Forex trading is it real

Homework is an ongoing effort as traders need to be prepared to adapt to changing market conditions, regulations, and world events.

Top forex bonuses

10 Ways to Avoid Losing Money in Forex, forex trading is it real.

Part of this research process involves developing a trading plan—a systematic method for screening and evaluating investments, determining the amount of risk that is or should be taken, and formulating short-term and long-term investment objectives. Once a forex trader opens an account, it may be tempting to take advantage of all the technical analysis tools offered by the trading platform. While many of these indicators are well-suited to the forex markets, it is important to remember to keep analysis techniques to a minimum in order for them to be effective. Using multiples of the same types of indicators, such as two volatility indicators or two oscillators, for example, can become redundant and can even give opposing signals. This should be avoided.

10 ways to avoid losing money in forex

The global forex market is the largest financial market in the world and the potential to reap profits in the arena entices foreign-exchange traders of all levels: from greenhorns just learning about financial markets to well-seasoned professionals with years of trading experience. Because access to the market is easy—with round-the-clock sessions, significant leverage, and relatively low costs—many forex traders quickly enter the market, but then quickly exit after experiencing losses and setbacks. Here are 10 tips to help aspiring traders avoid losing money and stay in the game in the competitive world of forex trading.

Do your homework

Just because forex is easy to get into doesn’t mean due diligence should be avoided. Learning about forex is integral to a trader’s success. While the majority of trading knowledge comes from live trading and experience, a trader should learn everything about the forex markets, including the geopolitical and economic factors that affect a trader’s preferred currencies.

Key takeaways

In order to avoid losing money in foreign exchange, do your homework and look for a reputable broker.

Use a practice account before you go live and be sure to keep analysis techniques to a minimum in order for them to be effective.

It's important to use proper money management techniques and to start small when you go live.

Control the amount of leverage and keep a trading journal.

Be sure to understand the tax implications and treat your trading as a business.

Homework is an ongoing effort as traders need to be prepared to adapt to changing market conditions, regulations, and world events. Part of this research process involves developing a trading plan—a systematic method for screening and evaluating investments, determining the amount of risk that is or should be taken, and formulating short-term and long-term investment objectives.

How do you make money trading money?

Find a reputable broker

The forex industry has much less oversight than other markets, so it is possible to end up doing business with a less-than-reputable forex broker. Due to concerns about the safety of deposits and the overall integrity of a broker, forex traders should only open an account with a firm that is a member of the national futures association (NFA) and is registered with the commodity futures trading commission (CFTC) as a futures commission merchant. each country outside the united states has its own regulatory body with which legitimate forex brokers should be registered.

Traders should also research each broker’s account offerings, including leverage amounts, commissions and spreads, initial deposits, and account funding and withdrawal policies. A helpful customer service representative should have the information and will be able to answer any questions regarding the firm’s services and policies.

Use a practice account

Nearly all trading platforms come with a practice account, sometimes called a simulated account or demo account, which allow traders to place hypothetical trades without a funded account. Perhaps the most important benefit of a practice account is that it allows a trader to become adept at order-entry techniques.

Few things are as damaging to a trading account (and a trader’s confidence) as pushing the wrong button when opening or exiting a position. It is not uncommon, for example, for a new trader to accidentally add to a losing position instead of closing the trade. Multiple errors in order entry can lead to large, unprotected losing trades. Aside from the devastating financial implications, making trading mistakes is incredibly stressful. Practice makes perfect. Experiment with order entries before placing real money on the line.

$5 trillion

The average daily amount of trading in the global forex market.

Keep charts clean

Once a forex trader opens an account, it may be tempting to take advantage of all the technical analysis tools offered by the trading platform. While many of these indicators are well-suited to the forex markets, it is important to remember to keep analysis techniques to a minimum in order for them to be effective. Using multiples of the same types of indicators, such as two volatility indicators or two oscillators, for example, can become redundant and can even give opposing signals. This should be avoided.

Any analysis technique that is not regularly used to enhance trading performance should be removed from the chart. In addition to the tools that are applied to the chart, pay attention to the overall look of the workspace. The chosen colors, fonts, and types of price bars (line, candle bar, range bar, etc.) should create an easy-to-read-and-interpret chart, allowing the trader to respond more effectively to changing market conditions.

Protect your trading account

While there is much focus on making money in forex trading, it is important to learn how to avoid losing money. Proper money management techniques are an integral part of the process. Many veteran traders would agree that one can enter a position at any price and still make money—it’s how one gets out of the trade that matters.

Part of this is knowing when to accept your losses and move on. Always using a protective stop loss—a strategy designed to protect existing gains or thwart further losses by means of a stop-loss order or limit order—is an effective way to make sure that losses remain reasonable. Traders can also consider using a maximum daily loss amount beyond which all positions would be closed and no new trades initiated until the next trading session.

While traders should have plans to limit losses, it is equally essential to protect profits. Money management techniques such as utilizing trailing stops (a stop order that can be set at a defined percentage away from a security’s current market price) can help preserve winnings while still giving a trade room to grow.

Start small when going live

Once a trader has done their homework, spent time with a practice account, and has a trading plan in place, it may be time to go live—that is, start trading with real money at stake. No amount of practice trading can exactly simulate real trading. As such, it is vital to start small when going live.

Factors like emotions and slippage (the difference between the expected price of a trade and the price at which the trade is actually executed) cannot be fully understood and accounted for until trading live. Additionally, a trading plan that performed like a champ in backtesting results or practice trading could, in reality, fail miserably when applied to a live market. By starting small, a trader can evaluate their trading plan and emotions, and gain more practice in executing precise order entries—without risking the entire trading account in the process.

