The Forex Advantage:

The advantages of trading Forex or Foreign Currency can strengthen your Countries currency by being bullish on your currency. This can be done by remaining positive with overall buying strategies on your Currency. This will also add value and overall strengthen a Stock Traders portfolio. Forex alone is a fun and exciting Trillion Dollar Market where people from all over the world compete and make trades. Thanks to the power of the internet, more people are trading online with simple platforms that can be downloaded to their computer. Many people online consider Forex an ideal investment tool or home business which can be full or part-time. Plus the Forex Market can be traded 24 hours a day 5 days a week.

The Forex Challenge

With the help of my Economics & Finance degree from Fairleigh Dickinson University, it is my belief that you should buy your Countries currency and overall remain bullish or positive on your Countries Currency. This will not only strengthen your Countries currency, it will also boost the economics and prosperity of your Country. When you have pride in your Country, you should really avoid selling against it in the long run on the Foreign Exchange Market to make money because this would overall have a negative impact on your Countries stability. This can even effect your company and/or investments. Of course, this is different than your Countries Stock Market because predicting and/or investing whether Stocks go up or down are essential for healthy competition. Companies stay in business by the will of the people on what companies they support.

If you would like to consider the Forex Market as a fun monopoly game with real money for your Country and its future, I would suggest taking matters in your own hand and help strengthen your Countries currency. You can then compete with the World market for leadership on being the number 1 World currency. This will also add value to your portfolio and make your trading fun and interesting.

Since I am from the United States of America and a U.S. citizen, I enjoy going all in on the U.S. dollar and not let my decision ever waiver to sell out. This strategy is also for the greater good for your Country, which will also strengthen your overall profits in the long run. Let's get trading! The game and our future has begun!

Best Regards:

Joseph A. Brancatelli Jr.

Foreign Exchange Markets: What You Need To Know

The foreign exchange markets are situated all around the world. Currency trading is a global activity. Every country in the world uses money and needs to change that money into other currencies in order to trade or interact with other nations.

Currency exchange happens at every level of society. As an individual, you may have changed money when traveling on business or on vacation. Or maybe you have sold something on eBay to somebody in another country. Their payment comes in to your account in their own currency, and the bank or other payment processor such as PayPal changes it for you. That is currency exchange at the root level.

Foreign exchange or forex trading has a different purpose, however. When you are trading on the foreign exchange markets you are not buying another currency because you need it. You are buying it in the hope that it will rise in value, so you can change it back and end up with more money than you started out with.

There is plenty of information about currency trading that can help you become a smart trader or you can rely on professionals advice in what is called trading signals, where they tell you when to place a trade and when to exit.

Forex trading began in the 1970s when the major currencies were deregulated so that their values were no longer fixed. The banks and large investors quickly saw the potential for making money from the changing prices.

The main forex marketplaces are the big financial centers of the world. London sees the highest activity with New York second and Tokyo third. Other major players are Sydney, Zurich and Frankfurt.

Originally you had to be in one of those places to trade money, or at least have a telephone connection with a broker who was there. It was very difficult for somebody who was not on the spot to act fast enough to react to the sudden fluctuations in price that can happen in the forex markets.

But modern advances in technology have changed all of that. Since the rise of the internet it has been possible to trade on your own account from anywhere. This means that it has become easier and easier for the little guy to get a piece of the action.

While some people never think about foreign currency from one overseas trip to the next, others are studying charts and financial information or even using automated software in the form of forex robots to make money from the rising and falling prices with the aim of becoming financially free by trading on the foreign exchange markets.

The White House Update:

Basics of Forex Trading:

Foreign Currency or Forex trading takes place through major banks, market makers, and brokerage houses around the world, who together create a marketplace for trading currencies on a 24/7 basis five days a week.

The Forex market is almost always "open"; it is the largest financial network in the world with a daily average turnover totaling $4 trillion dollars.

It is also a growing market, as more traders turn to foreign currency trading with the help of the internet and many online trading options.

To put foreign currency in simple terms, trading forex involves two currencies traded simultaneously, called a 'pair'. For example, the EUR/USD pair, trade the Euro against the US Dollar. In this example, a buyer of this pair would be 'buying' the Euro and 'selling' the US Dollar.

Forex pairs are described in the following format: XXX/YYY

XXX, the first currency in the pair, is called the 'base' currency. YYY, the second currency in the pair, is called the 'counter' currency in the pair. Prices are always expressed in terms of the counter currency.

For example if the current price of the EUR/USD pair is shown as 1.3667, this would mean that 1 Euro (the base currency) equals $ 1.3667 US Dollars.

Most major pairs are priced to 4 decimals, or 1/100th of one percent. The exception to this is the Japanese Yen pair, which trades only to 2 decimals. This is because there are typically over 100 Yen to the dollar.

In an instance where the US Dollar is the base currency, the USD/JPY pair for example, prices here are expressed in Japanese Yen. If the current price is 108.02, this means that the base currency, the US Dollar, equals 108.02 Japanese Yen.

Forex prices are expressed in pips. What is a pip? A pip is simply the minimum increment that a currency pair price can change. For example, if the EUR/USD price changes from 1.3790 to 1.3791, the prices are said to have gone up by 1 pip.

Forex pair quotes are on a bid-ask basis. The bid is the price that the market is willing to pay a seller at a point in time for a specific currency pair. The ask is the price that the market is willing to sell to a buyer at a point in time for a specific currency pair. The difference between the bid and the ask is called the bid/ask spread.

