What is margin?

Margin is a performance bond, or good faith deposit, to ensure against a

trading losses. The margin requirement allows traders to hold a position much 
larger than the account value. 
In the event that funds in the account fall below margin requirements, your require
broker will close some or all open positions. This prevents clients' accounts 
from falling into a negative balance, even in a highly volatile, fast moving 
market. 

For example, let's say you have an account with $10,000. That means you have $10,000 of usable margin. If you use $7,000 to Ask 7 lots o f USD/JPY, you now have $3,000 of usable margin left, meaning that you are allowed to lose $3,000 before you are under the margin requirement. The account equity remains at $10,000 until you begin to make or lose money on the position. Now, if the USD/JPY decreases to the point that you end up losing the $3,000 which is left in your account, then the broker will close all of your positions to ensure that you do not lose more than you have in your account.

Advantages of trading the Forex Market

• High Leverage (low margin): Generally forex brokerage service providers offer a
leverage of 100:1. This means for every $1,000 you place in your account you have
access to trade with $100,000 worth of contracts.
The traders can utilize a small amount of funds in order to take a large position. If you
should happen to incur a loss, your broker will close your position when the loss equals the balance in your account.
• Liquidity: The forex market trades between $1.5 and $2 trillion daily. The market
orders are almost filled instantaneously and the market is too large for any one to
control.
• 24 Hour trading: The forex market operates 24 hours a day from Monday morning
Sydney – Australia time to Friday evening New York (EST) time. Therefore traders
have immediate access to information, their accounts and transaction ability. 
• Trade both sides of the market: You can profit from price movements in either
direction, whether prices are going up or down. You can profit in a bear or a bullish
market and the economy of any country is irrelevant to make profits.
• Low trading costs: Forex brokers will only charge you for the difference of a bid and ask price.
sell price quote. There are no commissions or other charges payable buy the trader.

Forex for Dummies

Forex Basics

If you've already read the "What is Forex?" section then you should know what Forex market is and what it is all about. If not, please, do it. There are five essential aspects of foreign currency market a beginner trader (and an old one as well) should be aware of:

Forex Fundamental Analysis

Forex Technical Analysis

Money Management

Forex Trading Psychology

Forex Brokerage

Understanding and mastering these sides of trading are crucial to organize your Forex trading experience.

Forex Fundamental Analysis=>

Fundamental analysis is the process of market analysis which is done regarding only "real" events and macroeconomic data which is related to the traded currencies. Fundamental analysis is used not only in Forex but can be a part of any financial planning or forecasting. Concepts that are part of Forex fundamental analysis: overnight interest rates, central banks meetings and decisions, any macroeconomic news, global industrial, economical, political and weather news. Fundamental analysis is the most natural way of making Forex market forecasts. In theory, it alone should work perfectly, but in practice it is often used in pair with technical analysis. Recommended e-books on Forex fundamental analysis:

Reminiscences of a Stock Operator

What Moves the Currency Market?

Forex Technical Analysis=>

Technical analysis is the process of market analysis that relies only on market data numbers - quotes, charts, simple and complex indicators, volume of supply and demand, past market data, etc. The main idea behind Forex technical analysis is the postulate of functional dependence of the future market technical data on the past market technical data. As well as with fundamental analysis, technical analysis is believed to be self-sufficient and you can use only it to successfully trade Forex. In practice, both analysis methods are used. Recommended e-books on Forex fundamental analysis are:

The Law Of Charts

Candlesticks For Support And Resistance

Trend Determination

Money Management in Forex

Even if you master every possible method of market analysis and will make very accurate predictions for future Forex market behavior, you won't make any money without a proper money management strategy. Money management in Forex (as well as in other financial markets) is a complex set of rules which you develop to fit your own trading style and amount of money you have for trading. Money management play very important role in getting profits out of Forex; do not underestimate it. To get more information on money management you can read these books:

Risk Control and Money Management

Money Management (A chapter from The Mathematics of Gambling)

Forex Trading Psychology=>

While learning a lot about market analysis and money management is an obvious and necessary step to be a successful Forex traders, you also need to master your emotions to keep your trading performance under strict control of mind and intuition. Controlling your emotions in Forex trading is often a balancing between greed and cautiousness. Almost any known psychology practices and techniques can work for Forex traders to help them keep to their trading strategies rather to their spontaneous emotions. Problems you'll have to deal while being a professional Forex trader:

Your greed

Overtrading

Lack of discipline

Lack of confidence

Blind following others' forecasts

These are very professional books on psychology written specially for financial traders:

