All about forex trading

[BlackCryptoKnight]

Could someone explain what exactly foreign exchange trading entails?

[AngelsKiss]

Could someone explain what exactly foreign exchange trading entails?

BCK...It depends on what kind of transaction you are doing (spot, forwards, futures, swaps, options, etc) but basically its trading one currency for another.

There is also the currency speculators, which are those individuals who basically try to determine which way a dollar may go, up or down..e.g. hedge funds.

[gucci man]

bck, 4x trading is nice. But when u start making consistent money it becomes boring.
If it excites u, then u are gambling

[CyberCat]

Bck, check this site: www.forex.com

[recursion]

Bck, check this site: www.forex.com

or babypips.com .

[BlackCryptoKnight]

BCK...It depends on what kind of transaction you are doing (spot, forwards, futures, swaps, options, etc) but basically its trading one currency for another.

There is also the currency speculators, which are those individuals who basically try to determine which way a dollar may go, up or down..e.g. hedge funds.


bck, 4x trading is nice. But when u start making consistent money it becomes boring.
If it excites u, then u are gambling


Bck, check this site: www.forex.com


or babypips.com .

Thanks for the info people. That babypips.com site is good. Thanks recursion.
I will read and absorb what I can. I'm no financial whiz, so it may take a while for me to get it. But I'm interested in finding out how it works and to determine whether some of the things I've been hearing about it are true or not.

[Chris]

... But I'm interested in finding out how it works and to determine whether some of the things I've been hearing about it are true or not.Like what? The high interest rates? I'm also interested to hear from persons with FIRST HAND experience from trading, that is, who trade for themselves.

[gucci man]

Ok chris, since u ask.

Learning to trade forex can be summed up in three phases.

1. The excitement phase
this is when u just started your forex lessons, open your first demo account and your returns on the demo account is like whopping 120% a week or something like that. You immediately feel as if u are well knowledgeable and are ready for the Live account.

2. The first Epiphany
Your live account is losing. In fact, you start losing miserably on your live account as your conscience takes over logics. You wonder what has changed since u went live with real money. You realize that you learned only a little and that u have lots more to learn.

3. Decision
Either you quit, or u go back to demo and do more research and studies

4. Second Epiphany
You realize that half of what u learned is crap! You realize that many of these Pay-per-learn forex lessons are scam. You learn that many of these pay-per-advice gurus are not real traders. You realize and know the Micro-architecture of the market and how prices move. You realize that even though the market is a 2 trillion dollar market, half of it is leveraged and there is stil la liquidit problem. You realize that most brokers dont use STP and are bucket shops. You realize how stupid you were in phase 1. You realize that in order to make great returns every month, u need to trade less more consistent and use proper MM

5. The boredom and money making
Trading is no longer exciting. You know where the prices may go and u either win or lose little. You realise that u dont even need a single indicator to help u analyse price action. Your live account is growing consistenly



I'm in between phase 4-5

P.S- If u might need to open a forex thread so i answer all your questions once i have knowledge of the answer

[BlackCryptoKnight]

Like what? The high interest rates? I'm also interested to hear from persons with FIRST HAND experience from trading, that is, who trade for themselves.

Yes, like the high interest rates, and also whether there is some "hanky panky" going on or whether it is above board.

[silentburn]

Hey Gucci man, I tried a demo account about a year ago, I didn't really get it though and I kind of lost interest and now I'm sorry i didn't keep it up.

How long did you use the demo account? I'm going to start another demo account and see if I can understand how this thing works.

Things I never got:


How long does a transaction last, does one have to complete all transaction at the end of a day? From your experience what's the average time taken to close a deal?


I never understood the idea of selling something I never had, I understood that i could use the trading tools to buy currency and then re-sell it at a profit. The trading tool however allows one to sell without even buying anything. I still don't get it, maybe I'm not interpreting the involved procedures correctly

[gucci man]

question 1. You can Have a trade open for as long as you want. The only thing is you have to pay interest/receive interest [daily] for the open position
question 2. You can sell what u dont have because you are allowed to borrow it.

say for example. u want to sell eurusd or euro for usd, what happens is that you buy some euro, leverage that euro...and buy usd with it. At the end of the trade u sell that usd for eur and the difference u make is yours.

