The Frontiers Of Trading

By:  Ivan Cavric FOREX is the abbreviated termed used to describe the world's largest foreign currency exchange market where of 1.5 Trillion dollars is traded on a daily basis.   This more than 100 times the trading volume that occurs on the NYSE, and is fast becoming the hot spot for individual investors.  A market that was once only accessible to large corporations and government entities is now available to individual investors with online trading accounts.  Despite the hype and excitement around this market, is it right for you? ACCESSIBILITY.   Unlike most investment markets that open and close with the ring of a bell, the FOREX market is open 24 hours a day, six days a week.  Trades can be made anytime the market is open from your home computer through the major trading centers located Sydney, Tokyo, London, Frankfurt and New York.  Because of this you can act instantly upon news that may affect the market.   LIQUIDITY.  Because of the high volumes that are being traded in t

By:  Ivan Cavric It is one of the most talked-about advantages of trading on the Forex—the commission-free trades!  Unfortunately, while we would all like to think that Forex brokers are just out there executing trades for the fun of it, the simple truth is that everyone needs to make money—even the brokers.  While they may not charge a traditional commission, brokers on the Forex still make their money whenever trades take place.  Brokers actually are compensated in a number of ways, including: Buying/Selling Currencies Earned interest on deposited funds Converting and holding currencies Rollover fees It is in the buying and selling of currencies that brokers make the majority of their money.  They make this money in something known as the “spread”, or the difference between the asking and bidding price of the currency pair.  The “ask” is the price a retail Forex trader would pay for a position.  The “bid” price refers to the amount that an investor could then sell the position at. Th

By:  Ivan Cavric The Forex market is known to be a very lucrative market, with trillions of dollars exchanged daily. To get started in the Forex market and make the most of your investments in it, you need to select a suitable broker. Forex brokers do not charge a commission, but generate their income from the difference in the sale and purchase price of currencies at any given point of time. This difference is referred to as the ‘spread’, and is calculated in ‘pips’. To save money, choose a broker who offers lower spreads on your Forex investments. Select an appropriate broker While in the equities market brokers function independently, in the Forex market they are usually registered with banks and other kinds of lending institutions. The reason being, these brokers require large amounts of capital to process Forex transactions. Forex brokers must be registered with the Futures Commission Merchant (FCM), and they come under the purview of the Commodity Futures Trading Commission (CFTC

By: Ivan Cavric If you’re looking at trading in the foreign currency exchange market (commonly known as the forex) and you have the classic Pink Floyd tune “Money” playing in your head, complete with the “cha-ching” sound, you might want to read this article first. With all of the forex brokers out there, ready and willing to take your cash to help you make your first trade, it may be a little intimidating finding a broker that can help your profits grow and not walk away with your cash! To that end, as part of your forex training, here are a few tips that will help you in selecting a broker that you can trust and not end up with a proverbial “bucket shop.” 1.“There is no risk!” Watch out for a company that claims that there is little or no risk in trading the commodities market. Any broker that is legitimate should tell you that there is ALWAYS risk! True, you can mitigate that risk with stop losses, sound trading techniques, and equity management, but there is always a risk involve

By:  Ivan Cavric Fibonacci, Actually named Leonardo of Pisa , was born in Pisa, Italy about 1175 A.D.. Today, he is recognized as the greatest European mathematician of the middle ages. Fibonacci is credited with introducing the Arabic-Hindu numeral system to Europe. He also introduced the decimal system. Both became the basis of mathematics we use today. Enough background for now. Although Fibonacci covered an entire realm of mathematics, the main numbers used in trading are actually percentages. The percentages are 38.2%, 50%, and 61.8%. These areas are viewed as trend retracement points. The most commonly held theory is that a 38.2% retracement of a trend is a failed reversal and the overall trend should continue. A retracement to the 61.8% mark signals that the retracement is the beginning of a new trend. The 50% level is used for different strategies if confirmed by several other signals The use of Fibonacci numbers in trading has become increasingly popular in recent years. It d

