Forex Short Selling

Traditionally the premise of investing is that you buy an asset and hold it until it rises
enough to make a sizable profit, and it doesn't get much easier than that.
What about the times you come across a stock that you wouldn't invest a cent in, you know that thing is doomed, a sure loser?
If you knew that the stock was going to decline wouldn't be nice to be able to profit from its decline.

Well you can profit from the decline of a stock and although it sounds easy, there are substantial risks and pitfalls that you need to watch out for. The mechanics of a short sale are somewhat complicated and the investor's risks are high so it is important that you understand the transaction before getting into it.

What applies to shares also applies to forex currency pairs.

To sell your stock or forex short, you must adhere to the up-tick rule.
The transaction before your short sale must have been executed at a higher price than the transaction before it.

In other words, the transaction before your short sale must be an up-tick.
In practice, you cannot short a stock or currency that is already falling in price. Otherwise, short selling would amplify the decline.

Remember. Currency trading is a SKILL that takes TIME to learn. Skilled Forex Traders can and do make money in this field, however like any other occupation or career, success doesn’t just happen overnight.

Forex trading

Forex Trends

There are literally hundeds of ways you can use to identify a trend.
Not only is the variety of indicators huge, but what trend are we talking about?
Is it the daily, weekly or monthly trend?

The best indicator for trends I have found is the EMA (exponential moving average).

There is no difference of note between EMA's, simple moving averages or any other moving average indicator.

I like longer time period moving averages for a simple reason, they are less inclined to whipsaw. Compare the difference between a 5,10 or 20 period EMA and a longer term.

You'll see I am right.

My short term EMA is 89 time periods. Longer is 144.
The reason why i use these numbers is they are fibonacci numbers.

When the 89's cross over both 144's the trend is up and vice versa.

Have fun.

Forex trading Exposed - A Review

Forex

I usually don't like to talk about Internet ebooks about forex, most of them are just scams. If you are looking for one of the best ( and cheap ) books about forex you got to have Forex trading explained. Even if you are already an active trader. This book is one that I intend to keep in my personal library.

To make money in the forex markets you need to know and understand many things, but most of all you need to understand perspective. You need to understand how the big boys, the people who move this market, think and operate, and then do what they do. This book teaches you how.

It opened my eyes to the importance of price action in forex trading over a much broader timeframe than I had been viewing before. Suddenly I saw price in a context of time and a price range that gave me my first 'aha'.

That was not all, price action immediately made more "sense" now that there was a "framework" built around it. I felt more in tune with the market because I could see the market in a context that I chose. Then came my next 'aha'.

I realized that price was contained in the framework in such a way that I could look back and learn, and then look ahead with much more confidence in making my trades. I have become more confident in taking positions because I am focusing on the trend rather than an intra-day move.

It shows you, step by step how to make money, and what to avoid. Do you understand the difference between ‘market wizards’ and ‘marketing wizards’ – the people that make the money and the people that take the money? If not, you are probably in trouble. This book will tell you why you need to know the difference, and how to benefit from this knowledge.

I see my trades in a new, calming, light. When trades go my way, I can better see where they are headed and I know how to improve my position and then when and how to best take profits. When trades go against me I can see them in context of the larger picture which helps me decide what to do. I have also learned that a loss is only counted when I make it a loss. Patience and trust have turned negative pips into profits. With online forex trading, I feel in control, and that's the best part.

Forex

Forex Trading

Forex

Our purpose here is to introduce the forex market. In forex there are many derivatives of the central market such as futures, options and forwards. We will only be discussing the main market, sometimes called the Spot or Cash market.

The word FOREX is derived from Foreign Exchange and is the largest financial market in the world. Unlike many markets the Forex trading market is open 24 hours per day and has an estimated $1.2 Trillion in turnover every day. This tremendous turnover is more than the combined turnover of all the worlds' stock markets on any given day. This tends to lead to a very liquid market and thus a desirable market to trade.

Unlike many other securities (any financial instrument that can be traded) the FX market does not have a fixed exchange. It is primarily traded through banks, brokers, dealers, financial institutions and private individuals. Trades are executed through phone and Internet trading platforms. It is only in the last few years that the smaller investor has been able to gain access to this market via online forex trading. Previously the large amounts of deposits required precluded the smaller investors. With the advent of the Internet and growing competition Forex is now easily within reach of most investors.

You will often hear the term INTERBANK discussed in FX terminology. This was simply banks and large institutions exchanging information about the current rate at which their clients or themselves were prepared to buy or sell a currency. INTER meaning between and Bank meaning deposit taking institutions normally made up of banks, large institution, brokers or even the government. The market has moved on to such a degree now that the term interbank now means anybody who is prepared to buy or sell a currency. It could be two individuals or your local travel agent offering to exchange Euros for US Dollars. You will however find that most of the brokers and banks use centralized feeds to insure reliability of quote. The quotes for Bid (buy) and Offer (sell) will all be from reliable sources. These quotes are normally made up of the top 300 or so large institutions. This insures that if they place an order for you that the institution the order is placed with can fulfill the order.

It is estimated that anywhere from 70%-90% of the Forex trading market is speculative. In other words the person or institution that bought or sold the currency has no intention of actually taking delivery of the currency. Instead they are solely speculating on the movement of that particular currency.
Over 90% of all currencies are traded against the US Dollar. The four next most traded currencies are the Euro (EUR), Japanese Yen (JPY), Pound Sterling (GBP) and Swiss Franc(CHF). As currencies are traded in pairs and exchanged one for the other when traded, the rate at which they are exchanged is called the exchange rate. These four currencies traded against the US Dollar make up the majority of the market and are called major currencies or the majors.

Forex

Forex

Forex

Welcome to my forex blog. Here you will learn about forex and how you can make good returns using forex.