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Introduction

You are probably on the way to be a millionaire. Well, if having good knowledges is important for full success, your sucess also depends on your broker. So before Trading in the FOREX (FOREign Exchange) Market, choosing a good broker is a milestone.

A broker is merely an intermediary (a middleman) between YOU as a person and the very FOREX market. The broker (an individual or a corporation) will actually carry out your orders to buy or sell currencies.

Now we are going to browse the following 20 items you need to find the proper broker that you will work with.

1. The Trading Platform

To send a buy/sell order to your broker you use a computer software called a ‘Trading Platform’. Most of them comes with a demo account. Using the demo account to check the software for ergonomics (comfortable in use), fast execution, slippage (difference between the price of a currency at the order and the price of the currency at execution), charts, etc…

2. The Leverage

The Leverage enables you to take a position more important than the capital you invest. The greater is the Leverage and the greater is the risk to lose your money. So, for the purpose of limiting the risk the leverage should be lower than 10.

3. The Spread

The spread represents the difference between the Ask Price and the Bid Price offered by a broker. For example if the broker offers a fork of Bid: 1.3600 and Ask: 1.3608 on the euro/dollar that means you can sell the parity to 1.3600 and buy it to 1.3608. The difference between the two prices is 0.0008. We say that the spread is worth 3 pips.

The Spread is important when applying short term trades with few movements in pips.

4. The financial solidity of the broker

The choice of an important broker is very useful. Indeed, with a big capital such a broker can guarantee your deposit.

5. The Language

The main worldwide brokers giving access to Forex are primarily located in the United States. In fact, to be able to invest in this market, it is necessary to speak English and to know a minimum of the American legislation in order to choose the good broker. However, with the growing of individual investment in the FOREX market many brokers provide services in different languages and we can find serious brokers outside the USA, in France for example.

6. The Country

For the same reasons stated above, you can trade currencies while living almost anywhere in the world !

7. The Customer Support Service

Contact the broker via Telephone, E-mail or Live Chat and check the delay of the replies, the availability of the customers service and the relevance of the given answers (are the answers useful to you ?).

8. The Speed of Order Execution

Use the Demo account and the platform to test the broker execution speed.

9. The Margin

The lower the margin requirement (the higher the leverage), the greater the potential for higher profits and losses. The percentages of margin varies from 0.25 and more.

10. The Minimal Deposit Requirements

Most brokers have minimum balances to start forex trading. The lower is the best. In general they vary from $250 to $1,000.

11. The Transaction Costs

Of course, don’t forget that the cheapest broker is not the best.

12. The Slippage

About the slippage, it is necessary to rely on comments left on forex forums.

13. The Withdrawal

Ask all informations related to withdrawal. In effect, it is often hard to get your money out of your trading account.

14. Is the Read more…

In this guide, you will learn about the benefits of Swiss banking. You will also discover how to open a Swiss bank account, and how to use it for investment and savings purposes.

Introduction

Swiss bank accounts provide strict privacy, total confidentiality and are also tax-free.

With a Swiss bank account you can also earn interest in the currency you wish to hold your account in (USD, CHF and EUR). You can also receive an international credit card and a numbered account if you choose.

Typical Swiss bank account clients

Typical Swiss bank account clients come from all walks of life, from international consultants and sales representatives to expatriates and computer programmers. In fact, anyone seeking to gain financially (possibly through trading in the capital markets, the sale of real estate, inheritance, or an insurance policy), or who wants to protect their estate in the event of divorce or inheritance, can take advantage of the benefits of Swiss banking.

Does it cost anything to open my Swiss bank account?

Opening a Swiss bank account is often free of charge.

Which documents do I need to open a Swiss account?

Opening a Swiss bank account has never been easier.

Before you arrive in Switzerland, you will be asked you to bring with you some of the following documents:

Passport

You might also be asked to send an authenticated copy of your passport?s photo page, showing your passport number, before you arrive.

Financial background

These documents show what you do for a living, for example a copy of a current bank statement, contract of employment or tax return. The exact documents required depend on the nature of your professional life.

