Here are some of the most common terms used in FOREX trading.

Ask Price ¨C Sometimes called the Offer Price, this is the market price for traders to buy currencies. Ask Prices are shown on the right side of a quote ¨C e.g. EUR/USD 1.1965 / 68 ¨C means that one euro can be bought for 1.1968 UD dollars.

Bar Chart ¨C A type of chart used in Technical Analysis. Each time division on the chart is displayed as a vertical bar which show the following information ¨C the top of the bar is the high price, the bottom of the bar is the low price, the horizontal line on the left of the bar shows the opening price and the horizontal line on the right of bar shows the closing price.

Base Currency ¨C is the first currency in a currency pair. A quote shows how much the base currency is worth in the quote (second) currency. For example, in the quote - USD/JPY 112.13 ¨C US dollars are the base currency, with 1 US dollar being worth 112.13 Japanese yen.

Bid Price ¨C is the price a trader can sell currencies. The Bid Price is shown on the left side of a quote - e.g. EUR/USD 1.1965 / 68 ¨C means that one euro can be sold for 1.1965 UD dollars.

Bid/Ask Spread ¨C is the difference between the bid price and the ask price in any currency quotation. The spread represents the broker's fee, and varies from broker to broker.

Broker ¨C the intermediary between buyer and seller. Most FOREX brokers are associated with large financial institutions and earn money by setting a spread between bid and ask prices.

Candlestick Chart - A type of chart used in Technical Analysis. Each time division on the chart is displayed as a candlestick ¨C a red or green vertical bar with extensions above and below the candlestick body. The top of the extension shows the highest price for the chart division and the bottom of the extension shows the lowest price. Red candlesticks indicate a lower closing price than opening price, and green candlesticks indicate the price is rising.

Cross Currency ¨C A currency pair that does not include US dollars ¨C e.g. EUR/GBP.

Currency Pair ¨C Two currencies involved in a FOREX transaction ¨C e.g. EUR/USD.

Economic Indicator ¨C A statistical report issued by governments or academic institutions indicating economic conditions within a country.

First In First Out (FIFO) ¨C refers to the order open orders are liquidated. The first orders to be liquidated are the first that were opened.

Foreign Exchange (FOREX, FX) ¨C Simultaneously buying one currency and selling another.

Fundamental Analysis ¨C Analysis of political and economic conditions that can affect currency prices.

Leverage or Margin ¨C The ratio of the value of a transaction to the required deposit. A common margin for FOREX trading is 100:1 ¨C you can trade currency worth 100 times the amount of your deposit.

Limit Order ¨C An order to buy or sell when the price reaches a specified level.

Lot ¨C The size of a FOREX transaction. Standard lots are worth about 100,000 US dollars.

Major Currency ¨C The euro, German mark, Swiss franc, British pound, and the Japanese yen are the major currencies.

Minor Currency ¨C The Canadian dollar, the Australian dollar, and the New Zealand dollar are the minor currencies.

One Cancels the Other (OCO) ¨C Two orders placed simultaneously with instructions to cancel the second order on execution of the first.

Open Position ¨C An active trade that has not been closed.

Pips or Points ¨C The smallest unit a currency can be traded in.

Quote Currency ¨C The second currency in a currency pair. In the currency pair USD/EUR the euro is the quote currency.

Rollover ¨C Extending the settlement time of spot deals to the current delivery date. The cost of rollover is calculated using swap points based on interest rate differentials.

Technical Analysis ¨C Analysis of historical market data to predict future movements in the market.

Tick ¨C The minimum change in price.

Transaction Cost ¨C The cost of a FOREX transaction ¨C typically the spread between bid and ask prices.

Volatility ¨C A statistical measure indicating the tendency of sharp price movements within a period of time.

