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    • Month: April 2016

    Learn the lessons of history – good and bad

    The world in which we live is constantly changing. Physically, morally, financially, things which we held to be true ten years ago have in many instances ceased to be the case. However, this does not mean that we cannot learn from the past. After all, a wise man once said these words, or something close: “Those who cannot remember the past are doomed to repeat it”. In other words, unless you learn from your mistakes you stand an excellent chance of making the same mistakes again. In fact, one could go further and say that you should also learn from the mistakes of other people. It is true that you can learn much more from a mistake than you can from something flawless.

    It is, then, an excellent idea to keep a watch for the same data cropping up time and again in the Forex market. Where before you might have been led to believe that a certain market was going a certain way, and followed what the data suggested, you may well have found that that action was ill-advised. When the conditions reoccur you should be highly cautious of reacting in the same way – the potential drawbacks for you could be just as negative, if not more so.

    It is much better for you to do your research and be initially cautious when it comes to trading on the market. After a while of intelligent conduct you may well have earned yourself enough money to put by for security, and let your instincts dictate your actions for a while to see if they make you as much money as you expect.

    Picking the right Forex broker for you

    Playing the Forex market is something which more and more people are doing today, yet for those of us who have not yet begun our adventure in the Forex world, it can be a somewhat cloudy topic. Beginning to invest in the foreign exchange market is not something that just happens. That is to say that you cannot just walk into an office and buy some money in a foreign currency and become a Forex trader by doing so. It requires a process to be put into action, and the first step towards this is to choose a Forex broker.

    Picking the right broker is not something that can be done without a good deal of prior research, as the quality and practices of brokers differ greatly from those who work with large banks (and therefore themselves have greater borrowing power and leverage) to those which are more independent but may suit a prospective trader with specific needs. It is advisable to join an online forum and discuss your own aims with the forum users. Getting a consensus for which type of Forex broker will serve your needs will narrow your possible choice to a point where you can make your own decision.

    Once you have chosen a broker, you will need to open an account. Opening a Forex account involves proving your competence to deal with large sums of money – you will be playing with borrowed money if you get seriously involved, and brokers are not likely to lend to just anyone. It is also advisable to play with a virtual, paper-based account initially, until you are fully confident of your abilities to make a real profit.

    Virtual Trading and how it can help you

    Most people’s first experience of market trading will have been seeing it on the television, often in the shape of many frantic people in brightly colored blazers waving their arms and looking exasperated. At that point, most of us decide that either we want in, or we want nothing to do with it ever again. For the ones who want nothing to do with it, the idea of being in such a pressurised and noisy environment is a real turn-off. However, this is the 21st Century, and being a market trader on the spot no longer means getting yourself to the stock exchange, wearing a blazer and looking exasperated.

    With the Internet now being as powerful a tool as the world has ever seen, we can do an awful lot with a couple of clicks of a mouse. Among these are ways of making a market profit without having to go through the chaos that many of the traders of the past once had to. You can sign up online for virtual trading accounts, and even find and choose a broker. You can add and withdraw money, and all of this without leaving the comfort of your chair. The 21st Century has been kind to us in a number of ways.

    Many traders will argue that they prefer the situation on the market floor, where they can pick up tips and judge moods a lot better. But this does make it easier to get sucked in by false information and mess things up for yourself. Virtual trading allows you to make judgements based on a wider range of information, and for the considered trader it is an indispensable option.

    Bulls and Bears – oh my!

    Anyone who has flicked through the financial channels on their cable TV box without really stopping to listen to what is being said will probably be occasionally confused by references to “bulls” and “bears”. These terms are common parlance in trading situations, and can be heard or read in any market analysis if you stay tuned long enough. They are not references to sports teams, nor to a traveling zoo visiting a trading floor, but rather to styles of market.

    A “bull” market is, in short, a market on the rise. It is characterised by a great deal of investor confidence, which can carry on for an indefinite period of time. When a currency breaks its resistance level, it is expected to continue rising, to move with a singularity of purpose. This is much like the way a bull is characterised. Additionally, it triggers herd behavior, as more and more investors will join in and invest more. The term “bull market” is therefore a good definition of a market behaving confidently.

    “Bear” markets, on the other hand, are the exact opposite of bulls. Where prices fall and the investor mood is negative, the support level may be broken and the price will continue to fall. The most common explanation for the terminology here is that when a bear attacks its prey, it tends to do so by striking downwards. For a true bear market to be declared, a majority of currencies need to fall, however a single currency can be described as behaving “bearishly”.

    The Data of the Forex Market

    Being able to read the comprehensive and constantly-updating information that flashes across the screen in any investment banking firm or hedge fund is tantamount to forgetting the English language and learning to speak it all over again, from scratch. There is so much complicated information on the screen at any given time that it can be rather daunting for a novice or even for someone who feels that they know quite a lot about private finance.

    Learning to decipher the data in the forms in which it comes to you can be a test for anyone. It is important to find, first of all, something that makes sense to you in its present form. From that it is often possible to extrapolate a little bit more information. Before really throwing yourself into Forex trading though, it is hugely important to read everything you can find on all the different ways of collating data, how to arrange the information and what parts of that information to set the most store by.

    Some charts will tell you how the market has been changing over the last day, and sometimes it will also include information on how the price has trended over a period of five, ten, even twenty days. There is data that allows you to predict when a market will stabilise or fall, or even rise, and how to arrange your investments in reference to that information. Knowing how to read all this information won’t make you a billionaire, but it will help you to get a head start.