Four Common Misconceptions About Trading Forex

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A lot of people who are thinking about investing in Forex are put off by some of the stuff they read on the internet about the Forex Market. A great many of these things that they read are not true, incomplete or inaccurate. Forex Investment is neither as risky, nor as rewarding as these exaggerated articles tent to portray it. Sure, you can make a great deal of money and you can lose a great deal of money, but it is possible to go into Forex Trading armed with a sensible approach and the knowledge that you have researched Forex Trading thoroughly. A good place to start is by avoiding these four misconceptions.

(1) You Will Make Your Fortune Trading in the Forex Market
One of the reasons that Forex gets a bad rap from time to time is that people believe the hype that they will be able to simply get their money, invest it in a load of currency pairs and then they will be able to kick back and watch all of their new riches start pouring in. This might happen to a few very, very lucky individuals, but it probably wont happen to you. The fact is that there is only a small percentage of investors who make their money through investment in Forex Trading. So getting rich quick is not a good aim when you start out. Rather, you should look at Forex trading as a way of building a retirement pot or nest egg.

(2) If You Have A Great Deal of Knowledge at Your Disposal You Cannot Fail.
Knowing what you are doing is essential and researching your markets is also crucial. Studying patterns of old trading and reading up on all the Forex sites and forums is also useful. But remember this. Just because you have read everything and studied everything and done all the Forex workshops does not mean you can feel confident of not making losses. Being aware of the possible pitfalls does not mean you will always avoid them.

(3) You Should Always Listen to the Experts of Forex Trading
There are a lot of people out there who claim to be experts in Forex Trading. Whilst some of them will inevitably be telling the truth, they won’t all be experts. Learn to be discerning about who you listen to and always bear in mind that no matter how knowledgeable they are, they could still be completely wrong. Learn to trust your instincts on these things.

(4) You Should See Forex Trading as a Hobby
No. Take your investments seriously and view your trading as a part time job, not a hobby. It might not be able to make you rich, but Forex trading can make you better off and alternatively, can make you poor very quickly too. Take it seriously.

Alex is a freelance journalist and financial blogger. He loves to write about football and jazz but spends most of his days writing about mortgages, stocks and shares and payday loans.

How to Avoid Forex Investment Fund Scams On the World Wide Web

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Not being one to let the world of high finance pass you by, you decided to look for opportunities in the forex market. Like many others who thought that they had what it takes to master currency exchange, you found the foreign exchange to be less than inviting. Fortunately, there is more than one way to peel a potato. Trading in currencies is one way but if you are not the kind of person who likes to get his or her hands dirty, a forex investment fund may be for you. The down side is that there are just as many scams and rip-off websites for forex investment funds as there are legitimate ones.

  • Fraudulent forex websites often look real and make sense using the perfect forex terminology
  • Scam artists in forex know exactly what to say to draw in potential victims
  • The FBI is swamped with Financial Institution Fraud cases involving bogus investment firms offering membership to bogus forex investment funds

Fraud Is Everywhere

Fraudulent forex websites come and go every day on the Internet. For every fake forex website that disappears, two take its place. The worst of these are the ones that do not go away. These are the semi-real financial institutions that take advantage of clever language and contract loopholes to dupe investors. Even when the investors catch on to their unscrupulous methods, the website carries on, raking in more victims and dealing with unhappy investors with unscrupulous lawyers. Eventually, they also disappear and make out with a lot of unearned money.

How Investment Funds Work

Forex investment funds give you more power and potential to earn by allowing you to invest with other forex traders in a mutual account. The fund will appoint one person to make higher yield, higher risk trades with a larger amount of collective funds. The returns for such trades are much higher than if you were investing alone. The appointed fund manager must operate within the group’s pre-appointed parameters. The trick to avoiding scams lies in how much research you are willing to do into any given website that offers the opportunity to join a forex investment fund.

Research Is Always The key

When researching forex investment fund websites, it is wise to keep in mind that there are never any guarantees in forex investments. Any website that makes unbelievable claims of success is suspect and bears much scrutiny. Another method of ferreting out fraudulent websites is finding forex investment fund reviews and websites put in place by victims of such websites. Very often, someone who has fallen prey to a fraudulent forex website will feel obligated to warn people who may be looking at that website. You have to dig very deeply, however, as these victim may know little about search engine optimization techniques.

Guest post by Debbie who loves to write about business and finance topics such as foreign exchange and currency markets.