Use reasonable leverage

Forex trading is unique in the amount of leverage that is afforded to its participants. One reason forex appeals to active traders is the opportunity to make potentially large profits with a very small investment—sometimes as little as $50. Properly used, leverage does provide the potential for growth. But leverage can just as easily amplify losses.

A trader can control the amount of leverage used by basing position size on the account balance. For example, if a trader has $10,000 in a forex account, a $100,000 position (one standard lot) would utilize 10:1 leverage. While the trader could open a much larger position if they were to maximize leverage, a smaller position will limit risk.

Keep good records

A trading journal is an effective way to learn from both losses and successes in forex trading. Keeping a record of trading activity containing dates, instruments, profits, losses, and, perhaps most important, the trader’s own performance and emotions can be incredibly beneficial to growing as a successful trader. When periodically reviewed, a trading journal provides important feedback that makes learning possible. Einstein once said that “insanity is doing the same thing over and over and expecting different results.” without a trading journal and good record keeping, traders are likely to continue making the same mistakes, minimizing their chances of becoming profitable and successful traders.

Know tax impact and treatment

It is important to understand the tax implications and treatment of forex trading activity in order to be prepared at tax time. Consulting with a qualified accountant or tax specialist can help avoid any surprises and can help individuals take advantage of various tax laws, such as marked-to-market accounting (recording the value of an asset to reflect its current market levels).

Since tax laws change regularly, it is prudent to develop a relationship with a trusted and reliable professional who can guide and manage all tax-related matters.

Treat trading as a business

It is essential to treat forex trading as a business and to remember that individual wins and losses don’t matter in the short run. It is how the trading business performs over time that is important. As such, traders should try to avoid becoming overly emotional about either wins or losses, and treat each as just another day at the office.

As with any business, forex trading incurs expenses, losses, taxes, risk and uncertainty. Also, just as small businesses rarely become successful overnight, neither do most forex traders. Planning, setting realistic goals, staying organized, and learning from both successes and failures will help ensure a long, successful career as a forex trader.

The bottom line

The worldwide forex market is attractive to many traders because of the low account requirements, round-the-clock trading, and access to high amounts of leverage. When approached as a business, forex trading can be profitable and rewarding, but reaching a level of success is extremely challenging and can take a long time. Traders can improve their odds by taking steps to avoid losses: doing research, not over-leveraging positions, using sound money management techniques, and approaching forex trading as a business.

Exploring scams involved with forex trading

While foreign exchange (forex) investing is a legitimate endeavor and not a scam, plenty of scams have been associated with trading forex. As with many industries, plenty of predators exist out there, looking to take advantage of newcomers. Regulators have put protections in place over the years and the market has improved significantly, making such scams increasingly rare.

Foreign exchange trading involves the trading of pairs of currencies. for example, someone might exchange euros for U.S. Dollars. In september of 2019, 1 euro ranged in value from about $1.09 to about $1.12. So, a trader who exchanged 100 euros for $112 when the value of the dollar is high could profit by exchanging those $112 for euros when the value of the dollar drops back to $1.09 per euro. Such a transaction would result in a net profit of less than 3%, which likely would be wiped out by the broker's commission.

Forex is a legitimate endeavor. You can engage in forex trading as a real business and make real profits, but you must treat it as such. Don't look at forex trading as a get-rich-overnight business, no matter what you may read in hyped-up forex trading guides.

Exchange rates are volatile and can go up or down unpredictably. When accounting for commissions brokers take from transactions, making money requires significant changes in exchange rates in favor of the trader. High profits are possible, but it's not a market where anyone should expect quick and easy cash.

What makes a scam?

Forex trading first became available to retail traders in the late 1990s. the first handful of years was wrought with overnight brokers that seemed to pop up and then close down shop without notice.

The common denominator was that these brokers were based in nonregulated countries. While some did take place in the united states, the majority seemed to originate overseas where the only requirement to set up a brokerage was a few thousand dollars in fees.

A distinct difference exists between a poorly-run brokerage, which isn't necessarily a scam, and a fraudulent one. Even a poorly run brokerage can run for a long time before something takes it out of the game.

Some common examples of scams investors should look for include churning and brokers who simply underestimate risk. Churning involves brokers who execute unnecessary trades for the sole purpose of generating commissions.

Additionally, some brokers often overestimate the ability of investors to make a lot of money quickly and easily through the forex market. They typically prey on new investors who don't understand that forex trading is what is known as a zero-sum game. When a currency's value against another currency gets stronger, the other currency must get proportionally weaker.

How to avoid being scammed

The first step to take is to check the location of the brokerage's headquarters and research how long it has been in business and where they are regulated. The more the better.

If you feel you are being scammed, contact the U.S. Commodity futures trading commission.

The simple act of finding out who you should call if you feel that you've been scammed, before investing with a brokerage, can save you a lot of potential heartache down the road. If you can't find someone to call because the brokerage is located in a non-regulated jurisdiction, this is usually a red flag and a sign that it's best to find more regulated alternatives.

Is FOREX REAL? HOW DOES IT WORK?

11 answers

Forex trading is absolutely real. I have been using a hedge system for the past 7 months that takes as little as 15 minutes a week to manage. For those people who want to go it along it can consume their lives. That is why I use the hedge system. You can set up a demo account and try it out for free for 15 days and see if it is for you. I recommend checking out http://www.Wiseforexinvestor.Com/

If you have any questions please feel free to give me a call.

Yes forex is very much for real and a $1.4 trillion is traded every single day.

Here are a couple of articles you must refer

And this article on why you must invest in forex

Really, however, unless you have a experience do not touch this business, here it is necessary a lot of reading and be with an analytical mind, if it is interesting to read the reviews of people who earn on forex "is forex real?" https://ask.Naij.Com/business/is-forex-real-i13462. People give good advice for beginners and recommend a cool literature on the subject!