By: Ivan Cavric In the world’s largest financial market where exchanges reach up to trillions of dollars each day, many people would really want to participate in this market. Aside from being the largest financial market in the world, Forex is also the most liquid market in the world where trades are done 24 hours a day. A lot of traders have become very rich trading in the Forex market. And, many people who trade in the Forex market everyday have found a great way to replace their day jobs. Some even became millionaires almost overnight by just trading in this financial market. Trading in the Forex market can be very attractive. However, you should also know that there have been people who suffered extreme financial losses in the Forex market. It is true that the Forex market offers a very good money-making opportunity to a lot of people, but it also has its risks. It is a fact that people who didn’t have the right knowledge and skills trading in the Forex market suffered huge finan

By:  Ivan Cavric This is a fascination. Here is a wide open field that almost anyone can take advantage of. It use to be only for the mega rich people, the big corporations and banks. They are trading foreign currency's.  Can you imagine this is a 1.2 trillion dollar a day being traded. Thats 1.2 TRILLION a day. Now with the Internet you you too can trade the foreign currency's. You can set up a account with as little as $300.00 up to whatever. Regular accounts usually start with $3000.00. You are able to leverage you funds 100 to 1. SO you will be controlling 10,000.00 or one lot in currency's for $1,000.00 and for every pip on movement you can make $100.00. With the mini account you will control 1 tenth of a lot. $1000.00 for $100.00 and your pip is worth $1.00. Just so you will understand a pip is what an increment movement in a currency is. You buy it if you think it will go up and sell it if you think it will go lower. Of course there are charts and all kinds of ways t

By:  Ivan Cavric No discussion of trading system evaluation would be complete without a discussion of drawdown. We must always look at the maximum drawdown of any trading system as it is very, very important. The maximum drawdown of trading system is defined as the greatest peak-to-valley drawdown in a trading system’s equity. Let’s say for example that we have a trading system that reaches a particular equity peak of $100,000. Let’s further say that two weeks later, the trading system equity is at $80,000. In this example, let’s say that the $80,000 equity happens to be an equity valley. In that case, the peak-to-valley drawdown would be $100,000-$80,000 equals $20,000. This means that the maximum drawdown is $20,000. So why is the maximum drawdown such an important measurement in our evaluation of a trading system? It’s because the maximum drawdown gives us a measure of the survivability of the trading system. A simple measure, but a measure nonetheless. Basically, when we look at th

By:  Ivan Cavric Below you will find the six common beliefs followed by the bulk of traders - and if you believe these myths as well, then they will restrict your chances of making significant currency trading profits.  Ninety percent of currency traders believe at least one or more of these myths - which explains why ninety percent of traders don’t make much profit by trading currencies! 1. You should always be in the Market in Case you Miss a Move Traders love excitement, and their view is, if they are in the market they may catch the big move. Well they may - but chances are they won’t. The big trends only come a few times a year in each currency - and you should stay out the market until they come, otherwise you will take losses, and run up commissions that will deplete your account.  Wait for the big trades - patience is a virtue in trading. 2. Diversification Reduces Risk, and Increases Profit Potential Diversification simply dilutes your profits.  You hit a big move, and your o

By:  Ivan Cavric Many people who enter the forex field are unaware of how crucial a proper forex trading training is. Relying o intuition is only enough to get you by minimally. If you do not know how to analyze the market properly and manipulate it, you will not be able to succeed in forex trading. Just like any other endeavor in life, you need to learn the trade before you begin practicing it. Trying to trade in the forex system without learning the system first, would be like trying to play any game without knowing the rules and objective beforehand. It just doesn’t make sense. There are a few elements in forex learning that help the forex trader succeed in the market. The first element is discussing the forex market in depth. There are three elementary concepts a forex trader must know when devising a proper forex trading system for his personal trading needs. He needs to learn money management, risk and execution. These three elements are essential to trading properly. If applied