Basically u are always borrowing to make a transaction [unless you are not leveraging]

[BlackCryptoKnight]

So basically, if I understand this correctly, Forex trading is really just buying and selling currency. You make money when you can sell currency you bought, for a higher price that what you bought it for. Is that right?

[Chris]

That's correct. And remember, the currencies are the major world currencies - USD, CAD, JPY, EUR, etc.

[rodalembs]

So basically, if I understand this correctly, Forex trading is really just buying and selling currency. You make money when you can sell currency you bought, for a higher price that what you bought it for. Is that right?\

That is it in essence, howerver as a day trader you can make money by both buying and selling currency.

As a middle man u SELL high and BUY Low. Think of it this way, you can agree on a rate with a purchaser even before you have the product in hand. You profit (pips) is really the diffrence between what you buy for and what you sell for.

The whole idea behind reading the charts is to buy the lows and sell the highs of a currency.

[rodalembs]

That's correct. And remember, the currencies are the major world currencies - USD, CAD, JPY, EUR, etc.

The six major currencies are the:

USD - United States Dollars
CAD - Canadian
JAP - Japanese
EUR - Euro
GBP - Great British Pounds
AUD - Austrailian Dollar
SWF - Swiss Franc

Currencies are traded in pairs ( i.e. currecies most likely to see price movments againts each other)

The most common trading pairs are:

US Dollar and the Japanese Yen (USD/JPY)
Euro and US Dollar (EUR/USD)
US Dollar and Swiss Franc (USD/CHF)
British Pound and US Dollar (GBP/USD)

[Greatis]

I do wonder if the government might just try to regulate this as well

[Chris]

I do wonder if the government might just try to regulate this as wellThis one is bigger than the Government and since it's all online and "off-shore" it makes it that much more difficult to regulate.

[CyberCat]

I have it from a reliable source that a certain high level financial institution in the Caribbean does this and makes millions. They take low risks, but the amount they trade enables them to make a killing.

In a sense, you can do this on your own if you have the patience: You can buy GBP at the time of the year when it is lowest against the EC$ or JA$ (about EC$3.00) and sell it around December when it is high (almost EC$5.00).

[Virus]

My question is, does it all boil down to guessing?

E.g.:
http://img.photobucket.com/albums/v195/courage/EURUSD.gif

this chart shows a downward trend, hence you'ld sell. But anybody can see that bcuz its after the fact. How would i "know" that it was gonna decline in the long run? Im using the term "know" loosely..

[ramesh]

Yes, it all boils down to guessing. Most traders know very little more than what is revealed in "Trading Places" (Dan Ackroyd and Eddie Murphy).

The only way to succeed in RL trading is insider information....

[Virus]

Did a little more digging.. and found Technical analysis. Little bit of science and a little bit of patience.. but it still seems like guessing to some extent.

Insider info == banking info on currency trends?

[homey]

Did a little more digging.. and found Technical analysis. Little bit of science and a little bit of patience.. but it still seems like guessing to some extent.

Insider info == banking info on currency trends?

And keep in mind the currency conversion fees attached to the trading of funds. My cousin told me about Forex when I was down in JA last year. When I came back state side I did sign up for a 30-day account; but after the continual calls from Forex to go live and actually trade, I backed down. It's OK to play with a couple hundred dollars; but $10,000.00 was a little out of my league.

[gucci man]

So basically, if I understand this correctly, Forex trading is really just buying and selling currency. You make money when you can sell currency you bought, for a higher price that what you bought it for. Is that right?

u make money selling a currency by exchanging it for the one that is appreciating....so if usdjpy is falling, u sell USD in exchange for YEN(JPY) because YEN(JPY) is appreciating...hence USDJPY is falling.

Just imagine it as protecting your money by changing it over to one that is appreciating....Same thing as buying.

The only reason they say SELL is because of how the pairing setup. eg, Buy EURUSD is the same as Selling USDEUR, but they dont use USDEUR as a standard symbol, only EURUSD.

remember, the second currency in the "pair" is the one that is losing when the first in the pair (USD) is appreciating. and VICE VERSA

also, insider numbers are very difficult to get, typically the numbers i am talking are CPI core numbers, GDP, Rate Hike/cuts Etc, (Non-farm not all that exciting to traders again).

and those numbers are very hard to get, in fact...i dont know anyone that ever get them before the crowd does.