FX is real. It's not for newbies to trading. 95% of all new accounts lose their "seed" money within the first 90 days.

However if you're willing to work hard. Take 6 months to a year or more to read, study and practice. You may have a better chance of surviving.

Money management is more important than the percent of wining trades you have. This is an uregulated area. Many brokers truly stink. There are no good ones. Only brokers that are not as bad as others.

Binary options let users trade in currency pairs and stocks for various predetermined time-periods, minimal of which is 30 seconds. Executing trades is straightforward. The system uses user-friendly interfaces, which even an 8 years old kid, can operate without having to read any instructions. But winning trades is not easy.

Binary trading is advertised as the only genuine system that lets users earn preposterous amounts of money in ridiculously short period of time. Advertisers try to implicate as if you can make $350 every 60 seconds; if it was true then binary trading would truly be an astonishing business.

However, does it make any sense? Can every trader make tons of money in binary trading? Who is actually paying all the money or the profit to traders?

The first challenge is finding a trustworthy binary broker; secondly, you need to find a binary trading strategy, which you can use to make profits consistently. Without an effective trading strategy, there is no way you can make money in this business.

Learning a profitable trading strategy is possible, you should watch this presentation video https://tr.Im/16635

It's probably the best way to learn how to win with binary option

Yes it is real. I am a full time forex trader. But unfortunately, unlike stocks and futures markets, forex is a de-centralized market which means there is no centralized body that monitors the market and the participants (clearing houses, brokers ect. ). Because of this retail traders are to beware of unscrupulous brokers who are out to gain profit out of novice traders by using unscrupulous ways.

Forex trading is the buying/selling of a particular currency against another currency. For example, if you think US dollars is gonna strenghthen against japanese yen, then you would BUY USD/JPY pair (buying USD while selling yen). If you think the opposite is true, then you would SELL USD/JPY (selling USD while buying yen). Forex quotes ALWAYS comes in pairs, for example:- USD/JPY, EUR/USD (euro dollar versus USD), GBP/USD (british pounds versus USD). Therefore, you gotta always know which currency is strenghthening against which other currency.

I have attended a lot of seminars, read counless books on forex trading and it all cost me thousands of dollars. The worst thing was i blew up my first account. After that i opened another account and the same thing happened again. I started to wonder why i couldn,t make any money in forex trading. At first i thought i knew everything about trading. Finally i found that the main problem i have was i did not have the right mental in trading. As we know that psychology has great impact on our trading result. Apart from psychology issue, there is another problem that we have to address. They are money management, market analysis, and entry/exit rules. To me money management is important in trading. I opened another account and start to trade profitably after i learnt from my past mistake. I don't trade emotionally anymore.

If you are serious about trading you need to address your weakness and try to fix it. No forex guru can make you professional trader unless you want to learn from your mistake.

The secret word of trading success is "organized". You can't be successful without a strategy, a plan and some kind of technological support. I use a software called "autobinary signals" that is helping me a lot. There are plenty of them on the market. I recommend this one because it's very easy to use (you don't have to be an expert or have special skills to make money with it).

Its real like stock market, stock market dealing stocks while forex deal with money. Depend which company you use to play this "money game' and comissions. While many companies out there are fake so be-aware

Top reasons forex traders fail

The forex market is the largest financial market in the world, with more than $5 trillion traded on average every day. but while there are many forex investors, few are truly successful ones. Many traders fail for the same reasons that investors fail in other asset classes. In addition, the extreme amount of leverage—the use of borrowed capital to increase the potential return of investments—provided by the market, and the relatively small amounts of margin required when trading currencies, deny traders the opportunity to make numerous low-risk mistakes. Factors specific to trading currencies can cause some traders to expect greater investment returns than the market can consistently offer, or to take more risk than they would when trading in other markets.

Forex market trading hazards

Certain mistakes can keep traders from achieving their investment goals. Following are some of the common pitfalls that can plague forex traders:

Not maintaining trading discipline: the largest mistake any trader can make is to let emotions control trading decisions. Becoming a successful forex trader means achieving a few big wins while suffering many smaller losses. Experiencing many consecutive losses is difficult to handle emotionally and can test a trader's patience and confidence. Trying to beat the market or giving in to fear and greed can lead to cutting winners short and letting losing trades run out of control. Conquering emotion is achieved by trading within a well-constructed trading plan that assists in maintaining trading discipline.

Trading without a plan: whether one trades forex or any other asset class, the first step in achieving success is to create and follow a trading plan. "failing to plan is planning to fail" is an adage that holds true for any type of trading. The successful trader works within a documented plan that includes risk management rules and specifies the expected return on investment (ROI). Adhering to a strategic trading plan can help investors evade some of the most common trading pitfalls; if you don't have a plan, you're selling yourself short in what you can accomplish in the forex market.

Failing to adapt to the market: before the market even opens, you should create a plan for every trade. Conducting scenario analysis and planning the moves and countermoves for every potential market situation can significantly reduce the risk of large, unexpected losses. As the market changes, it presents new opportunities and risks. No panacea or foolproof "system" can persistently prevail over the long term. The most successful traders adapt to market changes and modify their strategies to conform to them. Successful traders plan for low probability events and are rarely surprised if they occur. Through an education and adaptation process, they stay ahead of the pack and continuously find new and creative ways to profit from the evolving market.

Learning through trial and error: without a doubt, the most expensive way to learn to trade the currency markets is through trial and error. Discovering the appropriate trading strategies by learning from your mistakes is not an efficient way to trade any market. Since forex is considerably different from the equity market, the probability of new traders sustaining account-crippling losses is high. The most efficient way to become a successful currency trader is to access the experience of successful traders. This can be done through a formal trading education or through a mentor relationship with someone who has a notable track record. One of the best ways to perfect your skills is to shadow a successful trader, especially when you add hours of practice on your own.