The old battlefields of the middle ages are not gone, they have merely changed form. Hundreds of years ago normal men would set out to build their empires by conquering lands through the force of arms. Today, normal men like you and i set out to build our financial empires by conquering markets throught the force of self. The blood soaked battlefields of yesterday have made way for the cash soaked commercial battlefields of today, with the large private armies of Family warlords making way for large pools of family capital. Just as armies were needed to shape empires of the past, so too is capital needed today in order to put modern commercial plans of conquest into action.

In there, lies the reason as to why many forex traders fail. They go into battle risking too many soldiers (capital) and without the knowledge of tactics needed to win the fight.

Lets look at that again. 1. They risk too much capital, 2. They do not understand Forex markets.

Many traders both successful and miserable have made these mistakes, the main reason for me writing this article is so you can learn this lesson here and do not have to make this mistake and lose money, or at the very least be cautious enough to minimise your losses.

No general will risk a majority of his men in a battle that he has no plan for and where he has no idea about his enemy. So my question to you is, why would you risk your capital in market conditions you know nothing about? Luckily two remedies exist for the forex general who finds himself in this situation.

1. Make it a rule to only risk 1% of your capital in any one trade. This is to minimise your losses.

2. Educate yourself so you can recognise your chance to strike but also recognise when it is neccessary to withdraw. Learn to read the conditions of the forex battlefield. Great generals of the past would spend years learning battlefield tactics, luckily we can achieve this in a couple of months.

So in summary only risk 1% of your capital in any trade, and educate yourself about how forex markets work.

The first question that any aspiring forex trader asks when he or she gets to the website like this one is: Why is this person revealing his system to general public when he can make all the money he wants in the forex market. Why share the information with other people?
Well, here is the truth. The vast majority of the trading systems out there are useless rehearsed garbage. They are written by people who can not make a single penny in the real trading world.
My interest in trading the financial markets dates back to 1996. when I was banned from most of the Nevada casinos. Up until that time I was making my living by counting cards on Black Jack casino tables.
However, greedy casino managers do not like players who are able to use their brains in order to beat the casino at its own game. They prefer “players” who will leave the last dollar at their “fine establishments”. So I realized that if I didn’t want my legs broken I needed to find another source of income…
Financial markets were the natural choice… That was the best choice that I have ever made. Here I am, 12 years later, financially independent. Free. However, I must admit that I have become completely obsessed with my trade.
To me it is no more a question of money and profits. Forex has become my way of life. I live and breathe EUR/USD, USD/CAD, GBP/USD... At the same time it is a lonely way of life. Most of my family and friends are not that thrilled when I bring the “support/resistance” or “price momentum” terms at the dinner table. They are happy when I always pick up the $500 restaurant bill, but they don’t really care how I made it.
That is why every couple of years I take some time off my main trading business and share the information with people like you. People who are hungry to learn and succeed. Back in 2001. I came out with “Online Trading for Financial Freedom™” that was an instant classic. In 2003. I was the first person on the Net to write a complete forex trading system, put it into pdf format and provide it to general public. It was called “Forex Trading Course™”. In 2005. I published “Forex Trading Strategy™”, a trading system that gave all of the forex industry a severe case of headache.
And now I am coming out with all of the tricks and techniques that I have acquired over the years in a single system that I have named “Street Smart Forex™”. It is a lethal combination of trading techniques that are easy to implement and at the same time brutally effective. It is explained in a manner as if you were sitting at my trading desk and watching me trade.

The foreign exchange market (FOREX) offers many advantages to investors. But you need to know where to begin. This short guide will give you the FOREX basics, so you can quickly start participating in this fast growing market.

In the past, foreign exchange trading was limited to large players such as national banks and multi-national corporations. In the 1980’s the rules were changed to allow smaller investors to participate using margin accounts. Margin accounts are the reason why FOREX trading has become so popular. With a 100:1 margin account, you can control $100,000 with a $1,000 investment.

