Internet Users Hbk - Chapter 14a Forex (FX) Follies - A gamblers heaven
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I Read Your Ebook, and it Gave Me A Headache! - By Dr Don Yates Sr PhD
It is a gamble, yes because for every trade, there are winners and losers. It is high stakes, high risk and fast moving. Like any gamble, there are some winners, winners that have learned the trade, winners have a winner mindset, winners are those that have prepared, learned and understand the gamble. Winners that win more than they lose.
Forex is about you and the trade, it is not about networking, affiliations personal relationship, advertising, SEO and all the other factors that complicate other forms of online income.
Herein we cover the basic Forex tools, selected Robots or Expert Advisors, Mindset and Scams. Forex trading used to be for the “big boys” only. In the late 1990’s, online trading for individuals began, following suite with stock market programs like eTrade. These new Forex sites use software call “bots” to automate your trades. The bots make the decision to trade or not for you.
Because these programs are automated; most vendors advise you can simply install the bot and “walk away” Do Not! We will look at a few of these Bots. This is a grave mistake on your part if you allow the robots to run your Forex business as will be shown in this section.
Never invest more than you can afford to lose! If you do not have time to monitor your trades, don’t Trade
Because you are not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy. In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country's economy, compared to the other countries' economies.
Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.
Until the late 1990's, only the "big guys" could play this game. The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with! Forex was originally intended to be used by bankers and large institutions - and not by us "little guys".
However, because of the rise of the Internet, online Forex trading firms are now able to offer trading accounts to 'retail' traders like us. All you need to get started is a computer, a high-speed Internet connection, and the information contained within this site.
BabyPips.com was created to introduce novice or beginner traders to all the essential aspects of foreign exchange, in a fun and easy-to-understand manner. BabyPips
Typical 100:1 leverage is used
It is “Other People’s Money.” Something happens when suddenly you go live and it is your money. Your fears and emotions take over, and you start losing instead of winning. These same fears and emotions can attack you when you have a few losses in a row from your Forex Expert.
When trading Forex you only need a simple trading system to win and anyone can learn a method which can win in a few weeks but even if it’s a good system. You need to trade it with discipline to succeed most traders simply cannot do this and we will look this key trait in a moment but first, let’s start with how to learn Forex correctly and that means accepting this key Fact.
If you can get the right Forex mindset, you can enjoy currency trading success and earn a great second or life changing income. Always keep in mind in Forex trading the trader doesn't get beaten by the market, he beats himself.
Each trade can have difference Stop Loss and/or Take Profit settings, or you can ride the trade without limits and close when you want. You can change your bet, for example if the trade is going against you, you can close the trade to minimize your loss.
If you see a long-term trade that you like, but it is temporarily going against you; you can double up with the opposite trade, take your profits and continue with the original trade. If the trade is in your favor, but weak, you can close the trade. Watch the charts for the optimum time to close.
If the trade is in your favor and going better than you expected, you can increase your take profit settings. If you particularly like a certain trade, you can place multiple trades and bets for that same trade. You can hedge yourself if you are unsure of the trade, place a buy and a sell, or maybe two buys and one sell for the same pair. If you walk away while you have an active trade or several trades, you can lose everything!
If You Do Trade – You Cannot Afford NOT to Keep an Eye on Your Trade
Many thousands of dollars and hours after hours were wasted, except for the learning: the big people have got us over a barrel. For me, it did not matter whether I joined a site on the recommendation of my big boy membership, a pre-launch - with advance warning, a new launch, or an older established program – until your prepared yourself and learn, they all just take your money.
It is difficult to compete against the same person who created the program, because they have their established downlines, marketing plans and advertising that the big boys can afford. We all wind up selling the same program; the creator, their downlines and us wannabes. Further, I cannot hype my potential customers so maybe that why I am not so successful online.
Spillover seems like just a word, because I never got any. No sponsoring required never happened for me, Help from my sponsor never was there. Just join have never produced the so-called guaranteed results. Support systems are a farce; you get no response, or you get a useless response.
You success can help change that for me. I think you got the message by now.
- Low Spreads - The spread, calculated in "pips", is the difference between the price at which a currency can be purchased and the price at which it can be sold at any given point in time. Forex brokers don't charge a commission, so this difference is how they make money. In comparing brokers, you will find that the difference in spreads inforex is as great as the difference in commissions in the stock arena.
- Quality Institution - Unlike equity brokers,forex brokers are usually tied to large banks or lending institutions because of the large amounts of capital required (leverage they need to provide). Also, forex brokers should be registered with the Futures Commission Merchant (FCM) and regulated by the Commodity Futures Trading Commission (CFTC). You can find this and other financial information and statistics about a forex brokerage on its website or on the website of its parent company.