Having unrealistic expectations: no matter what anyone says, trading forex is not a get-rich-quick scheme. Becoming proficient enough to accumulate profits is not a sprint—it's a marathon. Success requires recurrent efforts to master the strategies involved. Swinging for the fences or trying to force the market to provide abnormal returns usually results in traders risking more capital than warranted by the potential profits. Foregoing trade discipline to gamble on unrealistic gains means abandoning risk and money management rules that are designed to prevent market remorse.

Poor risk and money management: traders should put as much focus on risk management as they do on developing strategy. Some naive individuals will trade without protection and abstain from using stop losses and similar tactics in fear of being stopped out too early. At any given time, successful traders know exactly how much of their investment capital is at risk and are satisfied that it is appropriate in relation to the projected benefits. As the trading account becomes larger, capital preservation becomes more important. Diversification among trading strategies and currency pairs, in concert with the appropriate position sizing, can insulate a trading account from unfixable losses. Superior traders will segment their accounts into separate risk/return tranches, where only a small portion of their account is used for high-risk trades, and the balance is traded conservatively. This type of asset allocation strategy will also ensure that low-probability events and broken trades cannot devastate one's trading account.

Managing leverage

Although these mistakes can afflict all types of traders and investors, issues inherent in the forex market can significantly increase trading risks. The significant amount of financial leverage afforded forex traders presents additional risks that must be managed.

Leverage provides traders with an opportunity to enhance returns. But leverage and the commensurate financial risk is a double-edged sword that amplifies the downside as much as it adds to potential gains. The forex market allows traders to leverage their accounts as much as 400:1, which can lead to massive trading gains in some cases - and account for crippling losses in others. The market allows traders to use vast amounts of financial risk, but in many cases, it is in a trader's best interest to limit the amount of leverage used.

Most professional traders use about 2:1 leverage by trading one standard lot ($100,000) for every $50,000 in their trading accounts. This coincides with one mini lot ($10,000) for every $5,000 and one micro lot ($1,000) for every $500 of the account value. The amount of leverage available comes from the amount of margin that brokers require for each trade. Margin is simply a good faith deposit that you make to insulate the broker from potential losses on a trade. The bank pools the margin deposits into one very large margin deposit that it uses to make trades with the interbank market. Anyone that has ever had a trade go horribly wrong knows about the dreadful margin call, where brokers demand additional cash deposits; if they don't get them, they will sell the position at a loss to mitigate further losses or recoup their capital.

Many forex brokers require various amounts of margin, which translates into the following popular leverage ratios:

margin	maximum leverage
5%	20:1
3%	33:1
2%	50:1
1%	100:1
0.5%	200:1
0.25%	400:1

The reason many forex traders fail is that they are undercapitalized in relation to the size of the trades they make. It is either greed or the prospect of controlling vast amounts of money with only a small amount of capital that coerces forex traders to take on such huge and fragile financial risk. For example, at a 100:1 leverage (a rather common leverage ratio), it only takes a -1% change in price to result in a 100% loss. And every loss, even the small ones taken by being stopped out of a trade early, only exacerbates the problem by reducing the overall account balance and further increasing the leverage ratio.

Not only does leverage magnify losses, but it also increases transaction costs as a percent of the account value. For example, if a trader with a mini account of $500 uses 100:1 leverage by buying five mini lots ($10,000) of a currency pair with a five-pip spread, the trader also incurs $25 in transaction costs: (1/pip x 5 pip spread) x 5 lots. Before the trade even begins, he or she has to catch up, since the $25 in transaction costs represents 5% of the account value. The higher the leverage, the higher the transaction costs as a percentage of the account value, and these costs increase as the account value drops.

While the forex market is expected to be less volatile in the long term than the equity market, it is obvious that the inability to withstand periodic losses and the negative effect of those periodic losses through high leverage levels are a disaster waiting to happen. These issues are compounded by the fact that the forex market contains a significant level of macroeconomic and political risks that can create short-term pricing inefficiencies and play havoc with the value of certain currency pairs.

Conclusion

Many of the factors that cause forex traders to fail are similar to those that plague investors in other asset classes. The simplest way to avoid some of these pitfalls is to build a relationship with other successful forex traders who can teach you the trading disciplines required by the asset class, including the risk and money management rules required to trade the forex market. Only then will you be able to plan appropriately and trade with the return expectations that keep you from taking an excessive risk for the potential benefits.

While understanding the macroeconomic, technical and fundamental analysis necessary for trading forex is as important as the requisite trading psychology, one of the largest factors that separates success from failure is a trader's ability to manage a trading account. The keys to account management include making sure to be sufficiently capitalized, using appropriate trade sizing and limiting financial risk by using smart leverage levels.

Automated trading systems: the pros and cons

What is an automated trading system?

Automated trading systems — also referred to as mechanical trading systems, algorithmic trading, automated trading or system trading — allow traders to establish specific rules for both trade entries and exits that, once programmed, can be automatically executed via a computer. In fact, various platforms report 70% to 80% or more of shares traded on U.S. Stock exchanges come from automatic trading systems.

Traders and investors can turn precise entry, exit, and money management rules into automated trading systems that allow computers to execute and monitor the trades. One of the biggest attractions of strategy automation is that it can take some of the emotion out of trading since trades are automatically placed once certain criteria are met.

The trade entry and exit rules can be based on simple conditions such as a moving average crossover or they can be complicated strategies that require a comprehensive understanding of the programming language specific to the user's trading platform. They can also be based on the expertise of a qualified programmer.

