where do i begin?

Hello
I think this is good for you
Please read this article




Foreign Exchange Market
Currency exchange has always been and still remains important for conducting business and foreign trade. How it takes place and how the foreign exchange market actually works interests many people. And in order to exactly understand the essence and functions of the market, we should firstly reveal how it is formed and what it stands for.

History of Forex Market
The history of Forex market is marked by two particular events which put a deep stamp on its formation and development. These two historical events are the creation of Gold Standard System and Bretton Woods System.

Gold Standard and Bretton Woods Systems
Gold Standard System was formed in 1875. The main idea behind it was that governments guaranteed that a currency would be backed by gold. All the major economic countries defined an amount of currency to an ounce of gold as the value of their currencies in terms of gold and the ratios for these amounts became the exchange rates for these currencies. This marked the first standardized means of currency exchange in history. However, World War I caused a breakdown of the gold standard system as countries sought to pursue economic policies which would not be constrained by the fixed exchange rate system of the Gold Standard.
In July 1944 more than 700 representatives from the Allied nations brought forward the importance of a monetary system which would fill the gap left behind the gold standard. They arranged a meeting at Bretton Woods, New Hampshire, to set up a system that would be called the Bretton Woods system of international monetary management. The creation of Bretton Woods System led to the formation of fixed exchange rates as the United States defined the value of US dollar in terms of gold equal to $ 35 for one ounce and other countries pegged their currencies to the dollar. The US dollar became the main reserve currency and the only currency that was backed by gold. However, in 1970 the U.S. gold reserves were so depleted that it was impossible for the U.S. treasury to cover all the reserves held by foreign central banks.
In August 1971 the U.S. announced it would no longer exchange gold for the U.S. dollars that foreign central banks had in reserve .This was the end of Bretton Woods System and the beginning of Forex Trading System.

What is Forex Market?
The foreign exchange market, also known as “Forex” or “Fx” market, is a global decentralized marketplace where currencies are traded. It has no centralized marketplace where transactions are conducted. Rather, Forex trading is carried out electronically over-the-counter (OTC), meaning that all trading transactions are performed via computer by traders and other market participants over the world.
The foreign exchange market is the largest financial market in the world where the average daily turnover is continuously growing. Daily turnover of conversion transactions in the world is estimated at $4 trillion, 80% of which are based on speculative transactions with the intention to get profit from trading the exchange rate differences.
This kind of market scale means that the market liquidity, the amount of buying and selling volume occurring at a particular time, is extremely high. This is a very important factor that allows to easily buy and sell currencies, and especially from an investor’s perspective, to determine how easily the currency price can change over a certain time period.

How to Trade on Forex Market
The trade that takes place in Foreign exchange market involves simultaneously the buying of one currency and the selling of another. This is because the value of one currency is relative to the other currency and is determined by their comparison. From a retail trader’s perspective Forex trading is the speculation on the value of one currency relative to another.
Each currency pair can be thought of a single unit consisting of a “base currency” (the first currency) and a “counter (or quoted) currency” (the second currency) which can be bought or sold. It shows how much of the counter currency is needed to buy one unit of the base currency. So, in the EUR/USD currency pair EUR is the base currency and USD is the counter currency. If you expect the price of Euro to increase against the price of the U.S. dollar you can buy the EUR/USD currency pair. While buying a currency pair (going long) the base currency (EUR) is being bought, whereas the counter currency (USD) is being sold. Thus, you buy the EUR/USD currency pair at a lower price to later sell it at a higher price and as a result make a profit. If you expect the opposite situation, you can sell the currency pair (go short), meaning sell Euro and buy the U.S. dollar.
However, the risk is always there. If you buy Euro against the U.S. dollar, expecting that Euro is going to rise in price, but instead the U.S. dollar strengthens, you will then suffer losses. So, besides the benefit that you can make from trading, you should always consider the risk involved in it.
As you could see the foreign exchange market is not so complex to understand and not so dangerous to enter. You can become one of its participants in a few minutes and start earning money more than easily. How to learn Forex trading and specifically how to use the online trading platform are thoroughly presented on our website. You can read our educational materials and trading e-books which will help you understand the essence of Forex trading, discover its benefits, learn how to trade effectively and how to manage your risk.

