Most forex brokers do not charge commissions. GFT Forex Brokers, like other forex brokers, are compensated by revenues from their activities as currency dealers, including proceeds from buying, selling, converting and holding currencies, interest on deposited funds, and rollover fees.
Many may wonder how brokers work without commissions. The forex dealer is like a middleman. Let's consider the case of a bread middleman. He buys bread at a “wholesale” price and he sells it at a “retail” price. So if one is a baker, he can ask the middleman how much he would buy his bread for. Let's say the middleman quotes $1, so he's willing to pay $1 per loaf.
On the other side of the equation, let's say you just finished his last slice of bread, and you needs a new loaf. So you call up the local middleman, and ask him how much he's willing to sell you (a customer) a loaf of bread for. And he quotes the baker $1.25. That sounds reasonable, so you tell him to drop one off for you.
In this example, the bread middleman didn't charge you a commission to either the baker or you, the customer. Instead he bought at one price and sold at another. He will let you buy from him at $1.25, and let you sell to him at $1. So every time the baker has bread to sell, he checks the middleman's sell price. And when you want to buy a loaf of bread, you check the buy price.
In trading, this is known as the “bid” and “ask”. The bid is the price you can sell at, and the ask is the price you can buy at.
Considering forex broker commissions, the forex dealer will let the trader buy from him at 1.1971 and will let the trader sell to him at 1.1967. The difference 0.0004 is known as the spread. And this spread is where the forex “middleman” makes his money.
If the trader were to buy at 1.1971, then the instant the trader buys, he is “down” 0.0004, because if the trader wanted out of the trade, the best price he could sell it for is 1.1967. So as the forex dealer takes varying trades from people, each buying or selling, he can make money from this price gap. Each minimum increment, 0.0001 is referred to as a “pip”. So the spread in this example is 4 pips. In terms of dollars, for a forex contract of $100,000,
Monday, September 21, 2009
Tuesday, September 15, 2009
FOREX CURRENCY TRADING
FX, Forex or Foreign Exchange, is all about exchange of currencies from one hand to another at an ongoing price in the market. Forex is all about investing money in foreign currencies, just gain profit by selling at a higher price, the one you hold, just to buy another one at a lower price. Earlier, not many traders were clear about the Forex trading and that Forex is just short for "foreign exchange", as it did not get much publicity through media.
Foreign Exchange market is the biggest financial market in the world, with a potential of fast and great gains and a sizable number of investors. The advent of internet technology is what made Forex trading grow considerably popular as well as accessible with various types of investors
Foreign Exchange market is the biggest financial market in the world, with a potential of fast and great gains and a sizable number of investors. The advent of internet technology is what made Forex trading grow considerably popular as well as accessible with various types of investors
Monday, September 14, 2009
What is Forex Currency Trading?
The term 'Forex' or 'FX' is short for 'foreign exchange'. What is being exchanged on this market is not stocks or bonds, but currencies from around the world. In other words, the Forex market is the place where U.S. dollars, Euros, Yen and other major currencies are bought and sold. It represents the largest financial market in the world by volume. Starting with the simplest example of currency exchange that most people are familiar with is that of exchanging one currency for another when traveling overseas.
Sometimes you get more for every dollar you exchange than other times. You will notice that foreign exchange rates never remain the same and are constantly changing. This volatility in exchange rates can enable you to make a lot of money in the forex market with forex currency trading.
Sometimes you get more for every dollar you exchange than other times. You will notice that foreign exchange rates never remain the same and are constantly changing. This volatility in exchange rates can enable you to make a lot of money in the forex market with forex currency trading.
Forex Runner
Learn how to day trade the forex market and consistently nail $200, $300 or $400 trades over and over again. Forex Runner is simply one of the best day trading systems I have ever traded. And, being one of my unique PDFT strategies, you will not use any tools or indicators to trade it, the ONLY thing you will need is the price of the currency pair.Forex Runner let's you trade 100% emotion-free since it is completely mechanical. It's rules are incredibly easy to understand, it will not take you more than one hour to learn how to trade it.