Automated trading systems typically require the use of software linked to a direct access broker, and any specific rules must be written in that platform's proprietary language. The tradestation platform, for example, uses the easylanguage programming language. On the other hand, the ninjatrader platform utilizes ninjascript. The figure below shows an example of an automated strategy that triggered three trades during a trading session.

A five-minute chart of the ES contract with an automated strategy applied.

Establishing trading "rules"

Some trading platforms have strategy-building "wizards" that allow users to make selections from a list of commonly available technical indicators to build a set of rules that can then be automatically traded. The user could establish, for example, that a long position trade will be entered once the 50-day moving average crosses above the 200-day moving average on a five-minute chart of a particular trading instrument. Users can also input the type of order (market or limit, for instance) and when the trade will be triggered (for example, at the close of the bar or open of the next bar), or use the platform's default inputs.

Many traders, however, choose to program their own custom indicators and strategies. They will often work closely with the programmer to develop the system. While this typically requires more effort than using the platform's wizard, it allows a much greater degree of flexibility, and the results can be more rewarding. Just like anything else in the trading world, there is, unfortunately, no perfect investment strategy that will guarantee success.

Once the rules have been established, the computer can monitor the markets to find buy or sell opportunities based on the trading strategy's specifications. Depending on the specific rules, as soon as a trade is entered, any orders for protective stop losses, trailing stops and profit targets will be automatically generated. In fast-moving markets, this instantaneous order entry can mean the difference between a small loss and a catastrophic loss in the event the trade moves against the trader.

Advantages of automated systems

There is a long list of advantages to having a computer monitor the markets for trading opportunities and execute the trades, including:

Minimizing emotions

Automated trading systems minimize emotions throughout the trading process. By keeping emotions in check, traders typically have an easier time sticking to the plan. Since trade orders are executed automatically once the trade rules have been met, traders will not be able to hesitate or question the trade. In addition to helping traders who are afraid to "pull the trigger," automated trading can curb those who are apt to overtrade — buying and selling at every perceived opportunity.

Backtesting

Backtesting applies trading rules to historical market data to determine the viability of the idea. When designing a system for automated trading, all rules need to be absolute, with no room for interpretation. The computer cannot make guesses and it has to be told exactly what to do. Traders can take these precise sets of rules and test them on historical data before risking money in live trading. Careful backtesting allows traders to evaluate and fine-tune a trading idea, and to determine the system's expectancy – i.E., the average amount a trader can expect to win (or lose) per unit of risk.

Preserving discipline

Because trade rules are established and trade execution is performed automatically, discipline is preserved even in volatile markets. Discipline is often lost due to emotional factors such as fear of taking a loss, or the desire to eke out a little more profit from a trade. Automated trading helps ensure discipline is maintained because the trading plan will be followed exactly. In addition, "pilot error" is minimized. For instance, if an order to buy 100 shares will not be incorrectly entered as an order to sell 1,000 shares.

One of the biggest challenges in trading is to plan the trade and trade the plan. Even if a trading plan has the potential to be profitable, traders who ignore the rules are altering any expectancy the system would have had. There is no such thing as a trading plan that wins 100% of the time. After all, losses are a part of the game. But losses can be psychologically traumatizing, so a trader who has two or three losing trades in a row might decide to skip the next trade. If this next trade would have been a winner, the trader has already destroyed any expectancy the system had. Automated trading systems allow traders to achieve consistency by trading the plan.

Improving order entry speed

Since computers respond immediately to changing market conditions, automated systems are able to generate orders as soon as trade criteria are met. Getting in or out of a trade a few seconds earlier can make a big difference in the trade's outcome. As soon as a position is entered, all other orders are automatically generated, including protective stop losses and profit targets. Markets can move quickly, and it is demoralizing to have a trade reach the profit target or blow past a stop-loss level – before the orders can even be entered. An automated trading system prevents this from happening.

Diversifying trading

Automated trading systems permit the user to trade multiple accounts or various strategies at one time. This has the potential to spread risk over various instruments while creating a hedge against losing positions. What would be incredibly challenging for a human to accomplish is efficiently executed by a computer in milliseconds. The computer is able to scan for trading opportunities across a range of markets, generate orders and monitor trades.

Minimize emotional trading

Preserves the trader's discipline

Allows multiple accounts

Mechanical failures can happen

Requires the monitoring of functionality

Drawbacks of automated systems

Automated trading systems boast many advantages, but there are some downfalls and realities traders should be aware of.

Mechanical failures

The theory behind automated trading makes it seem simple: set up the software, program the rules and watch it trade. In reality, automated trading is a sophisticated method of trading, yet not infallible. Depending on the trading platform, a trade order could reside on a computer, not a server. What that means is that if an internet connection is lost, an order might not be sent to the market. There could also be a discrepancy between the "theoretical trades" generated by the strategy and the order entry platform component that turns them into real trades. Most traders should expect a learning curve when using automated trading systems, and it is generally a good idea to start with small trade sizes while the process is refined.

Monitoring

Although it would be great to turn on the computer and leave for the day, automated trading systems do require monitoring. This is because of the potential for technology failures, such as connectivity issues, power losses or computer crashes, and to system quirks. It is possible for an automated trading system to experience anomalies that could result in errant orders, missing orders or duplicate orders. If the system is monitored, these events can be identified and resolved quickly.

Over-optimization

Though not specific to automated trading systems, traders who employ backtesting techniques can create systems that look great on paper and perform terribly in a live market. Over-optimization refers to excessive curve-fitting that produces a trading plan unreliable in live trading. It is possible, for example, to tweak a strategy to achieve exceptional results on the historical data on which it was tested. Traders sometimes incorrectly assume a trading plan should have close to 100% profitable trades or should never experience a drawdown to be a viable plan. As such, parameters can be adjusted to create a "near perfect" plan — that completely fails as soon as it is applied to a live market.