Forex prices are always listed as Bid price first, and Ask price second.

For example, a typical EUR/USD quote could be 1.3784 Bid // 1.3787 Ask in which case the quote price is said to have a spread of 3 pips.

The spread is how market makers are compensated, as opposed to 'commissions' paid for trading stocks or options. The spread can and will vary depending upon a number of factors, including but not limited to: current market conditions, the specific broker or market maker you use (some do charge higher spreads than others), the currency pair being traded (more thinly traded currencies often have higher spreads).

For the EUR/USD example above, the quote would be expressed simply as 1.3784/1.3787 or 1.3784/87.

Much like buying shares of stock, Forex trades in 'Lots'. There different types of lots, including: standard, mini and micro.

Standard lots trade 100,000 units of a currency pair. Mini lots trade 10,000 units and micro lots trade 1,000 units.

For a standard lot purchase for example is if the EUR/USD quote was 1.3784/1.3787, then buying this pair would mean buying 100,000 Euro dollars and selling short 137,870 US Dollars.

How to trade Forex:

This is a typical trade scenario to help you learn to trade Forex:

Let us assume the current bid/ask quote for the EUR/USD is 1.3802/05 and you want to take a long (or Buy) position because you believe the Euro will gain on the Dollar.

We will also assume that you are only buying 1 Standard Lot.

When you buy this pair, you are actually buying 100,000 Euros for $138,050 US Dollars. Using leverage, at 100:1, you would then need to have an initial margin deposit of $1,381 for this trade to take place.

Let us then assume that the Euro indeed gains on the Dollar and trades now at 1.3865/68 and you decide to sell and take your profits. You would sell you 1 Standard Lot at a profit of 60 pips (1.3865-1.3805).

When you sell this pair, you are selling 100,000 Euros for $138,650 US Dollars. Since you bought the 100,000 Euros for $138,050 and sold them for $138,650, you made a cash profit of $600.

If on the other hand the Euro went down to 1.3775/78 and you sold at 1.3775, you would have a loss of 30 pips, or $300. ($138,050-$137,750).

When using margin and leverage, it is imperative that you maintain sound risk management rules to ensure that your account equity never falls below margin requirements -- if it does, your position will be automatically liquidated and you will sustain a significant loss.

Forex Trading: Fundamental versus Technical Analysis

Forex traders have today a wealth of information from which to evaluate and select potential trades (some would argue too much information). These markets are moved by two primary forces: Fundamental forces (balance of trade data, money supply, interest rates, economic and financial reports, etc.) and Technical forces.

While many traders advocate fundamental analysis-based trading, it should be argued that this style of trading is very difficult especially for people who have little time to trade (less than an hour a day), or who are new to trading Forex.

Fundamental analysis traders tend to be 'always on' -- or, day trading because it requires PRECISE timing to move with the markets. If you can't get to your trading platform the minute a 'surprise' report hits the news wire, you'll be too far behind the action to respond to it.

That is because the markets are always taking in new financial and economic information from around the globe and they are continuously reacting to it to the minute.

Trading on Fundamental Analysis means understanding that the underlying data is NOT important -- what is important is the market's reaction to that data. Remember that most fundamental data is 'projected' - the actual release of fundamental news only acts to confirm or change those projections. Thus the 'timing' of fundamental analysis if of greater importance and leads to shorter term profits or loss due to the swing in market reaction.

Trading on Technical Analysis, however, gives you maneuverability in the markets. Technical Analysis is designed to reflect fundamental analysis in the current market price -- in other words, the market is doing the fundamental work for you. What you are doing is riding a trend based on the trend meeting certain criteria (known as conditions).

Technical Analysis will allow you to identify, confirm and enter a trend with enough time in the trend to generate profit potential. Technical Analysis will also identify, confirm and help you exit a trend that has run its course. In both cases, the action of the price in the Forex markets will dictate what moves you will make.

Thus, using a good trading method based on technical analysis is a less demanding way to trade Forex with far greater odds of success.

Using Technical Indicators to trade Forex

Did you know there are currently more than 100 technical indicators that you can use when trading Forex? Most charting software programs and packages available will provide all of these indicators to you -- but the most confusing question is always: which ones should I use?

There is no magic in technical indicators in and of themselves as they each can tell you something about the market's behavior at any given point in time. It is also not true that any one indicator is better than another.

What is key to using technical indicators successfully is to select only a few that complement one another and use them in an uncommon manner along with powerful trading tactics.

Most trading methods share the technical indicators they utilize for identifying potential trades -- the key to being successful with these indicators is to understand their application and their impact on the selection of trade.

The tendency for many amateur traders, however, is to over-complicate this process. They want to use too many indicators or patters, and they think that success is dependent upon something being highly complex. Nothing could be further from the truth -- in fact, simple is better:

1. Using too many indicators is counter- productive, as the information that this strategy provides is complex and just plain misleading.

2. Using a few simple indicators in a uniquely powerful way can provide the right information necessary to make good trading decisions.

3. With the right indicators and patterns, you will be far more likely to trade with discipline because you will be able to understand an objective set of rules that the right indicators and patterns can provide.

In short, you are best of keeping it simple and applying a smaller set of indicators to identify the best possible trades -- and avoid making 'complexity' a qualifier for determining whether a method will work or not. You'll likely find that the simpler the method, the more successful you will be with it.