Avoid Forex Currency Trading Scams

Avoid Forex Currency Trading Scams

foreign currencies trading

Forex currency trading swindlers usually attract customers through advertisements in native newspapers, radio promotions or engaging internet sites. these specific advertisements could flaunt low-risk high-return investment opportunities in foreign currency trading. They will even supply high paid currency-trading employment opportunities. Be terribly skeptical when promoters of foreign currency trading claim that their services or account management can earn high profits with minimal risks. Be wary if these claim that employment being a forex currency trader can get you to wealthy quickly.

Avoid opportunities that sound too good to be true. Forex currency trading that involves get rich quick schemes are generally swindles. Retired folks with access to their retirement funds are attractive targets for fraudsters. Once your money is gone, it is almost impossible to get it back.  Be very careful of companies that will guarantee you a profit. Be careful as well, if they flaunt extremely high performance. These types of statements are generally false.

If the company tells you that written risk, disclosure statements are routine formalities imposed by the government, stay away from that company! Forex trading is very volatile and can be a huge risk for the uneducated and uninformed. If you cannot afford to lose money then do not get into the Forex currency trading market. Do not use your retirement funds for Forex currency trading; that would be extremely foolish.

Be very wary of online trading, it can be impossible to get a refund but it is very easy to transfer your funds. The internet is an easy way for fraudsters to reach potentially millions of people. The internet also can hide where a Forex trading company resides. If you transfer your money to a foreign location, it may be impossible to get it back.

You must get the background of the company you are dealing with. You should ask for all information in written form. Check with the Better Business Bureau as well. Do not rely strictly on information you here verbally. If you are not completely satisfied or comfortable with the information you find out then just do not deal with that company.

You may here the term ‘interbank’, it refers to a loose network of Forex currency transactions that are negotiated between financial institutions and other large companies. These are usually the only ones investing in the interbank market. So, be careful of a company that indicates that you should trade Forex in the interbank market. This can be a sign of an unscrupulous trading company.

Another term you may here is Margin trading. Margin trading can make you responsible for losses that are greater than the dollar amount you deposited. Many Forex currency traders will ask customers to give them funds, which they sometimes refer to as "margin." These sums can be in the range of $1,000 to $5,000. Those dollar amounts actually control a far larger dollar amount of trading and customers are not aware of this sometimes. So, in essence do not trade on margin unless you fully understand what it means and what you are doing. You must be prepared to accept losses that can exceed the margin amounts you have paid.

A Guide to Actually Foreign Currency Trading

A Guide to Actually Foreign Currency Trading

foreign currencies trading

Whereas foreign currency trading offers its rewards, most especially when you can able out to trade in major currencies much like the us greenbacks and euro, caution against advertisements and brokers that provide instant riches ought to be observed. 

There's go regulate foreign currency traders. Unfortunately, not all within the business are registered. Not entirely illegal, several unregistered brokers populate the monetary markets. Extra precaution is suggested for individuals and companies when they deal with forex brokers.

The United States has passed a federal law, the Commodity Futures Modernization Act of 2000 that gives authority to the commission to investigate suspicions of frauds in the transactions.

Frauds in Forex trading have telltale signs and you must be aware of these. Be wary of schemes that offer quick riches.  An experienced Forex brokers will tell you currency trading is not a risk free business and only those with real analytical methods can succeed in the field. And, even when projections seem sound, there is no way of telling exactly how strong a currency will hold out against many factors. So watch out for those who promise large profits no matter the economic condition is.

Most brokers ask for margin investments. If you are not fully aware of how this works, do not venture into it. You may be losing s more than you earn in the long run. Beware also of the “interbank market” service that brokers may offer. In reality, only large banks, corporations and investment institutions have access to this loose network of currency traders.

To be sure about the credibility of the brokers you are getting, study their profiles and company background seriously and extensively. Stick with a shortlist of firms that are registered with the regulatory commission on commodity futures.