Avoid the scams

While you search for your preferred system, remember: if it sounds too good to be true, it probably is. There are a lot of scams going around. Some systems promise high profits all for a low price. So how do you tell whether a system is legitimate or fake? Here are a few basic tips:

Scrutinize anything you'd have to pay for before you pay or lay down any money for a trading account and always ask questions. If you don't, you may lose money in the end.

Do your research and make sure you know everything about the system in question. And be sure to read the terms and conditions before you commit.

Are there any testimonials you can read? Check third-party sites or even financial regulatory sites for reviews.

Does the system come with a trial period? A lot of scam sites won't offer you a trial.

Server-based automation

Traders do have the option to run their automated trading systems through a server-based trading platform. These platforms frequently offer commercial strategies for sale so traders can design their own systems or the ability to host existing systems on the server-based platform. For a fee, the automated trading system can scan for, execute and monitor trades, with all orders residing on the server. This often results in potentially faster, more reliable order entries.

Before you automate

The word "automation" may seem like it makes the task simpler, but there are definitely a few things you will need to keep in mind before you start using these systems.

Ask yourself if you should use an automated trading system. There are definitely promises of making money, but it can take longer than you may think. Will you be better off to trade manually? After all, these trading systems can be complex and if you don't have the experience, you may lose out.

Know what you're getting into and make sure you understand the ins and outs of the system. That means keeping your goals and your strategies simple before you turn to more complicated trading strategies.

And remember, there is no one-size-fits-all approach. You will need to figure out your preferred strategy, where you want to apply it and just how much you want to customize to your own personal situation. All of that, of course, goes along with your end goals

The bottom line

Although appealing for a variety of reasons, automated trading systems should not be considered a substitute for carefully executed trading. Technology failures can happen, and as such, these systems do require monitoring. Server-based platforms may provide a solution for traders wishing to minimize the risks of mechanical failures. Remember, you should have some trading experience and knowledge before you decide to use automated trading systems.

3 things I wish I knew when I started trading forex

Trading forex - what I learned

Trading forex is not a shortcut to instant wealth.

Excessive leverage can turn winning strategies into losing ones.

Retail sentiment can act as a powerful trading filter.

Everyone comes to the forex market for a reason, ranging between solely for entertainment to becoming a professional trader. I started out aspiring to be a full-time, self-sufficient forex trader. I had been taught the 'perfect' strategy . I spent months testing it and backtests showed how I could make $25,000-$35,000 a year off of a $10,000 account. My plan was to trade forex for a living and let my account compound until I was so well off, I wouldn't have to work again in my life. I was dedicated and I committed myself to the plan 100%.

Sparing you the details, my plan failed. It turns out that trading 300k lots on a $10,000 account is not very forgiving. I lost 20% of my account in three weeks. I didn't know what hit me. Something was wrong. Luckily, I stopped trading at that point and was fortunate enough to land a job with a forex broker. I spent the next couple of years working with traders around the world and continued to educate myself about the forex market. It played a huge role in my development to be the trader I am today. Three years of profitable trading later, it's been my pleasure to join the team at dailyfx and help people become successful or more successful traders.

The point of me telling this story is because I think many traders can relate to starting off in this market, not seeing the results that they expected and not understanding why. These are the three things I wish I knew when I started trading forex.

1) forex is not a get rick quick opportunity

Contrary to what you’ve read on many websites across the web, forex trading is not going to take your $10,000 account and turn it into $1 million. The amount we can earn is determined more by the amount of money we are risking rather than how good our strategy is. The old saying “it takes money to make money” is an accurate one, forex trading included.

But that doesn’t mean it is not a worthwhile endeavor; after all, there are many successful forex traders out there that trade for a living. The difference is that they have slowly developed over time and increased their account to a level that can create sustainable income.

I hear about traders all the time targeting 50%, 60% or 100% profit per year, or even per month, but the risk they are taking on is going to be pretty similar to the profit they are targeting. In other words, in order to attempt to make 60% profit in a year, it's not unreasonable to see a loss of around 60% of your account in a given year.

"but rob, I am trading with an edge, so I am not risking as much as I could potentially earn" you might say. That's a true statement if you have a strategy with a trading edge. Your expected return should be positive, but without leverage, it is going to be a relatively tiny amount. And during times of bad luck, we can still have losing streaks. When we throw leverage into the mix, that's how traders attempt to target those excessive gains. Which in turn is how traders can produce excessive losses. Leverage is beneficial up to point, but not when it can turn a winning strategy into a loser.

Is it real to earn on forex without investments?

A currency speculation is the basis of earnings on forex. That is traders trade according to a simple principle “buy cheap, sell expensive”. The positive difference between buy and sell prices is the desired profit of a trader.

You can earn in the forex market without investments. Clearly, on your trading account should be the initial sum to open transactions. But in addition to trading, there are other alternatives for obtaining income on forex. Some are directly related to trading, others do not have anything in common with it.

Justforex team decided to tell you about the most popular alternatives of earnings in the forex market.

Participation in affiliate programs

Affiliate programs are one of the most popular ways of profit-making which do not require investments. You can become a partner and receive a stable income by participating in the affiliate programs. The partner attracts active clients to the broker through the specialized resources: site or blog, social networks, advertising platforms, etc. The partner’s profit depends on the activity of the attracted clients. The reward is expressed either in percentage or in fixed amount. The more trading lots are made by an attracted client, the higher is the revenue.

Contests on demo accounts

Brokers often hold competitions on demo accounts. Such competitions are an excellent opportunity to get additional profit without risking own capital. Trading is conducted on virtual money, and the winner gets a withdrawable cash reward or valuable prizes.

