Reviews
Gain Capital	Rate	1	1.0	3.9	Gain Capital Reviews
Forex.com	Rate	4	3.0	3.8	Forex.com Reviews
GCI Financial	Rate	2	1.0	3.1	GCI Financial Reviews
GFT Forex	Rate	2	1.0	3.1	GFT Forex Reviews
Totals & Averages:		52	5.3	5.2

Forex Broker Reviews

Top Forex Brokers 2011

Our forex broker reviews list only the most reputable and best online forex brokers. The choice of which forex broker to choose can be very confusing, especially for inexperienced traders. Our broker reviews focus on what really matters to traders; what is the minimum account size, what leverage is offered, what platform does the broker offer and much more.

1		Regulator: FSA Leverage: 200:1 Min. Deposit: $100 Spread: 1.5 pips*	$2,000 Max. First Deposit Bonus	Sign upRead Review
2		Regulator: FSA Leverage: 50:1 Min. Deposit: $100 Spread: 2 pips	$2,000 Max. First Deposit Bonus	Sign upRead Review
3		Regulator: ASIC Leverage: 500:1 Min. Deposit: $100 Spread: 3 pips	$2,500 Max. First Deposit Bonus	Sign upRead Review
4		Regulator: FSA Leverage: 400:1 Min. Deposit: $100 Spread: 3 pips	$1,200 Max. First Deposit Bonus	Sign upRead Review

- LEVERAGE: Controls the equity you need to take a margin position. E.g. 50:1 leverage means you can take a $5,000 trade with just $100 in your account. Note that a high degree of leverage can work against you as well as for you.
- Leverage over 50:1 for majors and 20:1 for minors is not available to traders in the U.S.
- As indicated in the list, only NFA regulated brokers are available to U.S. customers.
* Broker offers variable spreads which means that the spreads are subject to current market conditions.
  

Finding the best forex broker – FAQ

Forex brokerage is the one of the newest domains of the financial services industry. It offers many unexploited opportunities to enterprising traders, but naturally comes with a few unique problems of its own. While analysis and forex strategies are crucial in the long run for achieving the great returns desired, the first task faced by a forex trader is finding the best personal choice among the forex brokers out there so that trading with a calm mind becomes possible, away from worries about the honesty and competence of the firm.

How do you find the best forex broker? There’s no magic trick to do all the scrutiny for you; of course a period of search and study is necessary. To ease your burden, and help your task, here we provide you with a list of what to seek from your forex broker, so that, even as a beginner, you don’t feel like the duck in the desert.

Regulation and Security

Our number-one concern is of course the safety of our deposits, and the honesty of our broker. Fail at this first step, and the sad fact is that no amount of successes will prevent your budding career from turning into a miserable disappointment. Fortunately, the guidelines to be followed in seeking a safe broker are simple and straightforward. Although you can do your own due diligence in finding out about a firm’s background by checking online forums, asking questions to the firm itself, and contacting the authorities, there are two things that you must know about in all cases. Is the firm regulated by government authorities? Second, does it implement state-of-the-art technologies for ensuring the safety of your personal information and account details from unauthorized access?

The regulatory bodies in the U.S. are the NFA and the CFTC. Usually, a broker will have a disclosure statement in the “About Us” section of the site, and at the bottom of every page stating its membership of the NFA, in the US, and its being subject to the regulations of the CFTC. In Europe, each nation has its own regulatory body. The UK has the FSA, while Germany, Cyprus, and the Netherlands all have their own regulatory institutions. Make sure that your broker is regulated by them. Never open an account with a firm that is not regulated by a recognized body, however tempting its offer may appear to be.

To read more about local regulations we recommend the following articles.

Forex Broker UK
Forex Broker Canada
Forex Broker New Zealand
Forex Broker Australia
Forex Broker Hong Kong
Forex Broker India 
Forex Broker Israel
Forex Broker Malaysia
Forex Broker Pakistan
Forex Broker Philippines
Forex Broker Singapore
Forex Broker South Africa

The other aspect of account safety is encryption, and the physical safety of your account data against theft. Firms like Markets.com, and Finexo take great care about these aspects of safety, but there are also many others that assume a proactive attitude to this crucial side of running a brokerage business. To aid our task, technologies like SSL-encryption are standard in the business nowadays, and if you don’t see them implemented, it is time to depart for better, more serious brokers.

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Commissions and spreads

The lower they are, the better. Low and fixed spreads are what we seek from our forex trading brokers. In general, paying anything more than 3-pips in the EURUSD pair is not a good idea, and there are some firms offering spreads as low as a single-pip in this most liquid pair. Research your broker’s website and make sure that you fully understand the spreads and commissions charged and carefully weigh pros and cons against each other. Just a low commission should not alone be the deciding factor.