Calming The Mind So That Body Can Perform

Emotion Free Trading

The Miracle of Discipline

Forex Brokerage

Every Forex trader like any other professional needs tools to trade. One of these tools, which is vital to be in market, is a Forex broker and specifically for Internet - on-line Forex broker - a company which will provide real-time market information to trader and bring his orders to Forex market. While choosing a right Forex broker things to look for are the following:

Being a professional company you can trust

Provide you with real-time quotes

Execute your orders fast and accurately

Don't take a lot of commissions

Support the withdraw/deposit methods that you can use

For beginning Forex traders I recommend these four brokerage companies that are probably the best Forex brokers to start with:

FXOpen — one of the most popular and progressive brokers with MetaTrader platform and comfortable trading conditions for all kind of traders.

InstaForex — a reputable MetaTrader 4 brokers, allows Islamic Forex trading accounts, while you can deposit and withdraw money via WebMoney.

FXcast — good because you can start trading Forex with as little as 10$, use MetaTrader 4 platform and the dozoen of various deposit and withdraw methods, including WebMoney, e-Bullion and wire transfer.

LiteForex — broker that supports MetaTrader 4 Forex trading platform and doesn't require a lot of money to start with.

Forex Earning Potential

Forex currency exchange trading is one of the fastest growing trade markets in the world. It is also the biggest with an estimated 1.8 trillion dollars being exchanged every single day.

With these stats to it's name it should come as no surprise that one of the major reasons for thisexponential growth is the fact that Forex trading offers incredible earning potential.

This is also why large multi-national corporations have been investing in foreign exchange for years and more and more individuals are utilizing currency trading to supplement their incomes and some are even living purely off the profits they make.

Forex & Financial Problem

Having a diversified portfolio is key to successful financial planning and having some funds in higher risk areas makes sense too. Whether you choose Futures, Options or Foreign Exchange trading, all are good ways to expand this section of your portfolio.

If you are looking at Forex, then an excellent tool is to use a proven automated pilot program. Trading programs have evolved considerably since their advent several years ago and now you can find several programs that are very sophisticated and are reasonably priced. The latest one to have broad appeal is Fap Turbo. One of the many attractions this software has is it’s track record of trading live accounts. Fap Turbo also has a very good support community and you can participate actively via phone and email. Although the program is easy to set up and use, it is always reassuring, if nothing else, to be able to contact people who can help you out if you are having any problems.

Forex Trading Online

Until you really get into Forex trading online, it will be really difficult for you to understand the true meaning of the title of this article. I will tell you a true story, and I believe myself to be a reasonably sane person, although after you read this story you might not think so.

I am a professional currency trader now who makes a real good living doing it. It was not always that way; I will tell what currency course that provided my first way to let me make consistent money online and started my new career in a second, but for now back to the story.

This is the story, and I could not make this up if I tried. I wish I did make it up; I would not look like such an idiot then. I am about two years into my new career and I make the biggest killing I ever made on a trade, I am talking like in the high six figures, on a low five figure investment. By the way, the Forex markets are the only place that provides you this type of leverage that permits you to make those types of Return on Investments (ROI) in such a short period.

Well, I am on top of the world, I think I am the smartest person ever on earth. I am going to be the next Warren Buffet. Then fifteen minutes I lose an amount in the low six figures on another trade. I lost this much, because I did not utilize the defensive techniques that you can learn in many Forex courses at that time. I do now, I learned my lesson.

So this is what I did; I pick up the computer monitor and I had a big one, a 21 inch model and this was not these new flat screens we all have now, this was one of the olds ones, that were heavy. My office is on the second story of our house and the room has a big double window in it. I throw the monitor right through the window. As if that was not enough, I then go get the computer and throw it through the other window. By the way, they hit right in the middle of the concrete patio outside the windows, at least I am a good shot. I really could not miss, to tell you the truth.

My wife’s comes in screaming, the kids are crying, the neighbors start banging on the front door. Everybody wants to know what’s going on? WOW, oh, WOW, this was a big mistake on my part. After all, I still made a mid six figures income that day; I thought of that afterwards, I just did not think of it at that time.

You should never do this for the following reasons.

A) You just have to pay to have the windows fixed.

B) You have to buy a new computer and monitor.

C) You have to clean everything up, because your wife is sure not going to do it. She is so mad at you at this time, she is thinking of divorcing you.

D) Your kids think there dads a crazy person.

E) You neighbors think there living next door to a lunatic.