No deposit bonuses

No deposit bonuses can be used as starting capital. Brokers offer no-deposit or welcome bonuses to attract potential clients to the company. They deposit the trader’s account with a small amount for the registration. Bonus funds are not available for withdrawal and can be used only for trading. But the profit earned using bonus funds can be withdrawn. No deposit bonuses allow traders to try real trading and test the conditions of a new broker without expenses.

PAMM accounts

PAMM-accounts or trust management is a kind of cooperation between a trader and an investor. The investor trusts his own funds to the managing trader, and the trader makes the transactions on these funds and receives a predetermined percentage of profit. PAMM-accounts are beneficial for both parties: for investors, PAMM-accounts are a profit without deep knowledge in the forex sphere, for managers – an additional profit without investing own funds. But note, this method is opened only for professional traders with profitable trading strategies.

Forum posting

Paid posts on specialized forums or blogs are available to any internet user. Forum posting does not require special skills and financial investments. You post messages and get paid. But your posts should correspond to the subject of the forum and be informative, otherwise, they can get into spam.

Forex offers many ways of earnings without investment. Some methods require professionalism and skills, others – access to the internet and the desire. Everyone can choose the right variant for themselves and start making money.

Forex trading

To date, trading on the stock market forex is very very successful. It should be noted that only recently there has been a steady growth of traders. Unfortunately, not all people have estimated the benefits of this type of earnings.

For investors, forex brokers offer a trust management service, namely investing funds in PAMM-accounts, the convenience of which can be assessed using a demo-mode.

On the internet, you can often find discussions on the topic of forex, they say, who has earned there and is it real? Namely, because of conducting such discussions at forums and in various chat rooms, myths were born, which we will tell you about in this article.

It’s almost impossible to earn money on the forex market, and if it does, then no more than 10% of the initial deposit.

Earnings in the forex market depend directly on the skills of the trader. You need to be able to buy in time, and then profitably sell the currency. However, we must admit that from a large number of newcomers on forex, it’s only 10-15% of the money that can be earned normally. However, this does not justify the above belief. By the way, unlike direct foreign exchange operations with exchange offices, forex participants use the so-called marginal and leverage trading system.

When going from demo mode to real, the trader is experiencing new difficulties.

It should be said that this is pure, although confirmed by many participants of forex. The thing is that the transition from work on a demo account to real trading, as a rule, involves some difficulties. The fact that you successfully trade in virtual money can not at all serve as a guarantee of your profit when working with a real account. Technically, when changing from demo to real, only the processing speed of your application is changed by the broker. You will not be able to conclude a profitable deal with a second jump in the market. Discarding the assumption that the broker began to draw quotes, knocking down your stops and adhering to the execution of orders, waiting for a convenient quote (this problem is solved within the framework of the correct choice of the broker), in fact, when going from demo to real, everything rests first in psychology. If you have mastered the technical, fundamental and information analysis, correctly follow the principles of money management, regularly win on a demo account, then a successful transition to the real will be determined basically by one factor – are you able to treat your own money as to some tool. Are you ready not only to earn, but also lose money?

For trading on forex, you need large amounts.

You can start your own forex trading with a minimum amount. This opportunity for individuals appeared with the introduction of so-called margin trading. The sense of margin is that to purchase a certain amount of currency you need to have only 1% of the contract value. The rest is credited to you by the brokerage office at the time of the transaction. After that, the loan is automatically withdrawn back, and all the profits earned with its help remain with you.

In forex you need to turn to a guru in order to be confident in your earnings.

In fact, there are exchange gurus on forex that allegedly can accurately predict market behavior. However, as for the fact that they must always be treated, it is a delusion. In fact, the guru is respected in the forex market as long as all that he predicts, comes true, and not the fact that tomorrow the guru will not be mistaken. Therefore, it makes no sense to approach the guru. However, just ask what and how the stock exchange is still worth it.

The key to success in the forex market is a good psychological state.

And it’s true, this statement can not be called a myth. After all, a lot of psychological loads are being brought down on the trader during work in the stock market, with which one must fight. It is the psychological aspect that will help the trader to pave the path to his enrichment.It should be said that experts point out that a balanced trader can save his deposit for a long time, while a trader with a shaky psychological state will lose him without fail. All this tells us that when trading in the forex market you should always give a report to your actions, while being in a positive mood.

In forex, the main ingredient is luck.

Forex is an elite stock exchange. On forex, people who really know how to analyze the behavior of the market with the help of certain tools, and most importantly with the help of their heads! The share of luck, of course, is present for one of the parties concluding the deal. However, all the main component is definitely not the trader’s luck in carrying out a particular transaction. Usually such statements are made by “burnt-out” traders, who do not have everything in forex as they would like.

It is not necessary to develop a trading system for forex.

Here it is necessary to say that this is a real myth. A trader who really wants to earn money on the stock market must necessarily develop an individual trading system, which he will follow in the future. Usually, a beginner trader develops his own trading system during training. This is a long-term process. In the future, the trading strategy should be constantly adjusted taking into account the realities of the market. The trading procedure can include both the trading strategy and the trading plan and the daily routine and any other rules that form the trader’s mentality. The trading method is deeply individual and is created by each trader for himself.

You can work in the forex market, but by following the clear rules that can be found on the internet.

This statement can not be called both true and myth. Rather, it can be called 50% true, and 50% myth. The truth is that really, in order to ensure that beginners are not mistaken at the beginning of their career growth will have to learn the advice of professionals. However, further follow the “clear rules” do not need, because a trader is an individual trader in the foreign exchange market. If everyone trades in the same scheme, only 1% of the total number of traders will receive profit. Therefore, remember that to use the advice of professionals, and perhaps their methods of trade is only at the initial stage. Next, you must develop the scheme by which you will trade, and it must be strictly individual.

Forex trading is a variant of gambling.

