Forex Education

After starting this blog, many people have asked me about Forex and if I would be willing to help them get into this exciting market.

Let me tell you, now is the time to start trading Forex. When unheard of volatility in the markets today, HUGE profits are being made in the Foreign Exchange market.

If you are interested in getting into Forex to make some extra money for college, or maybe to actually earn an income, I can help.

I can help you:
-Set up a practice account
-Give you resources to get educated and comfortable with the market and software you'll be using
-Make the jump into trading a Live Account
-Purchase and start using an Expert Advisor
-Give you my personally tested settings for the EA
-Even help you set up VPS service to run the EA full time on

Please Email me at Mtravis100 @ gmail.com with the subject Mike's Blog: Forex.

Risks of Trading Forex

Since several people have asked me about starting to trade Forex, I thought I would post some important ideas involved in this exciting market.

But first, before anything else, you need to understand that the making money in the Forex market is NOT as easy as many sites/brokerages want you to think. Foreign Exchange trading involves many considerable risks that other types of trading do not. I'm going to list a few key things to keep in mind when beginning to trade Forex.

1. Forex Scam
   
   • Although Forex Scams have all but completely cleared up in recent years, it is still important to do some research before choosing a broker. Check that they are registered with the appropriate government agencies. If you are trading through a US broker, they should be registered with the Commodities Futures Trading Commission (CFTC) or be a member of the National Futures Association (NFA).
2. Basic Exchange Rate Risk
   
   • When trading Forex, it is important to remember that you are literally trading one currency for another. Think of it this way: if you traded your entire USA $ life savings for an equivalent amount in the Yen and the next day, the Chinese stock market crumbles having a drastic depreciating effect on the Yen. You're beat. Now obviously this example was exaggerated but you get the idea. Mid trade a country may cut/raise a key interest rate and have a horrifying effect on your account. Also, this effect is multiplied as you will read next.
     
3. Leverage
   
   • Leverage is the double edged sword that lures people into the Forex market. Leverage is the ability to manipulate a whole lot of money, with just a little money. Mini and Micro accounts will sometimes offer up to 400:1 leverage. This means that with $100 you can trade $40,000 worth of currency. A little scary right? Brokerages use leverage because, unless you are trading very large amounts of currency, the fluctuations in the Forex market are negligible. Remember, in Forex, currency pairs fluctuate by Pips (usually 1/100 of a cent). Leverage multiplies both your Profits and your Losses, so be cautious!
     
4. Foreign Interest Rates
   
   • Another thing to keep in mind is foreign interest rates. Sometimes, when a trade is not closed during normal market hours, the currency you sold may increase in value slightly due to that country's interest rate. This will have a negative effect on your profits. This risk, however, is easy to avoid by closing all trades during the respective markets open hours. Note: Interest Rates can also have positive effects on your trade as well.
     
5. Stop-Loss Orders
   
   • Stop-Loss orders are a very important way to limit your losses when trading Forex. A Stop-Loss order is one that will close an open trade on a currency pair at a specified magnitude of loss. These types of orders are used in conjunction with Limit orders that will close a trade at a specified level of profit. Both are used very frequently in trading systems. Stop Losses are important in avoiding the dreaded Margin Call.
6. Margin Call
   
   • A Margin call occurs when an open trade moves so far against you that a broker must close the position out because you have exceeded the balance of your account in the loss. In other words, your trade sucked so bad that it wiped out your entire account balance. This is every traders worst nightmare, but easy to avoid by monitoring personally or by using a stop loss.
     
7. Spread
   
   • During a normal day of trading, a currency pairs Spread may vary from 1-2 pips all the way to 10 pips, depending on the pair. Just keep in mind that it is much harder to profit from a trade when spreads are excessively high.

Now that we've gotten that out of the way, let me just give you a few reasons TO trade Forex.

1. The Forex Market is the most liquid in the world.
   
2. Execution rates are very high because of this liquidity
3. No Middle Men.
   
4. Leverage is extremely powerful when used correctly.
5. No Commissions, just the Spread. Overcome the spread, and the rest is all your own profit.
6. 24 hour market. Trade 6 days a week, all day.
7. Mini and Micro trading accounts are great for beginners.
8. Charts, analysis, and software are abundantly plentiful, making analysis easy and fun.