One of the amazing characteristics of Forex Runner is that it let's you trade when ever you have time. Since the forex market is a 24 hour market, you have the luxury to decide exactly when it is best for you to put Forex Runner to work.
If you have been around for some time in the trading business you know how hard it is to find a consistently profitable day trading strategy. Forex Runner was built to be consistent. Small stop losses, large profit objectives and a large percentage of winning trades makes Forex Runner one of the top performing forex trading systems.Here are some of the many benefits Forex Runner traders have:A revolutionary Price Driven Forex Trading (PDFT) strategy.
You will not use any type of indicators, identify any vague patterns, or use support or resistance levels etc. You will only use the price of the currency pair to identify, enter and profit from the trade.You will learn how to exploit the daily range of the major currency pairs.How to enter "hit and run" trades; i.e. Identify fast, enter fast and profit fast!Fully disclosed system: no need to buy, rent or subscribe to any service. You control your trading, you decide when to trade, you decide how much to trade.
So easy to learn that most of my traders (many who are completely new to forex trading) put Forex Runner to work only 1 day after learning it.
No stress, no emotions: Since Forex Runner is 100% mechanical you will only follow strict rules to identify, enter and exit trades. No interpretation or judgment what so ever (if you trade already, you most likely know the value of 100% mechanical trading)!Cheat most daytradres! While 90% of traders will identify trades only after the market started moving (and trust me, most enter as the move is ending!), you will have already identified and entered trades BEFORE the market started moving.
Be your own boss, chose when to trade. Since the forex market is active 24 hours a day, no matter what part of the world you live in you can put Forex Runner to work for you!Profit objective is pre-set. This means you do not have to think and speculate where to place it. Once you enter the trade you will simply enter a "take profit" order and forget about it.
One of the amazing characteristics of Forex Runner is that it let's you trade when ever you have time. Since the forex market is a 24 hour market, you have the luxury to decide exactly when it is best for you to put Forex Runner to work.
If you have been around for some time in the trading business you know how hard it is to find a consistently profitable day trading strategy. Forex Runner was built to be consistent. Small stop losses, large profit objectives and a large percentage of winning trades makes Forex Runner one of the top performing forex trading systems.Here are some of the many benefits Forex Runner traders have:A revolutionary Price Driven Forex Trading (PDFT) strategy.
You will not use any type of indicators, identify any vague patterns, or use support or resistance levels etc. You will only use the price of the currency pair to identify, enter and profit from the trade.You will learn how to exploit the daily range of the major currency pairs.How to enter "hit and run" trades; i.e. Identify fast, enter fast and profit fast!Fully disclosed system: no need to buy, rent or subscribe to any service. You control your trading, you decide when to trade, you decide how much to trade.
So easy to learn that most of my traders (many who are completely new to forex trading) put Forex Runner to work only 1 day after learning it.
No stress, no emotions: Since Forex Runner is 100% mechanical you will only follow strict rules to identify, enter and exit trades. No interpretation or judgment what so ever (if you trade already, you most likely know the value of 100% mechanical trading)!Cheat most daytradres! While 90% of traders will identify trades only after the market started moving (and trust me, most enter as the move is ending!), you will have already identified and entered trades BEFORE the market started moving.
Be your own boss, chose when to trade. Since the forex market is active 24 hours a day, no matter what part of the world you live in you can put Forex Runner to work for you!Profit objective is pre-set. This means you do not have to think and speculate where to place it. Once you enter the trade you will simply enter a "take profit" order and forget about it.
Friday, September 11, 2009
What Is Day Trading? Forex
We often hear the term ‘day trading’ today but just what is day trading?
In very simple terms a day trader buys and sells with a very short investment horizon which is typically measured in minutes with trading positions being opened and closed within the same trading day. Day trading is particularly suited to high volume, volatile markets such as the Forex but is certainly not limited to currency trading. It is for example very commonly seen in the equity markets, although it tends to be seen on the more volatile exchanges such as the NASDAQ, rather than the NYSE or AMEX.