Forex is an international currency exchange market, in which hundreds of banks, investment companies and individuals earn their living. The only similarity of forex with the casino is that if you make deals, hoping only for luck – then you can both lose your capital, and several times increase it in a short time. The difference is that in a casino you can not always win, but here it is quite real. In addition, no one will give you a loan for playing in a casino, whereas on a forex such a loan is supposed to be initially based on the terms of the “game”. Considering forex as a business, working systemically and seriously, you can reduce the number of failures to a minimum, and the number of profitable trades – constantly increase.

For trading in forex, you need a special financial education.

A person with any education can trade on forex. Intellect, self-discipline and ability to restrain emotions are important here. Studying to work in the foreign exchange market, you acquire valuable and useful skills. They learn to react quickly to changes in data, to compare the huge streams of stock information on which to build analysis of your future transactions. Many successful traders did not have a higher education at all, but they had the necessary analytical skills.

How to make money trading forex

How does forex trading work?

In the forex market, you buy or sell currencies.

Placing a trade in the foreign exchange market is simple. The mechanics of a trade are very similar to those found in other financial markets (like the stock market), so if you have any experience in trading, you should be able to pick it up pretty quickly.

And if you don’t, you’ll still be able to pick it up….As long as you finish school of pipsology, our forex trading course!

The objective of forex trading is to exchange one currency for another in the expectation that the price will change.

More specifically, that the currency you bought will increase in value compared to the one you sold.

Trader’s action	EUR	USD
you purchase 10,000 euros at the EUR/USD exchange rate of 1.1800	+10,000	-11,800*
two weeks later, you exchange your 10,000 euros back into U.S. Dollar at the exchange rate of 1.2500	-10,000	+12,500**
you earn a profit of $700	0	+700

*EUR 10,000 x 1.18 = US $11,800
** EUR 10,000 x 1.25 = US $12,500

An exchange rate is simply the ratio of one currency valued against another currency.

For example, the USD/CHF exchange rate indicates how many U.S. Dollars can purchase one swiss franc, or how many swiss francs you need to buy one U.S. Dollar.

How to read a forex quote

Currencies are always quoted in pairs, such as GBP/USD or USD/JPY.

The reason they are quoted in pairs is that, in every foreign exchange transaction, you are simultaneously buying one currency and selling another.

How do you know which currency you are buying and which you are selling?

Excellent question! This is where the concepts of base and quote currencies come in…

Base and quote currency

Whenever you have an open position in forex trading, you are exchanging one currency for another.

Currencies are quoted in relation to other currencies.

Here is an example of a foreign exchange rate for the british pound versus the U.S. Dollar:

The first listed currency to the left of the slash (“/”) is known as the base currency (in this example, the british pound).

The base currency is the reference element for the exchange rate of the currency pair. It always has a value of one.

The second listed currency on the right is called the counter or quote currency (in this example, the U.S. Dollar).

In the example above, you have to pay 1.21228 U.S. Dollars to buy 1 british pound.

When selling, the exchange rate tells you how many units of the quote currency you get for selling ONE unit of the base currency.

In the example above, you will receive 1.21228 U.S. Dollars when you sell 1 british pound.

The base currency represents how much of the quote currency is needed for you to get one unit of the base currency

If you buy EUR/USD this simply means that you are buying the base currency and simultaneously selling the quote currency.

In caveman talk, “buy EUR, sell USD.”

You would buy the pair if you believe the base currency will appreciate (gain value) relative to the quote currency.

You would sell the pair if you think the base currency will depreciate (lose value) relative to the quote currency.

With so many currency pairs to trade, how do forex brokers know which currency to list as the base currency and the quote currency?

Fortunately, the way that currency pairs are quoted in the forex market is standardized.

You may have noticed that currencies quoted as a currency pair are usually separated with a slash (“/”) character.

Just know that this is a matter of preference and the slash may be omitted or replaced by a period, a dash, or nothing at all.

For example, some traders may type “EUR/USD” as “EUR-USD” or just “EURUSD”. They all mean the same thang.

“long” and “short”

First, you should determine whether you want to buy or sell.

If you want to buy (which actually means buy the base currency and sell the quote currency), you want the base currency to rise in value and then you would sell it back at a higher price.

In trader talk, this is called “going long” or taking a “long position.” just remember: long = buy.

If you want to sell (which actually means sell the base currency and buy the quote currency), you want the base currency to fall in value and then you would buy it back at a lower price.

This is called “going short” or taking a “short position”.

Just remember: short = sell.

Flat or square

If you have no open position, then you are said to be “flat” or “square”.

Closing a position is also called “squaring up“.

The bid, ask and spread

All forex quotes are quoted with two prices: the bid and ask.

In general, the bid is lower than the ask price.

What is “bid”?

The bid is the price at which your broker is willing to buy the base currency in exchange for the quote currency.

This means the bid is the best available price at which you (the trader) can sell to the market.

If you want to sell something, the broker will buy it from you at the bid price.

What is “ask”?

The ask is the price at which your broker will sell the base currency in exchange for the quote currency.

This means the ask price is the best available price at which you can buy from the market.

Another word for ask is the offer price.

If you want to buy something, the broker will sell (or offer) it to you at the ask price.

What is “spread”?

The difference between the bid and the ask price is known as the SPREAD.

On the EUR/USD quote above, the bid price is 1.34568 and the ask price is 1.34588. Look at how this broker makes it so easy for you to trade away your money.

If you want to sell EUR, you click “sell” and you will sell euros at 1.34568.

If you want to buy EUR, you click “buy” and you will buy euros at 1.34588.

Here’s an illustration that puts together everything we’ve covered in this lesson:

so, let's see, what we have: when approached as a business, forex trading can be profitable and rewarding. Find out what you need to do to avoid big losses as a beginner. At forex trading is it real