Beginner Forex Currency Trading: What Is It All About?

Beginner Forex Currency Trading: What Is It All About?

foreign currencies trading

For a beginner forex currency trading may seem to be a whole new world but in fact the basics are quite easy to learn. You just need to understand the buzz words and trading terms and grasp a basic understanding of how the markets work.

Making big money in a short time is what forex currency trading is all about! It is possible for investors to make a lot of money very fast because the rates of exchange on the foreign market can rise and fall quickly. This means of course that it is risky and there is also a chance of losing a lot, just like most things in life that have the potential of big returns.

As you will know if you have ever exchanged currency for a vacation, the rates are constantly changing. For example you may change $100 into another currency planning to travel, and then find that you do not need it and change it back. The rate will probably have changed in the meantime and you may even have made a profit.

Forex traders deal in currencies hoping to make a profit all of the time, but instead of changing money at the bank they use a broker. Most transactions these days are handled online. In many ways it is not so different from stock trading. There is the same potential to trade in margins where a small balance held by your broker can control much larger deals.

One difference from stock exchange trading is that forex traders are not limited to dealing in their own country. You can trade any two currencies regardless of where you live. This also means that the market is international. Because of time zone differences, it is open 24 hours a day from Monday morning in Australia to Friday afternoon in New York.

Each currency is represented by 3 letters: USD for the US dollar, GBP for the British pound, EUR for the Euro, JPY for the Japanese Yen, CHF for the Swiss franc, CAD for the Canadian dollar, AUD for the Australian dollar etc. The exchange rate between two currencies may be expressed like this: USD/CHF 1.14. This means that to buy one US dollar you will need 1.14 Swiss francs. 

If you want to start out in forex trading you will need to look for a broker or investment management company that you trust. It is worth shopping around and checking online forums for recommendations. Check out how long the company has been in business and what your rights and liabilities will be. Read all of the fine print.

You will probably also want to use a bot to do your trading for you. This is automated forex trading software that can trade 24 hours a day according to rules that you set for it. There is usually a demo option so that you can test out the whole system for a while before you let it trade with real money. There are many forex robots on the market and most of them come with full instructions for beginner forex currency trading.

“How To” Start Trading The Forex Market? (Part 5)

“How To” Start Trading The Forex Market? (Part 5)

foreign currencies trading

What are *PIPS* ?

Currencies are traded on a price/ point (pip) system. Each currency pair has its own pip value.

When you see a FOREX price quote, you'll see something listed like this:

EUR/USD 1.2210/13

Explanation:

a) If you want to BUY the EUR/USD ( meaning you BUY EUROS and SELL US$ ) you buy 100,000 EUROS and you SELL 122,130 US$, or in other words you receive 122,130 US$ for 100,000 EUROS.

b) If you want to SELL the EUR/USD ( meaning you SELL EUROS and BUY US$ ) you buy 122,100 US$ and sell 100,000 EUROS, or in other words you receive 100,000 EUROS for 122,100 US$.

The difference between the bid and the ask price is referred to as the spread. In the example above, the spread is 3 or 3 pips.

Since the US dollar is the centerpiece of the FOREX market, it is normally considered the 'base' currency for quotes. In the "Majors", this includes USD/JPY, USD/CHF and USD/CAD. For these currencies and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. 

For example a quote of USD/CHF 1.3000 means that fore one U.S. dollar you receive 1.30 Swiss Francs. or in other words, you receive 1.30 Swiss Franc for each 1 US$.

When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/CHF quote above increases to 1.3050 the dollar is stronger because it will now buy more Swiss Franc than before.

The three exceptions to this rule are the British pound (GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as EUR/USD 1.2080, meaning that for EURO you receive 1.2080 U.S. Dollars.

In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one Euro, British pound or an Australian dollar.

In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.