If you want to see the effect the numbers have on currency pricing check out anything vs canadian dollars Tuesday Feb 19 @ 7:00am

The Govt of the various countries actually locks down these numbers until the precise time of release.... google: Lockdown, numbers, fed, cpi, NFP,

the people doing the research could face jail time if the numbers get leaked and they are caught.

by the way, for those who thinks the US is in a recession, remember a recession by definition is when a country has two consecutive negative GDP numbers (quarter)

Forex nice man, but if u excited by forex...chances are u soon lose your money. As Warren Buffet says "If you are trading and excited you are probably losing money, Wining is boring once u know how to do it consistently"

you can read all my post on forex factory.com , just look for "Mr. Demark"


There is an easy way to trade forex that i could teach a "Few" but i cant take idiots unless uhnu gonna pay me ($100USD per 2 weeks) PM me for more info. THis is the first time i would be doing this.

and dont listen to the folks that say 90% of traders lose. why?
100% of traders lose. But their winning outdo their loses and there is a way in ensuring this///

sh1T, do i talk to much? Sorry, forex a just my thing

[gucci man]

Did a little more digging.. and found Technical analysis. Little bit of science and a little bit of patience.. but it still seems like guessing to some extent.

Insider info == banking info on currency trends?

definately a guess game, but there are ways to guess and know before hand what the outcome will be.

[homey]

Could someone explain what exactly foreign exchange trading entails?

A Brief Tutorial on FX Markets - courtesy of Trendways.com

Foreign exchange rates:

A foreign exchange rate is the parity between two currencies i.e. the amount of one currency needed to sell (or buy) in order to buy (or sell) one unit of the other currency. There are two ways to express such a rate. The most common (or international way) quotes the amount of any currency that corresponds to one U.S.Dollar. So when we see USD/DEM at 1.5000 this means that one dollar can be exchanged for 1.5 Dmarks. Among the major currencies it is only British sterling which is quoted the other way i.e. GBP/USD at 1.5500 means that one pound is exchanged for 1.55 dollars. The American way of quoting rates uses the opposite direction, that is it expresses the dollar amount that can be exchanged for one unit of foreign currency. So when we see for example the Dmark at 0.6625 this means that one mark can be exchanged for 0.6625 dollars (or the same at 66 1/4 cents). The term "cross rate" is usually used to express the parity between two nondollar currencies like DEM/SFR.
http://www.global-view.com/forex-education/forex-learning/twtutorial.html


Currencies are always traded in pairs – the US dollar against the Japanese yen, or the English pound against the euro. Every transaction involves selling one currency and buying another, so if an investor believes the euro will gain against the dollar, he will sell dollars and buy euros.

The potential for profit exists because there is always movement between currencies. Even small changes can result in substantial profits because of the large amount of money involved in each transaction. At the same time, it can be a relatively safe market for the individual investor. There are safeguards built in to protect both the broker and the investor and a number of software tools exist to minimize loss.
http://www.forexmarketexplained.com/


I put the links for the companies right under the articles if you need to go to the sites for further information.

[Virus]

Ok, here is my question.. USDJMD.
The Jamaican dollar isnt going anywhere but down when paired with the USD. Im pretty sure if we traded that pair we'ld always win?!?!?!?

[Manu]

You know I find that funny... cos even when the USD weakend we were still declining.... and Canada was stonger than it at one time and now it's stronger than Canada's again and we still never made much or lost much to the USD but we gained $5Ja against the Canadian.

[Virus]

i have one last question, "they" say you should have an offshore a.c so that the govt/ auditors cant track your income or something like that?

Isnt that considered tax evasion.. same thing wha almost reach Beenie Man?
And wouldnt i have to pay taxes in that offshore country? Why avoid jamaica??
How much taxes are they gonna draw?
Should we do like D Smith and open an a/c in turks or cayman?????

[CyberCat]

You know I find that funny... cos even when the USD weakend we were still declining.... and Canada was stonger than it at one time and now it's stronger than Canada's again and we still never made much or lost much to the USD but we gained $5Ja against the Canadian.

Thats because your dollar was pegged to the US. I stand corrected.


i have one last question, "they" say you should have an offshore a.c so that the govt/ auditors cant track your income or something like that?


I dunno 'bout in Jamdown, but in Spice Counrtry, the forex companies are now regulated by GARFIN (after the CAPBANK fiasco) so I guess the governmennt taxes them.