Scalping Fundamentally in the Forex Market

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Technical analysis is crucial to Forex trading – in particular for isolating entries and exits – but still it alone is not enough for devising an all-inclusive trading strategy. Market sentiment in Forex is driven mainly by the geopolitical and economic news. The chief market makers in Forex – hedge funds, multinational corporations, central banks, and the main investment banks – are not concerned with the flag formation in the USD/EUR on the daily charts. As an alternative, they devise their trading strategies by studying the geopolitical developments and economic news in addition to the latest statements of G-8 financial authorities. As a result, the appropriate approach to Forex trading may be summed up as follows: start fundamentally, enter and exit on the technical premises.

According to the common knowledge in the Forex market, Forex traders who have the desire to trade on fundamental basis should focus on long time frames with daily or weekly charts. While Forex traders who want to trade shorter time frames, like hourly charts, have to concentrate on technical indicators. However, this piece of advice can’t be more wrong in Forex. Yet, is it not only feasible to scalp Forex fundamentally, but individual Forex traders actually have an important plus over larger market players when it comes to carrying out their trades.

One of the main positive features of the Forex market is that it trades off of macroeconomic news that is obvious, impossible to fabricate and easily accessible by all market traders simultaneously. The key news that moves the Forex market is governmental economic data such as GDP growth rates, inflation readings, the latest employment statistics and trade balance reports.

On the other hand, playing the expectations game alone is not enough to create money-making trades. This is where technical analysis becomes essential to a winning fundamental strategy. The best, most gainful fundamental scalps take place under technically acute conditions. These highest-possibility strategies are devised when a favorable fundamental prerequisite occurs under technically overbought conditions and vice versa. The same dynamic happens backwards: if currency prices are enormously oversold and fundamental news shocks to the negative aspect, the majority of Forex market makers will hurry for the exits, making a rally of sell orders, which produces a powerful momentum-driven move that can be traded profitably.

Forex trading is a many-sided matter that demands both fundamental awareness and technical know-how. Not only is scalping on economic news feasible, it can be highly profitable – as long as the Forex trader focuses to technicals as well as fundamentals.

Written by A. Collins who is a chief developer of simply Forex strategy ProFx and other forex automated trading software which are available on ForexEAsystems.

Follow these Steps to become Successful as a Beginner Forex Trader

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Nowadays, an increasing number of people are showing interest in foreign exchange trading. With their skills, practice and expertise, Forex traders are able to earn decent money, battle financial crisis and eliminate debt. In other words, Forex trading offers you the chance to secure a better future. However, you should not expect outright success in this profession. You need to accept that there are risks too. Only the level-headed persons emerge out successful in this profession. The beginners, who want to join this business, however have to be extra cautious. Here are some Forex strategies for the beginners which will help many of you with no real experience of trading to develop the skills required in this business.

Keep away from predictions
As a beginner, you should keep away from the predictions made to forex pricing. The truth is that forex market is unpredictable. As a beginner investor, if you adopt this method, chances are more that you may incur losses. Another strategy would be to stay away from anything that you do not understand completely. The behavior of the market is very much unpredictable and it is not so easy to understand the market. Moreover, you should not go by market grapevine. So, as a beginner forex trader you should be simple, cool and level-headed.

Adopt smart money management
Smart money management separates the traders that make money from those who loose out in the race. It would be completely foolish, if you bet your life time income for a big win. Again, putting a lot of money in a single trade would not unwise. Even the professional and the veteran traders do not do this.

This is a process of reducing risk by holding definite forex. So as to neutralize the decreasing market prices, forex trader sells it within a particular time. You can take put options in case of a decline in the currency prices. With the proper usage of the hedging system, the traders are assured profit, irrespective of the direction of the market.

Adopt a disciplined approach
What is most important to gain profit in forex trading is to adopt a very disciplined approach. If you make some bad moves and lose money, then you make larger trades so as to compensate for that loss. However, you end up in loss again. It is advised that you avoid this kind of move. Before putting your money, make sure that you are investing in a forex with forex trade signals that you can trust.

Forex trading is an excellent way to earn some money. However, you have to be very much disciplined and cool-headed to become successful as a forex trader.

One of the Most Famous Forex Trades That Brought Millions

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All that Forex traders long for is making profits and not bearing losses. And definitely all forex traders are dreaming about one huge lucky bet that would bring them millions in a minute, after which it will be possible to retire on an island and to capitalize on it for the rest of their lives, enjoying the riches and doing nothing. But unfortunately the reality is very much different from the dreams, since forex trading is not the matter of luck, but rather a matter of good knowledge of the forex market and the refined skills. And successful forex trading is a matter of constant honing of those skills and keeping a watchful eye on the forex market situation.