Initial deposit

The initial deposit requirement for your forex broker account should be low. But whether you benefit from depositing a really small amount depends on other factors such as minimum lot size, and leverage or margin requirements. A mini account that requires lot sizes of $10,000 cannot be traded very effectively with a $50 initial deposit. You need some buffer area, so to speak, where market fluctuations can be absorbed. That said, the smaller the initial deposit the better, because it is your risk capital, and you don’t want to risk too much in any single trade.

Many brokers offer different channels for funds deposits. Credit card and wire transfers, as well as deposits via NeTeller, or PayPal are accepted at many of the more competent firms. The size of the minimum deposit varies from firm to firm, but it is usually between 50 and 500 in a mini account. A standard account will require something around $1,000-2,000 in most cases.

Risk disclaimer: Forex trading involves substantial risk of loss and is not suitable for all investors. You may lose more than your initial investment.

Leverage and margin requirements

Keep leverage low. Try to choose a broker that offers leverage as low as possible at the first stage. It is possible to keep your leverage artificially lower than the minimum level offered by just trading with a portion of your account value. If you have $1,000 deposited with a broker that demands 100:1 minimum leverage, you can keep your leverage as low as 10:1 by just trading one mini ($10,000) lot with your account. On the upside, leverage is a matter of taste, so whether it is 400:1 or 200:1 is for you decide. Just make sure that you don’t play a game of Russian Roulette by taking such high leverage at the beginning stages of your forex trading career. Please understand that increasing leverage increases risk. In the U.S. the maximum leverage is 50:1 for majors and 20:1 for minors.

Forex trading platform and software offer

There are so many things that can be said about a good forex trading platform depending on your trading style and risk tolerance level, and there is a vast selection of forex platforms to choose from. In general though, the platform should present a comfortable interface with a calm color selection, and the more customization options available, the better. To test the software at the early stages of your trading, make sure that you open a demo account to have a good experience of what is on offer by the broker.

Does the platform facilitate automated trading? Does it let you use scalping strategies? How about the charting package? Does it provide your favorite technical tool? If you’re a fundamental trader, does the system provide news flow from a credible financial news provider? How about trade alerts, and mobile trading? There are naturally a lot of things that you could demand from the forex platform, and it all depends on your trading style. If you’re a pure beginner, we can recommend the MetaTrader platform. It is very popular, widely available, and once you get used to it you’ll have learned a lot about trading already. The MetaTrader platform may appear complicated at first, but it is only a matter of practice, not innovation, or genius before you get the hang of it.

Currency pairs offered

Although there are a large number of countries in the world, and consequently many currencies available for trading, the fact of the matter is that a handful of majors, and the currencies of a few growing nations in the world, such as the Brazilian Real, or the Russian Rouble, often define the tone of trading in the global market. So the number of currencies available is not as important a point as it might appear. Still, if you have to trade your national currency, about which you’re most knowledgeable, in a liquid environment, the availability of different options may become an important point.

Also, if you like to employ special strategies about pegged currencies such as the HK dollar, or the Danish Krone, you will naturally want to look for these as you examine the broker. Similarly, traders interested in the Chinese Yuan will have to do some search because the currency is not convertible, and is not widely available for trading.

Customer support

This is where you turn to when there’s a dispute or problem, so the friendlier, more patient, and understanding they are, the better. Customer support should preferably never be an issue when you’re trading with one of the best forex traders. Their systems run smoothly, and if there’s a technical error, they will be swift to recognize and mend it, sometimes on their own. But to make sure that you are safe, it is always a good idea to make a call, even before you have any real intention of opening an account, to see the quality, and endurance of the customer support staff.

24-hour support can also be very important if you’re not from North America. Remember that the forex market is active 24-hours a day. So your working hours may not coincide with that of the support staff, unless it is available throughout the day.

Beginner’s Support

Attitude to the beginner differs among brokers. The demands and needs of a beginning trader are not the same as those of a professional or experienced trader, so even brokers themselves may implement different account packages for different types of clients. As a novice, it’s a good idea to seek a firm that makes educating beginners a major part of its mission and business strategy as a forex broker. Some firms go so far as to offer one on training, while others offer the so-called webinars, and abundant online material for your education. Yet others employ real, professional traders in the customer support. It is up to you to define your own experience level, and decide about what you expect from your broker in this respect.

Summary

Choosing the right broker is clearly the most important, albeit basic aspect of being a successful forex trader. By asking the relevant questions about the issues we listed in this FAQ, you will have a more systematic, and thorough approach to this matter, and with a little effort, chose the broker that is right for you. The best luck in your new career.