Can you really make money from forex?

The answer for this question is yes; of course it’s obvious that I would say so. The hardest part in this scenario is to avoid loosing money before you make some profit at all. The point to mention is that you're going to have to do a little homework to be successful at this. It’s easy to learn how to claim some cash from the $3.2 trillion that trade through the forex market every trading day, if you make yourself do some homework everyday.

There are thousands of people who make money by trading in forex since a very long time. Fortunately, nowadays forex trading has become more and more uncomplicated as computer and internet enables you to trade right from your house. You can sit at your personal computer and trade from home without having to make any phone call or referring to any bank.

Buying cheap and selling expensive or selling expensive and buying cheap is the philosophy used in the forex world. The story behind the trade can be explained by a simple instance. Let’s say you are trading GBP against USD, and you buy GBP for 3.456 USD. Later you sell the GBP when the apples ripe, you sell it for 3.788 USD and make some profit. Immense difference between a forex market and other markets such as a stock market is that you don’t need huge investment to start trading. You can start an account with a small investment and make reasonable profits. For example, with a $1000 account, you can make about $1000 per month. Of course it highly depends on the way that you trade and the strategy that you follow but good and experienced traders can double their money every month.

Forex trading is like driving a car. Always drive a car after you are sure you can drive, or you are going to hurt yourself and others as well. So always make sure that you know about forex markets in and out before start trading to become a successful trader. The end result is; you will yield the harvest according to the product of time and effort you put in. Do this the right way and it can change your life. If you are looking to get rich quick, Forex can do it, but it can break you just as quickly, so beware.

What is the best time to trade forex?

As mentioned earlier forex trades takes place round the clock. Currencies are traded 24 hours a day, from Sunday afternoon EST (Eastern Standard Time) to Friday afternoon EST. It’s evident that through this 5+ day week of market activity, it is ensured that there is at least one forex market opened at anytime of the day. Indeed, as some markets close for the night, others open somewhere else on the planet. Since forex trading hours overlap, currencies are being traded continuously. In a nutshell it can be said, forex markets never sleep.

Traders new to the forex market have a preconceived idea, since the forex markets are opened all 24 hours they can trade at any time in the day. But this idea has to be rectified. There are particular times in the forex market that has high profitability. So what are the times that have greater opportunities?
The best time to trade is when large bulk of currencies is traded. All though forex markets 24 hours a day, the best time to trade is when many countries are trading at the same time. In all time zones forex markets operate between 8am and 4pm. So what the wise men do is to trade when many trading hours of popular forex trading countries overlap. This is the time to earn the optimum in forex trading, as it is the most active period and has thus the largest volume of trades and the biggest pip movements.

Forex Trading opens in New Zealand, followed by Australia, Asia (and particularly Japan), the Middle East, Europe (with London being the main financial center) and America.

Forex Trading Hours (EST):

Australia: 5pm - 1 am
Tokyo: 7 pm - 3 am
Singapore/Hong Kong: 9 pm - 5 am
Frankfurt: 2 am - 10 am
London: 3 am - 11 am

What does this mean? The New York and London trading sessions overlap between 7 and 11 am EST. The volatility is much higher and trading opportunities are much more frequent with bigger moves, especially in these four hours. This is when the largest volume of trades occurs, creating a greater chance of making significant profit in the forex market. This is when you can make 30-100 pips trading in just a few minutes or hours, using any of our strategies in any time frame, especially around news releases.

How to choose a good broker

After you have laid out plans to sail in the forex market and lay your money management plans it’s now the time to look for a good broker. It is not going to be a easy task as it needs some research to stumble on a good broker.

I'm sure you know it, but the forex market is unregulated. That is, it doesn't have a governing body like the SEC for the stock market watching over it. That means that there will be atrocious brokers. A bad broker will shade pips, take the other side of your order, etc. In general, they will definitely make it harder for you to make money.

There are some things you ought to look for when choosing a broker. Low spreads is one such aspect. Spread illustrates the difference between the price at which a currency is bought and the price at which it is sold. So when selecting a broker keep an eye on their forex rates. Lower the spread, more the profit you earn.

Leverage is yet another aspect to take care of. Leverage is needed to trade currencies due to the fact that price movements are only fractions of a cent. It signifies the ratio between the money you provide and the money your broker is prepared to offer. For instance 100:1 leverage point means that your broker is geared up to provide 100 times more money than you provide.

The more the leverage, the more the risk you take. So a massive leverage will prompt you to an impressive gain or the other way round. When selecting a broker select a broker who has wide options of leverages, so that you can select the leverage option according to your risk management scheme.

Most forex brokers come up with many useful tools such as Real-time currency price charting, technical analysis tools, fundamental analysis commentaries, and economic calendars to assist you in the trading. Forex trading takes place around the clock, so ensure customer support is provided by your forex broker all 24 hours. You can use the information from other forex traders to find out details about brokers, about their customer relationships. You could get hold of a number of a forex broker and find out how fast and efficiently they respond to customer inquiries, before giving your business to them.

So it seems finding a good broker needs some bit of search in the net and some work? Well it’s always affordable to bear some extra work, rather than get caught with a bad broker.