A Learning Curve

FOREX is not simple, though, so you’ll need some knowledge to make wise investment decisions. Although it is relatively easy to start trading on the FOREX, there are risks involved. Your first move as a beginner should be to find out as much as possible about the forex market before risking a dime.

Find A Forex Broker

FOREX traders usually require a broker to handle transactions. Most brokers are reputable and are associated with large financial institutions such as banks. A reputable broker will be registered as a Futures Commission Merchant (FCM) with the Commodity Futures Trading Commission (CFTC) as protection against fraud and abusive trade practices.

Open an Account with a forex borker

Opening a FOREX account is as simple as filling out a form and providing the necessary identification. The form includes a margin agreement which states that the broker may interfere with any trade deemed to be too risky. This is to protect the interests of the broker, since most trades are done using the broker’s money.

Once your account has been established, you can fund it and begin trading.

Many brokers offer a variety of accounts to suit the needs of individual investors. Mini accounts allow you to get involved in FOREX trading for as little as $250. Standard accounts may have a minimum deposit of $1000 to $2500, depending on the broker. The amount of leverage (how much borrowed money you can use) varies with account type. High leverage accounts give you more money to trade for a given investment.

Trades are commission-free, meaning that you can make many trades in one day without worrying about incurring high brokerage fees. Brokers make their money on the ’spread’: the difference between bid and ask prices.

Paper Trading Forex Market

Beginning traders are strongly advised get accustomed to FOREX by doing "paper trades" for a period of time. Paper trades are practice transactions that don’t involve real capital. They allow you to see how the system works while learning how to use the various software tools provided by most FOREX brokers.

Most online brokers have demo accounts that allow you to make free paper trades for up to 30 days. Every new FOREX investor should use these demo accounts at least until they are consistently showing profits.

FOREX Software

Each forex broker has its own set of software tools for making transactions, but there are a few tools that are common to all FOREX brokers. Real-time quotes, news feeds, technical analyses and charts, and profit-and-loss analyses are some of the features you can expect to see on most online brokers’ web sites.

Almost every broker operates on the Internet. To access a broker’s online services you’ll need a reasonably modern computer, a fast Internet connection, and an up-to-date operating system. Once your account is set up, you can access it from any computer just by entering your account name and password. If for some reason you are unable get to a computer, most brokers will allow you to make trades over the phone.

There are lots of ways to make money. FOREX trading is just one more potential stream of income — if you are prepared to learn and practice.

Yoy Gonna Love This..Foreign exchange markets and prices are mainly influenced by international trade flows and investment flows. The FX markets are also influenced, but to a lesser extent, by the same factors that influence the equity and bond markets: economic and political conditions especially interest rates, inflation, and political instability. Those factors usually have only a short-term impact, which makes Forex attractive as it offers some of the diversification necessary to protect against adverse movements in the equity and bond markets.Foreign Exchange prices, or quotes, include a "Bid" and "Ask" similar to other financial products:
Bid: Price at which Dealer is willing to Buy and Traders can Sell CurrencyAsk: Price at which Dealer will Sell and Traders can Buy CurrencyThe difference between the Bid and Ask is called the "Spread", which is the Trader's cost of the transaction. For more information on the Spreads offered by Forex N Trading.
Currencies are usually quoted to four decimal places, such as the Euro/US Dollar trading at 1.2400/1.2403, with the last decimal place referred to as a point or "pip". A pip for most currencies is 0.0001 of an exchange rate; the one exception is the USD/JPY quote in which each pip is equal to 0.01

In order to become an adequate participant on FOREX market – professional trader, it is necessary to cover inevitable stages and get skills and knowledge, which are essential for working on FOREX, in process.

To be a novice trader – does not mean to incur losses. Owing to the fact that the accounts of InstaForex do not have limits to the volume of minimal lot, you can start working with any sum, having the opportunity to reduce risks. With increase of your confidence you enlarge the volume of trading operations, increasing risks and the opportunity to get higher profit.

