.

Archive for November, 2011

Forex Trading for Beginners What the brokers don’t tell you


www.55trader.com Want to learn how to profit from financial markets including Currencies, Vince Stanzione gives you some tips from his 26 years trading experience and explains why you do not have to be glued to a screen all day to make money trading Forex.Forex Trading for Beginners — What…

Archived under Forex Comments (22)

Forex Robot

Forex Robot

This is a generation of automated trading where most of the trade is done via the underlying system or the program. The system makes all the decisions on whether to buy or sell the currency and you just have to click a button to complete your trade.

Types
There are two types of automated system driven trade

Forex Robot – Here everything is automated and such systems are often known as the black box. On the green signal of the forex robot you have to take a call on buying the currency whereas on the red signal of the forex robot you have to take a call on to sell the currency. Forex robots are apt for someone who is beginning on the currency trade and doesn’t know the tricks of the trade. You can just buy or sell the currencies based on the signal from the forex robot.

And you can only make changes in the system by altering the technical aspects of the system.

Signal Based – In this system the strategies of analysts and traders all over the over world are converted into signals for anyone who is interested in forex trading and they can make real time trades based on these signals which are eventually based on the strategies of the experts. One of the examples of signal bases auto trade is Zulu Trade.

History
Forex Robots and other automated systems came in to existence in the year 1999 when computers were revolutionizing the world of technology. That is the year when computer based companies tried to cash in by providing quick solutions for the people who wanted to trade thus providing huge opportunity to the general public to invest and gain through forex markets.

Advantages
Forex Robots have several advantages over a human trade. With the use of forex robots more users can take part in the market, they are quick and data of many past years can easily be stored in them. They give an opportunity for beginners to learn the tricks of the trade and it is easy for them to start on forex trades with these forex robots.

Signal automation gives you an advantage of having expert opinion from all over the world. The financial pundits, whose knowledge is vast and their strategies can prove to be of great profit reaping tips.

Disadvantages
It is said that in the past data stored in these forex robots were nothing but opening and closing rates of the currencies in each date. This can be done manually and there is not much technology involved in it. If a person has no knowledge of how to save data then he would never prove to be a successful trader anyways.

Another disadvantage is that the past data stored in the robot might be inaccurate which affects the entire system. There’s no human judgment where the robot is involved, it doesn’t take international news into account which can invariably affect market fluctuations. Robots by their nature merely take into account market fluctuations in terms of numbers and not the cause of said fluctuation. Thus it cannot precisely predict the market which by its nature is dynamic. Existing patterns, data and past benefits cannot accurately predict future returns; robots run on past data which as you can probably imagine might not reap future benefits. If a robot causes you to incur loss you end up losing the money that you invested on the system as well as the money invested in buying the Forex robot.

Regulation
As the Forex market is huge and unregulated, Forex robots although making Forex trading available to the masses; make more and more people susceptible to fraud and scammers as most of the forex scams are done through these forex robots and other automated systems.

The best Forex robot for the year 2010 is said to be FAP Turbo. But again the system is not flawless and for you to gain profits out of forex trades you have to keenly study the markets and have all eyes and all ears open for international news that might have an impact on the currency market which is very news sensitive.

Archived under Forex Robot Comments

Currency Options Trading for Hedging Currency Risks

Currency Options Trading for Hedging Currency Risks

Currency risk is part of the operational and financial risk, associated with the risks of adverse movement of exchange rate of one currency relative to another. In comparison to investments in local assets, the fluctuating exchange rates represent an additional risk factor for investors who want to diversify their portfolios internationally.  Therefore, the control and management of foreign-exchange risk is an integral part of the management of the business with a view to improve the effectiveness of international investments. One generally accepted method for management of this type of risk is currency options trading. This article is concentrated on Forex options trading as a way to hedge and control currency risk.

The use of currency options for exchange-rate risk management is nowadays widespread in developed economies; it is considered to be a routine part of the business of financial institutions and companies.

By its nature, the currency option differs from the other types of options by its economic function; it hedges the exchange-rate risk and the underlying asset is a particular currency or set of currencies.