The principle is simply to spot an opportunity and then profit from it quickly getting in and out of the market with just enough time to make your profit and too little time to risk the market turning against you. For example, you might open a position at 11:00 am and close it out just a few minutes later at 11:07 am to take a small but quick profit and repeat this process as many as a hundred times in a single trading session.
Today this traditional definition has been widened somewhat and we now also refer to the practice of trading from home through an online broker as day trading. And, just to complicate matters, the term ’swing trading’ has also started to appear recently to refer to traders with a slightly longer investment horizon of anywhere from one to five days.
Day trading in its truest form (buying and selling with a very short investment horizon) is a risky business and is not something which you should try unless you know exactly what you are doing as, while it can be very profitable, it can also produce very large losses very quickly.
Although we talk about ‘investment horizons’ it also needs to be understood that day trading is not the same as investing and you will be working to very short time frames during which you will need to be glued to your computer screen jumping onto the wave of a trade as it gains momentum and the jumping off as it crests in order to ride the next wave. Spotting the waves as they roll in and knowing just when to jump on and jump off requires both skill and practice.
For those who enjoy the excitement of the roller coaster ride then day trading can be both exciting and profitable but it is not something for the novice forex trader and should only be contemplated once you have cut your teeth in the world of currency trading and gained a fair amount of experience.
In very simple terms a day trader buys and sells with a very short investment horizon which is typically measured in minutes with trading positions being opened and closed within the same trading day. Day trading is particularly suited to high volume, volatile markets such as the Forex but is certainly not limited to currency trading. It is for example very commonly seen in the equity markets, although it tends to be seen on the more volatile exchanges such as the NASDAQ, rather than the NYSE or AMEX.
The principle is simply to spot an opportunity and then profit from it quickly getting in and out of the market with just enough time to make your profit and too little time to risk the market turning against you. For example, you might open a position at 11:00 am and close it out just a few minutes later at 11:07 am to take a small but quick profit and repeat this process as many as a hundred times in a single trading session.
Today this traditional definition has been widened somewhat and we now also refer to the practice of trading from home through an online broker as day trading. And, just to complicate matters, the term ’swing trading’ has also started to appear recently to refer to traders with a slightly longer investment horizon of anywhere from one to five days.
Day trading in its truest form (buying and selling with a very short investment horizon) is a risky business and is not something which you should try unless you know exactly what you are doing as, while it can be very profitable, it can also produce very large losses very quickly.
Although we talk about ‘investment horizons’ it also needs to be understood that day trading is not the same as investing and you will be working to very short time frames during which you will need to be glued to your computer screen jumping onto the wave of a trade as it gains momentum and the jumping off as it crests in order to ride the next wave. Spotting the waves as they roll in and knowing just when to jump on and jump off requires both skill and practice.
For those who enjoy the excitement of the roller coaster ride then day trading can be both exciting and profitable but it is not something for the novice forex trader and should only be contemplated once you have cut your teeth in the world of currency trading and gained a fair amount of experience.
Wednesday, September 9, 2009
Trader’s Said “Down,” But Volatility Said “Not So ...
The U.S. Dollar Index yesterday touched its highest level in nearly three years. Not since April of 2006 have we seen the buck this strong versus this particular basket of currencies.
Somewhat disconcerting for dollar bulls, however, was the big reversal we saw play out over the course of the trading session yesterday. Not only did the buck finish well below its high point of the day, but it also closed lower than both the open and close of the previous two sessions.
Look at the candlestick chart of the U.S. dollar index below to help understand this:
Dollar Index Hits a Three-Year High
The three-bar pattern I’ve circled does not represent an official bearish reversal pattern – at least as far as general candlestick analysis goes. But the engulfing nature and timing of the third bar in that pattern is cause for attention.
Yesterday’s session alone showed a big time loss for dollar buyers. The sellers emerged strongest on the day. The buyers couldn’t hold the new highs. And they couldn’t hold the highs, closes or even the opens of the two prior sessions either. The sellers dominated the trading day.
This morning, on the other hand, the U.S. dollar is bouncing back relatively quickly. This strength isn’t entirely out of the ordinary, but it’s somewhat surprising considering the overly bearish session yesterday. Why haven’t traders running from the U.S. dollar?Why Aren’t Traders Running from the Buck?