Forex Market Hours
The foreign exchange market is extremely active all day long with price quotes constantly changing. It is the only market that truly operates 24 hours a day and five days a week. Currencies are traded in the largest stock exchanges and marketplaces all over the world: in Zurich, Hong Kong, New York, Tokyo, Frankfurt, London, Sydney and Paris. This means that across almost every time zone the market is active - when the market closes in the U.S. the trading day starts in Tokyo and Hong Kong.
The time flexibility is very convenient for traders who have a busy working schedule. They do not need to worry about market opening and closing hours and are free to arrange their trade anytime they want.
The chart below provides the working hours of major marketplaces.
Time ZoneTokyo OpenTokyo CloseLondon OpenLondon CloseNew York OpenNew York Close
Time (ET)7:00 pm4:00 am3:00 am12:00 pm8:00 am5:00 pm


Forex Market Participants
Foreign exchange market is composed of different participants, also called Forex market players, who trade on the market for quite various reasons. This means that participating in Forex market transactions does not take place simply for speculative purpose. Each of the participants plays its own role in the market providing the latter’s wholeness and stability.
The main players of the market are:

1. Governments and Central Banks
2. Commercial banks and companies
3. Hedge funds
4. Brokerage companies
5. Investors
6. Retail Forex traders
7. Speculators

1. Read a lot, start reading and for each term or word you do not understand, is curious and looking for meaning.

2. After some terms were understood, buscate to open a demo account, I recommend you do it in MetaTrader 4. Here begin a path of learning and applying what you learn.

3. If you feel that your girl stays demo account, switch to a real account.

4. Never stop reading about forex, stay in constant learning but do not lose the focus that your main goal is to win.

When I started trading, the most difficult for me was to choose the trading strategy and adjust to it.

In order to choose the right trading strategy, traders must consider a variety of factors, including account size, the amount of time that can be dedicated, personality, risk tolerance, and level of experience.

hi all,
I'm also a total newbie, I've been messing around with demo trading accounts and think I might have a reasonably sound strategy. So I'm about to graduate onto live accounts. I've been messing around with MT4 and am starting to get a feel for it. I would say my style of trading is a bit scalping/day trading, I prefer to hit a run with the trend. Can anyone recommend a good broker for me to test out my ideas with real cash. Probably one that does micro lots.
Thanks again in advance and sorry if I'm getting any terminology wrong

O

You wont find a shore thing its a bit like poker it boils down to probability find a strategy back test on major pairs you dont need to win every trade to be profitable it will depend on your risk reward ratio. dont rush into trading use a demo account for as long as takes to be profitable make it your goal to know everything before you risk any money. you will need to understand how to use indicators to follow most strategies so I would start there.

Begin by learning the basics and then training yourself on a demo account. Move onto a live account only after you've found a sound strategy that offers consistent profiting, and even then I would recommend to invest only a small sum to get used to trading with real money, and if it works out gradually increase that sum.

Hi,
Thanks for the advice. I'd like to find a broker that would suit my style of trading, then I'll use their demo account for a bit with their spreads so I can get a real world idea of how I'll perform. Are you able to advise on what attributes I should look for in a broker for scalping/more active trading? I've seen people mention 'ECN' but I dobn't know what that means, I'd also guess that fixed spreads would be good so that I can plan around it?? Cheers, O

exness demo accounts dont expire also have fixed pairs. ECN accounts are very good for trading high volatility news etc.
also they dont spy on your trades and shadow you

I strongly agree with the advice to start with demo accounts. It takes the average trader 5 to 10 years of practice to become profitable. There is no need to lose money all that time. Trade the demo exactly as you would live money, with the same trade size and amounts. You'd want to get three or four months in a row profitable in demo before going live. Then, only trade the very minimum cash of 0.01 lots per trade until you get 3 or 4 months profitable in a row live with real cash. At that point, perhaps 5 to 10 years down the road, you can come back and share a little with other newbies. Best success.

I agree. I was just telling a friend of mine who has been trading for 8+ years now and is still struggling with being consistently profitable that learning to trade Forex successfully from scratch takes longer sometimes than it takes to graduate from university. I was exaggerating a bit, perhaps, but I don't think I was too far from the truth.