Those are just some of the reasons not to do it, there are many more. But, that all happened in one day of Forex trading online. The currency class that first taught me how to make money every month in the markets is called Forex Trading Made E Z. You can check out its website and see if you’re into it. That’s my story for the day, the moral of it all is, what ever happens in the market that day, there is always another day. And NEVER but NEVER throw your computer out the window.

Forex Trade Software

When you first come across the idea of automated Forex trading how did you react? Pessimistic is how most people react. Well if you were optimistic or pessimistic but curious I would like to congratulate you! The truth is Forex trading software will work for you, as it has worked for thousand other people. Those people are now enjoying extra income without doing anything. Many of them have actually quit their old job and living solely from automated Forex trading software. Why did they quit their job? Because they do not need them since trading Forex is more than enough to cover their expenses.

You must be wondering how Forex trade software performs such task. Did you know that foreign currency actually behaves according to a certain pattern? Researches on these patterns have been conducted in many universities. They actually found out that while erratic, Forex movements can be predicted to a certain extent. The researches have reached a point where the predictions become so accurate therefore it is very profitable. So experts simply compile these formulas and knowledge into Forex trade software.

So what you need to do to start getting your automatic income? Well glad you asked! Simply download the software, setup the software according to how you want it to work, and sit back. You can start seeing the results in few days time. The settings can vary between programs and some programs can be switched between semi automatic and fully automatic. Simply follow the instructions given for your software.

How is Forex traded?

The mechanics of a trade are virtually identical to those in other markets. The only difference is that you're buying one currency and selling another at the same time. That's why currencies are quoted in pairs, like EUR/USD or USD/JPY. The exchange rate represents the purchase price between the two currencies.

Example: the EUR/USD rate represents the number of USD one EUR can buy.

If you think the Euro will increase in value against the US Dollar, you buy Euros with US Dollars. If the exchange rate rises, you sell the Euros back, and you cash in your profit. Please keep in mind that forex trading involves a high risk of loss.

Forex Quotes

Reading a foreign exchange quote is simple if you remember two things:

The first currency listed is the base currency

The value of the base currency is always 1. As the centerpiece of the forex market, the US dollar is usually considered the base currency for quotes. When the base currency is USD, think of the quote as telling you what a US dollar is worth in that other currency. When USD is the base currency and the quote goes up, that means USD has strengthened in value and the other currency has weakened. Rising quotes mean a US dollar can now buy more of the other currency than before. Majors not based on the US dollar The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). For these pairs, where USD is not the base currency, a rising quote means the US dollar is weakening and buys less of the other currency than before. In other words, if a currency quote goes higher, the base currency is getting stronger. A lower quote means the base currency is weakening. Cross currencies Currency pairs that don't involve USD at all are called cross currencies, but the premise is the same. Bids, asks and the spread Just like other markets, forex quotes consist of two sides, the bid and the ask: The BID is the price at which you can SELL base currency.The ASK is the price at which you can BUY base currency. What's a pip? Forex prices are often so liquid, they're quoted in tiny increments called pips, or "percentage in point". A pip refers to the fourth decimal point out, or 1/100th of 1%. For Japanese yen, pips refer to the second decimal point. This is the only exception among the major currencies.

What is Forex?

The currency trading (FOREX) market is the biggest and the fastest growing market on earth. Its daily turnover is more than 2.5 trillion dollars, which is 100 times greater than the NASDAQ daily turnover. Markets are places to trade goods. The same goes with FOREX. The Forex goods (or merchandise) are the currencies of various countries. You buy Euro, paying with US dollars, or you sell Japanese Yens for Canadian dollars. That’s all.

How does one profit in Forex?

Very simple and obvious: buy cheap and sell for more! The profit is generated from the fluctuations (changes) in the currency exchange market.

The nice thing about the FOREX market, is that regular daily fluctuations, say - around 1%, are multiplied by 100! (in general, Easy-Forex offers trading ratios from 1:50 to 1:200). If, for example, the exchange rate of “your” pair of currencies increased by 0.6% in the last 4 hours, your profit will be 60% on your investment! Such can happen in one business day, or in a few hours, even minutes.

Moreover, you cannot lose more than your “margin“! You may profit unlimited amounts, but you never lose more than what you initially risked and invested.

You can implement your choice (the pair of currencies, the volume amount) under any direction to which the market is moving, and yet make profit. It does not matter whether the exchange rate is going up or down: you can always decide to buy Euro and sell dollar, or vice versa - buy dollar and sell Euro. You don’t have to physically possess certain currencies in order to perform “buy” or “sell” with them.