Origin of deposits

These documents show the financial origin of your deposit. For example if you are depositing funds from the sale of a house, you might be asked to send proof of the sale, a copy of the real estate agent?s listing, or similar.

Personal Information

You are usually requested to provide only basic personal information.

This information is required in compliance with Swiss anti-money-laundering laws and to understand your banking needs. All your information should be held in strict confidence.

Swiss bank accounts for US residents

If you live in the US you can still Read more…

The objective of every forex trader is to become a profitable trader. But achieving this goal is not always an easy task, so it?s vital that you learn how to use as many of the technical indicators as you can. These indicators are very useful parameters that will tell you with a pretty high probability what the forex markets are more likely to do in their apparently disordered behavior.

MACD and RSI are two of these indicators; but what?s the meaning of these letters? Here is the answer:

Moving Average Convergence Divergence: MACD is a more detailed method of using moving averages to find trading signals. This indicator was developed by Gerald Appel, the MACD plots the difference between a 26-day exponential moving average and a 12-day exponential moving average. A 9-day moving average is generally used as a trigger line, this means that when the MACD crosses below this trigger it is a bearish signal (time to sell) and when it crosses above it, it’s a bullish signal (time to buy).

This indicator will help the trader using MACD studies to have an early signal of what the market will do next. When the MACD turns positive and makes higher lows while prices are still tanking, this is usually a strong buy signal. Conversely, when the MACD makes lower highs Read more…

OK, in our last installment I showed you how a sample of a Forex trading system with a high percentage of winning trades could still be a losing system overall.

The whole point of the exercise was to get you to take a closer look at the performance results of trading systems that you are interested in pursuing. Now that you know that it is possible to lose money trading a system with over 90% winners, you?ll be able to look at the next advertisement for a Forex trading system much more objectively.

Let?s take another look at our example:

Trading System A Performance

Number of trades = 1000
% of Winning trades = 92%
% of Losing trades = 8%
Average Winning trade = $180
Average Losing Trade = -$2100

A few quick calculations tells us that this trading system had Total Net Profit of -$2,400

The Total Net Profit is an important factor in any trading system although it doesn?t tell the full story.

Here?s how the Total Net Profit is calculated:

Total Net Profit = Gross Profit ? Gross Loss

In our example above these figures would be:

$165,600 ? $168,000 = -$2,400

As stated above the Total Net Profit for this trading system is negative. This is important to note. As you can see, if the only information you originally had Read more…

As you ponder how to balance your forex portfolio, it is important to map out sure-fire strategies beforehand.

With your plan, you optimize your reward with respect to the expected risk, and tweak probabilities to your favor. Forex strategies must be disciplined and limit risk; simultaneously, it positions you at the most favorable advantage in the market.

A beginner?s strategy is the fundamental Moving Away Average, which is draws predictions from technical study over 12 periods, with each period 15 minutes in length. Trading decisions based on the MAA technique considers historical data to arrive at relatively safe predictions.

We use a simple algorithm for MAA. When currency price crosses above the twelfth period, simply move away it is a signal to stop and reverse. In this way a long position will be liquidated and a short position will be established, both using market orders. This system keeps trades constantly active in the market, with either a short position or a long position after the first signal. Risk is minimized.

Intermediate level strategy calls for analysis of support and resistance levels. The market likes to trade above support levels and trade below resistance levels. If either a support or a resistance level is broken, then the market follows through in the direction given. These breakpoints can be determined by analysis of the chart and assessment of where the chart has encountered unbroken support or resistance in times past. Identify these critical points and you can ascertain periods when you plan to open or close a position.

An advanced tactic that many consider exotic is the balloon strategy. The Balloon is an option that balloons, or increases in size when triggers are breached. Take the case of an investor who predicts that the dollar will gain strength against the Euro in the near future and is currently trading at one hundred, the investor will see one hundred ten as having strong resistance, but he also believes it will be broken.

Now, rather than buying straight US dollars at one hundred for the next six months the investor will purchase at ?at the money? balloon call with a One Hundred Ten trigger and multiple of two. The investor then acquires a One Hundred Ten call in USD110mm. However if the dollar and Euro ever trade at or above one hundred ten, the 110 call will double to USD 20mm.