Currency option is a legal agreement that gives the buyer the right, but not the obligation, to buy or sell the underlying asset (currency) at a strike price on or before a predefined future date when the option expires. In legal essence, the currency options trading are provisional and fixed-term transactions. The transaction is conditional, because it runs only if the buyer desires, and it is fixed-term, because its execution is at some time in the future.

Currency options are traded on regulated markets (where they are standardised) or Over-the Counter (where they are unstandardised ). The contract for currency options trading entitles the holder to buy or sell a specified underlying asset on or before a particular time at the predefined contract price. Currency option is a financial asset like shares or bonds and constitutes a legally binding agreement between two parties with strictly defined terms and conditions. It confers the right, but not the obligation for its owner to buy or sell a specified quantity of one currency in exchange of another at a fixed rate, most commonly known as “exercise price” or “strike price.”

The buyer pays a premium to the seller of the option for the right to buy or sell a predetermined quantity of one currency in exchange to another on or before the expiration date at an agreed-on price.

In general, currency options are used for purposeful modification of the risk characteristics of the portfolio, i.e. risk management. In this particular case, currency option has the nature of insurance. The open positions in foreign currencies can be insured against adverse exchange rate movement through the purchase of put options.

Currency options trading are a widely used investment tool for management and protection against currency risk and an integral part of numerous innovative investment strategies.  Forex options trading make future risks negotiable; they lead to removal of uncertainty through the exchange of foreign currency risks, known as hedging.

The investors and financial institutions use derivatives for protection against adverse exchange-rate movements. Forex options trading serve as insurance against undesired price movements, which leads to more reliable forecasts, lower capital requirements, and higher productivity.

Besides, currency options trading provide protection against currency risk with minimum initial investment and consumption of capital at exceptionally high adaptability of the contractual terms and conditions in accordance with the specific needs of investors. Forex options trading also allow investors to deal with future price expectations, purchasing a derivative asset instead of the base security at very low transaction price in comparison with direct investment in the underlying asset. In addition to hedging currency risks, currency options are also appropriate instruments for exchange-rate speculations.

Archived under Currency Hedging Comments

Ichimoku technical analysis & online day trading strategies


Visit Our Day Trading Education Site: www.affinitytrading.com Affinity Trading Group is a proprietary trading education firm providing technical analysis courses and classes as well as stock trading strategies for the day trading markets. What makes Affinity different from the other prop…

Archived under Forex Trading Comments (6)

Few Best Forex Trading Tips

Few Best Forex Trading Tips

Forex trading is very complicated for the beginning trader. The idea of trading with one currency next to another, or in pair; however it seems very simple at the first quick look. But at the time when you are really trading then you will quickly realizes earning money through Forex trading is not an easy task.

Market guidelines for forex trading:

You can make huge profits through Forex trading by studying different tips.  You need to choose those tips that have nothing moreover to back them up. In addition to this you will need some analytical software which can give you a realistic tip on Forex trading market move.

Forex4you is the best forecasting tool

 Forex4you is one of the best websites where you can secure all your important of Forex trading.

The information is accumulating at the request of specialist within the industry. There are special recommendations to deal with together short term as well as long term decisions.

Try to experiment with your trade:

Experiments are the key to success when it comes to Foreign exchange currency trading system. Traders who are constantly using the same track of trading they don’t lose their money but however they even don’t earn too much. That’s why you need to always invent some unique best trading strategies but don’t invest too much in any trade.

Don’t bound to create Quick Money:

In Trade Forex there is nothing called quick money. If somebody is creating money quite easily, then probably they have some big experience in Forex trading. Don’t use your whole account in the same transaction because if the market goes down then have to suffer from big loss, therefore try to protect your investment from future uncertainties.

Understand the market analysis:

Usually you have to deal with the four levels of analysis in Forex trading. The first analytical target is identified as the wave. Then you can further move on to the complex analysis. And earlier we have discussed about fundamental and technical analysis.

Rules and Regulations of forex trading:

Learn all the rules and regulations of Forex trading, however you can also create your own rules when become a part of forex trading. This will make sure that you don’t make some obvious mistakes. If you will to stick certain primary rules in place of hopping from corner to corner the different models then only you can handle your trading efficiently.

Archived under Forex News Comments