If you're intrigued by the Forex market, the BEST advice i can give you is to get a free practice account and start teaching yourself. No one instantly understands this market, it takes time and patience. Once you are trading a practice account profitably for 4-6 months, throw down some of your own money, but only put down what you can afford to lose.

BabyPips

ForexTips

Forex Robot

Introduction to Foreign Exchange trading

Due to reader(s) requests, I have decided to write a step by step guide to start trading foreign currencies on the Forex Market. Don't worry, I know the thought of trading something like the Great Britain Pound (GBP) for the Australian Dollar (AUD) might be a bit intimidating, but I'm going to show you where to learn everything you need to know to start trading currencies and making yourself some extra money.

First off, let me give you a basic idea of what the FOREX market is.

• The Foreign Exchange Market (Forex or FX for short) is the largest and most liquid marketplace in the world. The Average Daily Turnover in the FX market is approximately $3.8 trillion dollars. That's almost 3 times our national debt to China in a day. Wow!
• This market is based on real time exchange rates between foreign currencies. These rates vary greatly on a day to day basis and change throughout the day. The market is only closed on Saturday because of time differences between markets.
  
• The Forex market involves Currency pairs (EUR/USD, USD/JPY, EUR, GBP, etc.). The first Currency in the pair is the Base Currency and when you buy or sell a currency pair you are "buying" or "selling" the base currency.
• Money is made by speculating on what certain currencies or, more importantly, Currency Pairs will do in a given time frame based on Technical and Fundamental Analysis.
• The exchange rate between currencies changes by pips or the 4th decimal point in the currency pair. ($0.0001 or 1/100 of a cent for the dollar)
• Because currencies vary by such a small amount of money in their fluctuations, Forex Brokers can offer you Leverage which allows you to magnify your profits (though also your losses) in this market. Typical leverage is about 100:1 for standard accounts and sometimes up to 400:1 in mini and micro accounts. This means that, in a standard account, one can control up to $100,000 worth of currency with just $1,000 in an account.

The Forex market can be an extremely profitable one; even without much experience it is possible to profit from the constant fluctuations of the Foreign Exchange Rates. One of the best things about this exchange is that high volatility means more money to be made and in times of financial uncertainty like these, Exchange Rates fluctuate frantically and FOREX speculators prosper.

1.) My best advice is to start at Babypips.com and click on the "new to forex" graphic. Their forex school is where I learned a lot of what i now know and use everyday. Everything from Japanese Candle Sticks to Simple and Exponential Moving averages to Money Management and Risk. Babypips is a great site.

2.) The next thing i will recommend is to open a practice account. There is no better way to learn that to become profitable on an account that uses fake currency in a real market. I would recommend maintaining profitability for at least 4 months before trading a live account. Trust me, I made the mistake. Trade practice until you are very comfortable with your platform and the market.

3.) Become familiar with MetaTrader 4. This, in my opinion, is the most powerful trading platform out there. It is from this terminal that you can create and allow Expert Advisers, or algorithmic trading programs to trade your accounts for you.

Please feel free to contact me any time with questions about this exciting marketplace; I would be more than happy to point you in the right direction.

• Great Expert Advisor

• How You Make Money Trading Forex
  

Forex Expert Advisors

So i've been trading Forex only for about 3 months now. I've just been playing with a practice account and a small live account and have not be able to make to much money. I'll close several profitable trades and then one big fat loser will wipe out most, all, and sometimes more than i've profited on the session. I had used custom indicators, market alert services, even just basic fundamental research and technical analysis to no avail. So i decided to look for something else.

I've just recently started letting an Expert Advisor trade my MetaTrader 4, practice account. An Expert Advisor is essentially a "Forex Robot" that makes trades (hopefully profitable ones) on your account for you. These Expert Advisors are really programs or Algorithms written in MQL4, a programming language that is included in the MetaTrader 4 software

Though I've only had it running on this account one day, i am up about 3 percent. Not bad for a single day, though way too early to determine anything with out speculating. But then again, thats exactly what I do when i trade Forex, so im gonna go ahead and speculatively say that this will eventually be a profitably endeavor.