A day trader at heart? The Double Bottom is definitely for you. Significant to the short term trader, the double bottoms indicate a possible major change in currency sentiment and indicates a shifting trend. The pattern is used on all times frames, and many compelling intraday and long term bull markets are identified Read more…

Over trading is one of the biggest causes why traders never make it in the financial markets. With a click of a button, a trader can place a trade anytime he wants. It takes tremendous discipline to hold yourself back from over trading. There are many reasons why one may choose to over trade.

1. Traders without a plan

Traders without a plan are my favorite type of traders because they will always lose. Without a plan, how would one know when to take a trade and when not to? Having a trading plan is a necessity. I can not trade if I do not have a plan for the day. I feel lost without one.

2. Revenge trading

Many new traders become tilted after a loss or a string of losses. This causes them to revenge trade just to break even. This often leads to reckless trading forcing a trade when opportunity is low.

3. Chasing the markets

Alot of new traders feel more pain when they have missed a move than an actual loss. This is why new traders love to chase the markets. If price has moved away from your projected entry point, let it go. There are plenty of more opportunities. Chasing is one of the worst habits a trader can have. Not only does it offer you low rewards, it also gives you a horrible entry and alters your stop loss placement. Always think about the risk before the profits.

When you have a plan to follow, it is easy to filter out Read more…

When you reach a certain level of understanding about how the FOREX market works, you become conscious of the huge significance support and resistance levels have.

Although the internet is populated with a large collection of strategies and rules on this subject, I always found it difficult to understand what lies beneath and how to reliably pinpoint the exact inflexion level on a chart.

This article addresses the subject in my unique and well-known style. I will share with you my findings as well as the optimum approach to them, trying to extract the essential and propose a simple, yet effective way to show a constant profit.

The S/R levels are the product of the battle between the sellers and buyers, on their perpetual attempt to turn a profit from their market expectations.

This is always dictated by the big players and smaller hands only come to add momentum to any change in direction.

This observation becomes more significant for larger time frames on the chart, given the colossal size of this market (more than 1.5 trillion USD a day).

That is why all technical analysts advise you to wait for the change in direction to occur, and avoid initiating positions in the anticipation of a support or resistance level. This is precisely because no one knows if the big guys are still willing to defend that level.

Of course, they will pack their analysis in vibrant colours and fashionable expressions, but the naked truth is the above-mentioned one.

The advent of so-called ?digital options? brought major players at the table. These are the ?casino-style? bets, using terms like ?one touch? barrier, ?double no touch? barrier and similar others. Simply put, you bet that if the rate behaves in a certain fashion, over a specified time frame, you will be paid a certain amount of money, in line with ?odds? similar with horse race betting. For instance, you can bet that EUR/USD, currently trading at 1.2300, will not go above 1.2400 for the next seven trading days. If this scenario plays out well for you, the broker pays you in line with the odds of the bet.

This ?digital options?, together with their ?classic options? relatives, are a major supplier of S/R levels in the FOREX market, as players select very specific levels for their bets.

As it is the case with all humans, we tend to simplify things, this approach resulting in ?round Read more…

This time we?ll talk about European Union (EU) that involves a market with a single currency, a single Central Bank and a single monetary policy. There?ll be discussed European single currency, Monetary, and Fiscal policies, and effect of EU innovations on European countries from the economic perspective. The current situation in Europe and that affecting the members of the EU is one of unbalance. The Maastricht Treaty envisaged the creation of a European Central Bank, ECB. It also laid down set criteria for countries to fulfil before they could join the single currency. There were four key points that the main players of the treaty stressed were the vital characteristics that potential candidates must to be considered for entry.