Currency pairs that do not involve the U.S. dollar are called cross currencies, but the calculation is the same. For example, a quote of EUR/JPY 134.50 signifies that one Euro is equal to 134.50 Japanese yen.

HOW TO BUY ( going “ LONG ”)and SELL ( going “ SHORT ”) in the FOREX Market?

Keep in mind 2 very important rules:

RULE # 1) Cut your LOOSING trades and let your WINNING trades RUN

YOU WILL HAVE LOSING TRADES. Every FOREX trader has. The secret is, that a consistent, disciplined trader, at the end of the day, adds up more winning trades than losing trades.

When you and see on your charts, without any doubt, that you are in a losing trade, don't keep losing money. Most of the novice traders are lowering their stop loss just to “prove they are right” or “hoping that the market will reverse”. 99% of these trades, are ending up with more losses. Most of the profitable trades are usually "right" immediately.

Remember, smart traders know there are many other opportunities. CUT your losses short and compound those winning positions.

RULE 2) NEVER EVER trade FOREX without placing a Stop Loss Order.

PLACE a STOP order, right along with your ENTRY order, via your online trading station, to prevent potential losses.

Before initiating any trade, you have to calculate at what point ( price) you would be wrong, because the market changed direction, and would want to cut your losses. 

To make profits, in the FOREX, a trader can enter the market with a *buy position* (known as going "long") or a *sell position* (known as going "short").

As an example let's assume you've been studying the EURO. The EURO is paired first with the U.S. dollar or USD. 

Your trading methods, rules, strategies, etc., tell you that the EURO will rice in the next 2 weeks, So you buy the EUR/USD pair meaning you will simultaneously buy EUROS, and SELL dollars).

You open up your excellent trading station software (provided to you for free by Fenix Capital Management, LLC www.fenixcapitalmanagement.com ) and you see that the EUR/USD pair is trading at:

EUR/USD: 1.2010/1.2013

As you you believe that the market price for the EUR/USD pair will go higher, you will enter a *buy position* in the market. 

As an example, lets say you bought one lot EUR/USD at 1.2013. As long as you sell back the pair at a higher price, then you make money.

To illustrate a typical FX SELL trade, consider this scenario involving the USD/JPY currency pair:

REMEMBER Selling ("going short") the currency pair implies selling the first, base currency, and buying the second, quote currency. You sell the currency pair if you believe the base currency (USD) will go down relative to the quote currency (JPY), or equivalently, that the quote currency (JPY) will go up relative to the base currency (USD).

HOW TO CALCULATE PROFIT OR LOSS? 

The Profit Calculations, on the Short-sell trade scenario below, may seem somewhat complicated if you've never been in the FOREX market before, but this process is continually calculated through your broker trade station (software). I show you this process below so you can SEE how a PROFIT might occur.

The current bid/ask price for USD/JPY is 107.50/107.54, meaning you can buy $1 US for 107.54 YEN, or sell $1 US for 107.50 YEN.

Suppose you think that the US Dollar (USD) is overvalued against the YEN (JPY). To execute this strategy, you would sell Dollars (simultaneously buying YEN), and then wait for the exchange rate to rise.

Your trade would be the following: you sell 1 lot USD (US $100,000) and you buy 1 lot JPY (10,754.000 YEN). (Remember, at 0.25 % margin, your initial margin deposit for this trade would be $ 250.)

As you expected, USD/JPY falls to 106.50/106.54, meaning you can now buy $1 US for $106.54 Japanese YEN or sell $1 US for 106.50.

Since you're short dollars (and are long YEN), you must now buy dollars and sell back the YEN to realize any profit.

You buy US $100,000 at the current USD/JPY rate of 106.54, and receive 10,654,000 YEN. Since you originally bought (paid for) 10,754,000 YEN, your profit is 100,000 YEN.

To calculate your P&L in terms of US dollars, divide 100,000 by the current USD/JPY rate of 106.54

Total profit = US $938.61