Could be a lot of reasons ... really.
Could be the fact that currency traders are reacting to the risk environment (i.e. stocks are lower and thus pushing up the U.S. dollar).
It could be the fact that the Bank of England and European Central Bank reminded traders that global central banks are converging on Federal Reserve interest rates (i.e. BOE cut to a record low of 0.5%; ECB to 1.5%). It could be that the world is being pressured to “Go Green!”
But on top of all those things, there may have been a clue that today wouldn’t be destined to follow yesterday’s bearish footprints.
After yesterday, when price action was hinting at reversal, a colleague sent us a summary of yesterday’s FX at-the-market options’ volatilities.
Somewhat disconcerting for dollar bulls, however, was the big reversal we saw play out over the course of the trading session yesterday. Not only did the buck finish well below its high point of the day, but it also closed lower than both the open and close of the previous two sessions.
Look at the candlestick chart of the U.S. dollar index below to help understand this:
Dollar Index Hits a Three-Year High
The three-bar pattern I’ve circled does not represent an official bearish reversal pattern – at least as far as general candlestick analysis goes. But the engulfing nature and timing of the third bar in that pattern is cause for attention.
Yesterday’s session alone showed a big time loss for dollar buyers. The sellers emerged strongest on the day. The buyers couldn’t hold the new highs. And they couldn’t hold the highs, closes or even the opens of the two prior sessions either. The sellers dominated the trading day.
This morning, on the other hand, the U.S. dollar is bouncing back relatively quickly. This strength isn’t entirely out of the ordinary, but it’s somewhat surprising considering the overly bearish session yesterday. Why haven’t traders running from the U.S. dollar?Why Aren’t Traders Running from the Buck?
Could be a lot of reasons ... really.
Could be the fact that currency traders are reacting to the risk environment (i.e. stocks are lower and thus pushing up the U.S. dollar).
It could be the fact that the Bank of England and European Central Bank reminded traders that global central banks are converging on Federal Reserve interest rates (i.e. BOE cut to a record low of 0.5%; ECB to 1.5%). It could be that the world is being pressured to “Go Green!”
But on top of all those things, there may have been a clue that today wouldn’t be destined to follow yesterday’s bearish footprints.
After yesterday, when price action was hinting at reversal, a colleague sent us a summary of yesterday’s FX at-the-market options’ volatilities.
Tuesday, September 8, 2009
SigmaForex Reveals Factors Involved In Becoming A ...
These days everyone is talking about Forex trading and the great opportunity this activity represents for people willing to break free from the corporate world and start working from home or anywhere else without losing their current lifestyle and even improving it.Forex trading has changed dramatically in the last 10 years thanks to the technological advancements of the internet era. With real-time streaming technology and faster and more efficient computer systems, almost anything, from roses to FX trading, is available at the click of a button.Some of the great reasons why Forex trading is a great way of entering the capital markets is that your trades are all commission-free and it has a low transaction cost. All the best Forex brokers have these characteristics and even Mini FX traders (i.e., traders starting with accounts having a capital as low as $250), who are just starting in this field, can buy and sell currencies online always commission-free.But one thing is to start Forex trading and other very different is becoming a profitable Forex trader. In order to become a profitable trader the new trader will immediately discover the imperative need of having an accurate knowledge of the markets and a good understanding of the Forex technical indicators. Concepts as Moving Averages, Fibonacci levels, Bollinger Bands, etc; are the basic knowledge every trader must have.But having a good knowledge of these concepts is not everything you need. Fear is one of the worst enemies of the Forex trader. In order to become a profitable trader it is essential that the person involved in trading understands that he must leave fear aside and stick to the trading plan he has constructed and arranged before, always understanding that losing trades happen to everyone and they are always part of a profitable trading career. A Forex trader must learn how to profitable use his stops without heavily compromising the capital in his trading account, i.e., he must play safe but realizing that a calculated risk must be undertaken in order to maximize profits.In short knowledge is the key to a successful trading career but it also must go along the proper psychological preparation of the trader in order to be able to tame the markets and become a profitable trader.
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