Price stability in effect this means controlled inflation. The perspective country must for at least one year have had an inflation rate no more than 1.5% above the average of a most the three best performers already existing within the Union. This is because a union such as the EU would require its members to be of similar economic importance. If a candidates inflation rate exceeded the 1.5% precedent set it would harm the way that the EU functions by putting pressure on the top performers to lower their rates to create an equal set rate. Fiscal Convergence, or more simply a budget deficit. The treaty requires that the deficit should not be more than 3% of the GDP [Gross Domestic Product]. The accumulative debts should not exceed more than 60% of the GDP. Another demand is that there is stability within the currency for two years in the normal ERM bands without having devalued. This is as well as the specification that there are requests that the Interest Rate for a year long term shall not have exceeded by more than 2% of the average of at most the best inflation performer that already exists in the EU. The second phase is to start the Monetary union. On the 1st of January 199, states will start to use the Euro as an acceptable currency in the eleven states. National currencies will continue to circulate for a number of years. The ECB will take control over the monetary policy. National currencies will have parity against the Euro and not for instance against the French Franc or the German Deutschmarks.

The National Central Banks can no longer conduct their own Monetary policy. They will merely act as agents of the ECB. The exchange rate risk will be eliminated and there will be a single monetary policy throughout the European Union. The third stage will see the emergence of Euro bank notes and coins. These will circulate along with national currencies. In January 2002, the Euro notes and coins will b withdrawn from circulation as the Euro notes and coins start to circulate more widely. There will be co-ordinated switch to the Euro for transaction with the public. It is expected that the final changeover will be completed by 1st July 2002 when all national notes and coins will be withdrawn. There are several key points that the introduction of the Euro will bring. These factors will eliminate additional costs associated with national currencies, enhance price stability and transparency. It will also simplify travel across Europe, with prices stability and transparency. It will also simplify travel across Europe, with prices becoming fixed and travel more frequent. Another advantage would be the revenue saved in the transferring of one currency to the other, such a saving Read more…

There are many technical terms associated with foreign exchange trading. These terms are very important to the Forex trading and the information is also crucial for every trader. Two such import terms are quotation and spread. Quotation deals with the ask price of any cash commodity at a certain period of time. The word quote is sued in almost all kinds of businesses and stands for an approximate market price. The quotation is always used only for information purposes. Most foreign currencies are given a quotation in pairs. The Forex trading works only with currency pairs like the USD/EUR. Now the USD is the base pair while the EUR is the quote currency. The world?s financial wholesale markets quote a currency using 5 different yet important numbers. The last number is known as the pip.

Forex quotes come with two kinds of prices the bid price and the ask price. The quotations for both the prices are sent in real time and as a result the Forex market is able to ensure that all traders will receive a fair price while doing a transaction. Like all trading markets, the Forex market also has an immediate cost attached to establishing a position. Let?s take an example. If the USD/AUS bid is at 131.40 and the ask price is at 131.45 then there is a five-pip spread. This spread will define the traders? cost. To a layman, a Forex quote might sound Spanish but in reality it is very simple. There are two very important things to remember and they are: The base currency, which is the first currency and the value is always 1. The most important currency or the heart of the Forex market is the US Dollar. In a quotation-involving USD as one of the currency, it will always be referred to as the base currency. If there is a quote for a currency Read more…

Some of the greatest philosophers, priests, scientists and sportsman have said that winning is not an art, it all in the mind! So if you are planning to invest in Forex trading then you need to be mentally prepared. It is one of the best mind games that you will ever get to play. The first thing to do is change your mindset. Instead of thinking like any other normal person, you need to start thinking like a speculator, like a Forex trader. There many examples of Forex traders with experience and capability waste their career in the most unimaginable manner. This happens when they waste most of their time trying to perfect their knowledge of analyzing and reading Forex trading charts etc. As a result 95% of the traders have lost in the long run.

Anyone with an average intelligence can understand how the Forex trading market works although it might take a few years of following the market. But that?s about it! It doesn?t take a great IQ or knowledge to beat the odds and earn a profit in a Forex trading. The most important thing is the decision that you make. The decision making process maybe long and there might be some planning behind it but sometimes traders seem to take too long to take a decision and often that ends up being a wrong decision. This is one of the most important things behind success or failure. Some traders make quick decisions but are not able to stick by them or do a follow up and as a result they end up being on the losing side.

The reason why people avoid making a decision is because it?s painful and traders often have a ready assumption that their decision might not be the right one. So basically, the Forex trading market is playing with their mind. Read more…