One thing to point out at this juncture... i'm definately not here to get rich or to try to discover some genius methodology, all i want is to enjoy the thrill of 'gambling' with a few quid and if i'm up a few %, then i'm happy.

please download first from :
http://forexwinners.net/forex/steve-...-stick-charts/

I don't think that starting to trade with the specific goal to get rich in mind is a very good idea, as it can lead a person to taking unnecessary risks. Better to consider it an ever increasingly possibility as you learn more and gain more and more experience.

In the same boat with you buddy,sticking and adjusting to just one strategy isn't easy to do .The temptation of switching up different strategy comes off most times but then you realize and understand you need to stick and update the strategy as time goes on.

One advice guys: if you test some strategy at first try to understand its underlying principles which makes this strategy profitable. They should be clear, coherent and consistent with basic rules of supply and demand. Remember the rule of the Okkama razor: if you can explain something with long and short explanations, short will be always better.
Good luck

I agree. One should be able to understand the theory on which any strategy they use is built on. It's bad idea to use it blindly and without understanding, because if something goes sideways you should be able to adapt.

Recently I decided to learn about Forex. Have been doing a good amount of research on managing risk, managing emotions, and a bit on economic and political influences. I do have a few questions though:

1. What political and economic terms or ideas are important with forex? Just a few words will do, I have no problem doing my own research.

2. Has anyone tried trading outside of standard business hours? Does trading during or after business hours affect returns? I do know forex markets are open 24 hours, 5 days a week.

3. Would most agree that demo trading your strategy leads to a profitable trader?

4. Is it true that 'commissions' are included in the spreads?

5. Anyone know a good broker in Toronto, Canada?

Thank you for your time

1. I don't personally take news into account however look at the calendar on this website and you'll see what is expected to give an impact on the market however take this with a big grain of salt.

2. Every strategy is different. Some may work better outside of business hours and some may work better during business hours. That is something you will have to backtest yourself.

3. It depends on how you approach demo trading. If you trade a demo account without a tested plan and without a realistic amount and proper money and risk management all you're going to do is develop bad habits.
Some people do everything right in a demo account but end up failing because they can't handle the psychological effect trading can have on a person when trading a real account so nothing is sure.

4. Never had a real account that used commissions so I don't know. You'll have to look at the broker you want to start an account with to find that one out.

5. I won't give recommendations for brokers to anybody. Just look for a reputable broker.



If you have any further questions feel free to let me know.
-AntiVi

1. What political and economic terms or ideas are important with forex? Just a few words will do, I have no problem doing my own research.
=> Look at FF calendar. That is what I do.

2. Has anyone tried trading outside of standard business hours? Does trading during or after business hours affect returns? I do know forex markets are open 24 hours, 5 days a week.
=> This depends on what you call 'business hours' which will change based on your locality. The market changes its behavior depending on the time of day and the session which is ongoing at the time (London, NY, Aisa). It matters also what pair you're trading and if it is daytime in that part of the world at the time you trade that pair.

3. Would most agree that demo trading your strategy leads to a profitable trader?
=> I don't agree. You can make millions on a demo and do go on to do quite poorly on real money. In fact, it is more likely to happen that way than otherwise. You could be the smartest person in the world, once you open a live trade for the first time your heart will beat so fast that you will regress into a three year old just like we all have when we traded live the first time, and the second, and the third.... you get the idea. Part of the process that takes years is learning how to avoid turning into a complete monkey when you enter the market with your own live money.

Don't get me wrong. By all means start on demo before going live. But don't think for one second that just because you make money on demo that you can just flip that performance into a live account. I just doesn't work that way. I would suggest start on demo. Then move on to live and trade very small but live. You will see the difference which by the way will be all inside you.

4. Is it true that 'commissions' are included in the spreads?
=> Retail Forex charges the spread. There is no commission. (This may vary depending on your broker)

5. Anyone know a good broker in Toronto, Canada?
=> No idea.

Best of luck!

The main difference is in psychology approach. It is easier to cut losing positions while keeping profitable positions open on demo account - what presents main difficulty doing same on live. The solution for this is to trade only with trading plan where everything is calculated on math side, expectations, dispersions, how deep you can withstand losses when it comes to losing period.