- Extensive Tools and Research - Forex brokers offer many different trading platforms for their clients - just like brokers in other markets. These trading platforms often feature real-time charts, technical analysis tools, real-time news and data, and even support for trading systems. Before committing to any broker, be sure to request free trials to test different trading platforms. Brokers usually also provide technical and fundamental commentaries, economic calendars and other research.
- Wide Range of Leverage Options - Leverage is necessary inforex because the price deviations (the sources of profit) are merely fractions of a cent. Leverage, expressed as a ratio between total capital available to actual capital, is the amount of money a broker will lend you for trading.
Bottom Line: If You Have Limited Capital, Make Sure Your Broker Offers High Leverage.
If Capital Is Not A Problem, Any Broker With A Wide Variety Of Leverage Options Should Do.
A Variety Of Options Lets You Vary The Amount Of Risk You Are Willing To Take. For Example, Less Leverage (And Therefore Less Risk) May Be Preferable For Highly Volatile (Exotic) Currency Pairs.
- Account Types - Many brokers offer two or more types of accounts. The smallest account is known as a mini account and requires you to trade with a minimum of, say, $250, offering a high amount of leverage (which you need in order to make money with so little initial capital). The standard account lets you trade at a variety of different leverages, but it requires a minimum initial capital of $2,000. Finally, premium accounts, which often require significant amounts of capital, let you use different amounts of leverage and often offer additional tools and services.
- Sniping or Hunting - Sniping and hunting - or prematurely buying or selling near preset points - are shady acts committed by brokers to increase profits. Obviously, no broker admits to committing these acts, but a notion that a broker has practiced sniping or hunting is commonly believed to be true. Unfortunately, the only way to determine which brokers do this and which brokers don't is to talk to fellow traders. There is no blacklist or organization that reports such activity.
- Strict Margin Rules - When you are trading with borrowed money, your broker has a say in how much risk you take. As such, your broker can buy or sell at its discretion, which can be a bad thing for you. Let's say you have a margin account, and your position takes a dive before rebounding to all-time highs. Well, even if you have enough cash to cover, some brokers will liquidate your position on a margin call at that low. This action on their part can cost you dearly.
Bottom Line: Again, Talk To Others In Person Or Visit Online Discussion Forums To Find Out Who The Honest Brokers Are.
Signing up for a forex account is much the same as getting an equity account. The only major difference is that, for forex accounts, you are required to sign a margin agreement. This agreement states that you are trading with borrowed money, and, as such, the brokerage has the right to interfere with your trades to protect its interests. Once you sign up, simply fund your account, and you'll be ready to trade! Investopedia
- Play with the platform on your demo account; figure out how things change from a 1 minute chart to a 1 hour, 1 week etc.
- Click and hold the click to move to drag the chart to the right to look at history of the trade
- Click on the dates at the bottom to expand the chart trades; i.e. if you are using “Candlesticks” and cannot read the signals. Clicking the dates with make the sticks more visible
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I Read Your Ebook, and it Gave Me A Headache! - By Dr Don Yates Sr PhD
About the Author: Dr Don Yates Sr PhD
RSS for Dr Don's articles - Visit Dr Don's website
Author Internet Users Handbook, 2012, 2nd Edition (Full Version) - A Comprehensive Guide to Avoiding Scams Online While Doing Business.
The handbook is also available Internet Users Handbook, 2012, 2nd (Free Articles and Downloads)
Founder: The Internet Scams Anonymous (ISA) Groups
Forex, Investment Adviser, Business Entrepreneur, Mentor, Coach, Adviser
MBA, PhD Organizational Development and Human Behavior, Dissertation"Top Performers"
Former US Navy (enlisted and officer) 17 years, 2 sons in Desert Storm
Founding President/CEO/Broker La Jolla Newport Financial, Procomp Computer Services, Inc and Investment Quality Real Estate ((IQ), La Jolla California and Incline Village (Lake Tahoe), Nevada 1/1/1981. Bootstrapped $137 into $15 million plus. International Financial Adviser/Consultant for business, commercial and real estate development
Top Civilian for Aircraft Maintenance on the Staff of Commander US Pacific Fleet. Business Entrepreneur, Founder, Chairman, Director, CEO, President of a dozen successful ventures since age 8
Business Adviser, Mentor and Coach for start-up and existing growth companies.
Click here to visit Dr Don's website.
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