However, the answer to the question of whether it is possible to make millions in as single trade is positive. There were some traders in the history of forex who gained a hundreds-millions profit making one bet. Though, it is very important to mention that it wasn’t some kind of impulse or destiny sign that prompted them to make that bet – what preceded it was very hard work and continuous monitoring of the forex market.

One of the stories about million-making bet that keeps nourishing the forex traders’ imagination is related to Stanley Druckenmiller and his bet on the German mark. Stanley Druckenmiller worked as a forex trader in George Soros’ Quantum Fund. When the Berlin Wall fell, Druckenmiller calculated that a German mark will drop to a certain extreme level. Thus, he put a multimillion-dollar bet relying on the idea that the mark will inevitably rally very high from that lowest peak in future. Later on he increased his bet deciding to purchase 2 billion marks. Actually, he wasn’t mistaken and his calculations turned out to be very precise. Thus, Druckenmiller’s profit appeared to be worth of millions of dollars which he earned for the Quantum Fund.

These were Druckenmiller’s financial feeling of the forex market, good knowledge of the macroeconomic factors and infallible calculations that accounted for the success in that trade. Thus, this is another proof that forex trading is both science and art and in order to make huge profits constant honing of trading skills and self-improvement is necessary. What is also very important, Druckenmiller’s making such enormous sum of money wouldn’t become possible without risk, which is also inevitable in forex trading.

Written by Collins Alexander who is senior developer of day trading forex strategy from Forexeasystems. On Forexeasystems’ website every forex trader can read free forex articles, for example about best forex trading hours.

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Forex Trading Software Comparison

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Currency trading is big business. According to the triennial survey conducted by the Bank for International Settlements (or BIS), $4.0 trillion dollars are traded on Forex every day!

If you’ve ever considered learning to trade on the Foreign Exchange Market, now is a great time to start. With the introduction of online trading and Forex software programs, it’s never been easier!

But how do you choose a software program?

First, it helps to know your options.

Forex Trading Platforms: Online trading platforms offer the convenience of dealing with a broker to assist in your trade-making.

Forex Charting Software: If you want to do an in-depth analysis of the market trends over time, this software will do the hard work for you.

Automated/Algorithmic Trading Software: Eliminating the need for frequent check-ups on the market, this software follows a pre-determined set of rules to make trades for you.

Forex Signal Generating Software: If full automation of your trading decisions is a stretch, this software leaves the decision-making in your hands, offering you alerts when certain market changes occur.

Next, it helps to know what’;s most commonly used.

Here are five common Forex Trading Software programs:

  1. eToroThis is a beginner friendly program, offering both a web-based and a downloadable platform. Personal trading coaches are also available. The minimum deposit required is $50.
  2. Ava FXThis program allows you to work on multiple platforms, including online and mobile. In getting started, you will receive a free instructional webinar. The minimum deposit is $100.
  3. Easy ForexEasy Forex offers a personal account manager for all users, whether you work within their online platform or a PC download. Minimum deposit is $200.
  4. GFC MarketsAvailable for download and online use, GFC also offers a mobile program and a meta-program (which comes with a variety of tools preferred by advanced traders). Minimum deposit is $100.
  5. ForexYardThis program has various account-types to choose from, including automated trading, and allows use on multiple forums. You minimum deposit is $100.

And finally, you need to decide what’s important to you.

Things to consider when purchasing Forex Trading Software:

  • Refund Policy – How much time do you have to decide if this software is right for you? And if it’s not, will they refund the full amount?
  • Cost – Is there a one-time fee? A monthly fee?
  • Online vs Download – Will you need to have access to your trading information anywhere and everywhere? Or is having the software only on your personal computer your preference?
  • Updates, Upgrades, and Fixes – Will you receive free (and regular) software updates? If errors are found in the software program, will you receive the fix for that in a timely fashion?
  • Security – Is your software known for keeping your personal information secure?
  • Support – Will you have access to software support? When? Is it free?

Now that you’re aware of the platform options, you know the most commonly-used software available, and you’ve considered the features that will meet your needs, you’re ready to choose the best Forex Trading Software for you.

For more help, check out our Forex Comparison tool.

Tyler writes about forex trading online for Forex Trading Finder where you can compare foreign exchange brokers & find the best forex reviews.

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