How To Understand The Forex Exchange Market ???

The Forex Market also known as the Foreign Exchange Market, has been around for thirty years and is simply the trading and selling of currencies between two countries.

What is the difference between the Foreign Market and the Stock Market you ask? If you are trading within the stock market, you are trading within your own country.

Our stock market in the United States has set hours of trading and is limited to trading within your own country and currency. The FX market is global which means you can trade with several countries and currencies.

Trading in the stock market limits you to your own country and currency, whereas forex trades are global, meaning selling and trading with many other countries and currencies.

The forex market trader must be disciplined as the US stock market trader, so that they can read the market signals that will help them determine when to enter and exit the market.

Experts suggest that a trader must learn to be disciplined and not let their emotions get the best of them in order to ride out the long term and make the profits they hoped for.

Market signals come from charts that have a mathematical formula tied to the prices and times within the trades.

Experienced traders look for signs or signals that signify the right time to enter or exit the market. These indicators or charts are based on a mathematical formula applied to the prices and times within the trades.

A good trader will observe and use one-minute or sixty-minute charts carefully, which are updated constantly, and are a major trading signal for them.

If you would like to try your hand in the foreign exchange market, you will want to observe all the market signals and patterns and trends so you can make the best trading decision and the most profits in this lucrative system.

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Trading Personality

Forex traders come in many different shapes and sizes. There are male traders, female traders, fat traders, skinny traders, beautiful traders, ugly traders, slow traders, fast traders, professional traders, amateur traders, fur traders … and the list goes on.

Each trader has their own personality, their own personal schedule, their own appetite for risk, their own pain threshold and their own bankroll.

Some traders might have several things in common, but most will be different. The point is each of you are unique. And depending on your personality, personal preferences, and situation, how you trade will be a driving factor in determining your success.

In order to figure out how you should trade, you must first uncover your own “trading personality.” Your trading personality will determine the trading style and method that’s compatible for you.

Trading is not like a t-shirt. There is no one-size-fits-all. There is no single plan for all traders.

I challenge you to perform a self-assessment on your personality, behaviors, beliefs, and mindset. Do you consider yourself disciplined? Are you risk averse or a big risk taker? Are you indecisive or spontaneous? Are you patient or a firecracker? Would you prefer to go bungee jumping or visit a museum? Do you like your martini shaken or stirred?

An excellent way to help you with your self-assessment is to keep a trading journal. It will help you to analyze your thought processes after the trade, and identify your strengths and weaknesses in your trading. Understanding your personality is one thing, but understanding it while you trade is a totally different story. A trading journal allows you to review your wining and losing trades and pinpoint specific reasons on why you won or lose.

Now, before we dive in to the different components of trading styles, let’s look at the profiles of a few traders, their trading personalities, and how it’s affected their lives outside of trading.

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Starting your own trading

The presented article is intended for those who just turned their eyes toward Forex. Beginning traders who are still learning the basics of the foreign exchange market may also find something of interest here. While experienced traders won't gain anything worth their time reading this article.

Basically there are 4 steps which can be defined as "must do" for those who wish to start trading Forex. Though, their order is not particularly important, the more important part is their content, to which the great attention and responsibility must be paid.

First step is finding a right Forex broker which will be your main tool in trading. You can have a great strategy, good technical analysis skills or an outstanding intuition but you will eventually fail if you choose a bad broker. A good Forex broker is one that will not still your money, will be doing real trading with your positions, supports your preferred deposit/withdraw methods and has fast and helpful user support service. It is nice if a broker is registered with some sort of governmental financial commission. One of the most important aspects of the broker is it's trading platform — but for a new trader this part is not so important as for expert traders. Still you'll probably want to trade with some powerful and informative platform as a MetaTrader or its analogs. For new traders the more important is a demo account which can be used to trade virtual money while you are training your Forex skills. If you are new trader, start only with the demo account! Don't lose your money on your first mistakes!

Second step is learning the basics of Forex trading. If you already found your Forex broker, you will easily get all information from its website or user support. There are many articles and websites dedicated to Forex basics in the World Wide Web. All you need to do is just google for "forex trading basics" and you'll find everything you wanted and even more. This step shouldn't be underestimated, because trying to trade without even understanding how the market works is not only very risky, it will also become boring very soon.

Third step is about education. Forex trading education is not similar to any other education you probably have got in your life. Forex market is very chaotic, so is the education — there are no fixed rules and all time laws, it is unstable and dynamical. So, to be on the top you must learn new things about Forex regularly and constantly. Try to read as many books, articles other traders' opinions as you can. The more you learn, the more educated you will be. And with good Forex education you will be able to create very sophisticated and effective trading strategies.

Fourth step is a final one; at least I consider it to be a final one. To achieve the successful results in the Forex market you need to develop your own strategies. While you are learning you'll be satisfied with known strategies and probably even Forex signals. But true goal which leads to successful Forex trading is to develop your own strategies. Not one strategy, but to follow the market day by day, developing new strategies and improving those which began to fail. And this comes not only to the trading strategy (this part is obvious), but also to the money management strategy (this part is often underestimated). While you gain experience in trading you'll inevitably build such strategies that will fit your trading style, you character and your life as best as they can. And after that, trading will become a real pleasure, which will eventually lead to your financial freedom.

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An Introduction to Forex Trading

A lot of individuals have started getting into Foreign Exchange trading, more popularly known as Forex Trading. The foreign exchange market is considered to be one of, if not the, most liquid market today.

What exactly is Foreign Exchange? Foreign Exchange, also known as Forex or simply FX, is a term used to refer to the trading of the different currencies of the world. This term caters to the Forex market - which is the biggest market in the world, trading more than USD1.5 trillion in a single day.

Most of trading is speculative, with just a percentage of activity corresponding to governments and companies conversion needs.

Forex trading, unlike trading in the stock market, is not carried out through a central exchange, but instead conducted through an interbank market. This interbank market is mostly described as an over the counter market wherein trading of currencies takes place between two correspondents making a trade directly, either over the phone or through electronic networks worldwide.

Trading for the foreign exchange market has its main centers of activity in Sydney, Tokyo, Frankfurt, New York, and London. This distribution of trading centers world wide indicates that forex trading caters to a 24 hour market.

In forex trading, some of the most frequently traded currencies are the major currencies such as the EURUSD, USDJPY, USDCHF, and GBPUSD. The spot market is the most vital market since it contains the largest volume. This market is called as such since trades done in this market are settled immediately - which means settlement within two banking days.

With other ways to earn money and trade, why consider forex trading? Forex trading has certain advantages over other forms of market trading. One of its major advantages is the 24-hour trading window, giving traders an opportunity to instantly react to news that affects the market as it happens. Market liquidity is also a factor. There will always be sellers and buyers to conduct transactions with. This liquidity, which comes from banks that provide liquidity from investors, institutions and other market players, also helps in ensuring the stability of prices. The absence of commissions makes forex trading a very attractive opportunity for investors who want to make deals frequently.

The abundance of opportunities for trading is also another advantage of forex trading. Due to the constant movement of the market, trading is always an option - whether a currency is weakening or gaining strength against other currencies. Trading in this manner ensure that the different currencies work against each other, thereby ensuring the presence of more opportunities to make deals.

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