3Steps of Forex Market

1 Step. Training on DEMO-account.

Every person can open DEMO-account and learn how to operate the trading terminal and trading strategies for unlimited period of time and absolutely free. Even without having any idea about FOREX market you can try yourself as a trader, opening a DEMO-account. In spite of the fact that all deals on DEMO-accounts are virtual and are not put on FOREX, you have the full copy of all terms and conditions as the are on the live accounts. On the DEMO-account you can complete deals as well as you would do on the real account.Doesn’t matter how many questions you have – you can try to answer them using the DEMO-account, without any risks and having the opportunity to open unlimited quantity of such accounts totally free. Moreover, 24/5 support department is available by ICQ, chat, telephone or e-mail.

2 Step. Trading on the live account.

Having got the hand in working with terminal and learning the main trading strategies, you can try yourself on the real account, limiting your risks. Owing to the absence of limits on minimal deal’s volume you can trade according to the principle “risk=profit”, when you define the volume of your investments.The work on the live account lets you to understand and learn more in comparison with DEMO-account, doesn’t matter how serious you take the virtual trading. Working with real, even minimal funds, you start to feel the connection between your profit and currency movements. This experience is very important for raising to the next level of trader’s development.


3 Step. Professional work.

After having got all necessary knowledge, trader is able to work independently on the currency market, using his own or borrowed trading strategies for getting profit on currency movements. Professional trader indicates the style of his trading and chooses trading tools which are more suitable for his strategy.Not all the new coming traders are able to reach this level, but InstaForex company guaranties that our team bends every effort in order to help every client to go forward and get the full support when any problems exist.

There are several external factors that affect Forex currency trading. These factors include trade reports, GDP, unemployment, international trade, manufacturing etc. The growth or decline in these factors affects a country’s currency value.Foreign exchange is a continuous global market, providing a 24-hour market access to its players. Since it is open only 5 days a week, so weekend is the closing period. Although foreign exchange is the most liquid of all markets, the fact that it is an international market and trading 24-hours a day, the time of day can have a direct impact on the liquidity available for trading a particular currency.The major centers and time zones are that of Sydney, Tokyo, London, and New York. Therefore, forex alerts must consider which players are in the market, since in the modern interconnected financial world, events that occur at any hour, in any part of the globe, can affect some or all parts of the investment community.In forex trading, you are not ignorant like one remains in stock for a considerable period of time about the news affecting the liquidity of a stock. In stock market, you come to know about inside trading, revision in earnings only after the market has reacted upon it.But in forex currency trading, this is not the case. Here you get various forex signals. Significant information affecting a particular currency becomes known to everyone in the trade instantaneously. There isn’t anything as insider trading in a forex market.There are many online forex trading startegy sites. They all maintain a global economic calendar. This calendar indicates the major forthcoming economic, financial and business related events all over the world and which can have important bearing on foreign exchange market. What you have to do is to keep a track of all important events and news.Certainly, it will not be an easy task to watch constantly all the factors affecting foreign exchange trading market. They change in importance over time and condition. But the information is available to anyone and for use to one’s benefit. A currency trader has got a chance to react immediately to any new information.Unlike stock market, another important advantage forex trading offers is that you can do foreign currency trading almost from anywhere from the world. There are so many online forex trading signal platforms available to get instant information and to act within time.Most important GDP figures that affect forex trading are of USA, Japan, Canada, Australia and Britain. China is also expected to be a major force in online paper trading in near future.Central banks play a significant role in the forex market because they have the responsibility of changing the country’s “base” interest rate. A central bank has to maintain growth in the economy in accordance with inflation, so it creates a good balance in interest rates. The bank’s decisions on whether to raise, cut, or hold the interest rate fuels speculation in the forex market, where the value of a currency, or group of currencies, changes in real time. Natural disasters, terrorist attacks, and militarily actions in a sensitive region can have a significant impact on the forex market as they create a disturbance in the world.