How to become a successful forex trader

Even if you are new to forex markets, still you can become a successful trader if you learn the basics right and learn the proven victory paths that are defined by experts who have excelled in the Foreign exchange world.

The first step is to work smart. There prevails a obvious difference in forex trading and other kinds of trades. In all other professions the more you work hard the more you yield. But in this context the critical point is not how hard you work but how smart you are. Many intellects build complicated forex exchange systems with plenty of hard work, but at the end of the day they fail – the penalty the pay for not being right at the right time.

The consolation news about forex is; you can learn everything you ought to know from the web. A simple trading mechanism is something that is easy to understand and implement, which translates in to discipline and eventually succeed in online trading.

Now let us concentrate on a way which allows you to earn in he amounts. ‘Buy low and sell high’ is the principle used by most traders, but they miss the point here. There exist many breakouts in the market which most traders miss. As you examine the flow of the market you can guess the breakouts and go for ‘buy high and sell higher’.

A success of a trader also relies in the amount of risk he takes. If you are a person who is reluctant to take risks you are not suitable for the forex market. Meaningful, calculated risks are inevitable in the road to a successful forex trader. Trade with a small account risk as much as 10% per trade and don’t move your stop too quickly. This ensures that you don’t get thrown out of the trade by normal market volatility and can stay with the longer term trends.

Patience is yet another key factor that earns you many points. Don’t be in a mind set to be in the trade all the time which will eventually make you a looser. Forex trading doesn’t yield money for the number of times you trade, but for the number of times you are right. So trade only when you think it’s the right time. Wait till the opportunity arises, wait till a breakout occurs.

Becoming a successful forex trader is within the reach of everyone if you think smart, take well calculated risks and learn the essentials yourself.

Let me learn about forex terms

Before entering forex market you should make certain that you are familiar with the terms customarily used in forex trading.

Each country’s currency is depicted in a three letter word. For instance : US dollars is depicted by USD and Japanese Yen by JPY. The first currency in the quote is known as base currency. JPY is the base currency in JPY/USD. A quote of USD/JPY 2.34 means that one USD is equal to 2.34 JPY.

Pip: Pip refers to the smallest increment in the value of the currency. For instance in USD/JPY, a move from 251.35 to 251.36 is one pip.

Offer price: It is the price displayed to the right of the currency pair. It mentions the price at which the base currency can be bought.

Bid price: It is the price displayed to the left of the currency pair. It refers to the value at which the base currency is sold

Spread: The difference between Bid and Ask price in terms of pipes. The narrower the spread, the better for the trader.

Cost of Carry: The cost, referred in terms of pips per day, for holding an open position.

Cross Rate: The exchange rate between any two currencies that are not of the country in which the currency pair is quoted. For instance in UK, USD/JPY would be considered as a cross rate but in US it won’t be considered so.

Limit: An order to buy at a specified price when the market moves down to that price, or to sell at a specified price when the market moves up to that price.

Liquidity: A function of volume and activity in a market. It is the efficiency and cost effectiveness with which positions can be traded and orders executed. A more liquid market will provide more frequent price quotes at a smaller bid/ask spread.

Margin: The amount of money needed in a person’s account to maintain an open position.

Margin Call: A requirement initiated by the broker to deposit more funds in order to maintain an open position.

Market Order: An order to buy at the current Ask price.

Premium: The cost, often quoted in terms of dollars or pips per day, of holding an open position.

Spot Foreign Exchange: It symbolizes the currency exchange taking place between two counterparts, most probably between banks, so it is referred to as the Inter bank market.

Major currencies: Major currencies change frequently and they refer to the mostly traded currencies currently. USD, JPY, EUR, GBP are the current major currencies in the market.

Attitudes that help you to trade successfully.

Everyone might have noticed that the value of a currency fluctuates every day, but merely everyone knows that there is a forex market which is used to trade currencies from your home.

You no longer need to be a millionaire or big trader to get involved in the forex market, you and I with a substantial knowledge about the market, a straight forward mindset, and some experience can yield ample profit. Technology enables you to trade from your home at any foreign exchange market around the globe, which has made forex markets more accessible and has earned them with unprecedented growth over the decades. There are people who have earned billions through this trading. George Soros is a testimony for the profitability of this market as he earned a billion dollars in just a days trading. But on the other hand people also loose a large part of their investment in trading due to some miscalculations or bad luck – if you have faith in destiny.

As you may be wondering how does a forex market differ from a traditional stock market? I can give you some significant differences. Forex markets are opened around the clock and you can dictate how and when to trade. Also you can focus on picking from a few currencies rather than from thousands of stocks. You also have the opportunity to trade on leverages, but it will amplify your profit and your losses. The main and the most attractive characteristic of a forex market in my point of view is you don’t require a lot of money to get started. So ordinary masses like you and I can be part of the forex market.

The way of trading in the forex market is very similar to that of a normal market. The only difference is you sell one currency and buy another, just like exchanging goods.

This makes it clear why currencies are quoted in pairs such as EUR/USD, EUR/JPY. EUR/JPY rate represents the purchase price between the two currencies, how much Japanese Yen could be bought with 1 euro. The principle of trade in a nutshell can be described as below. If you feel that the Euro is going to increase in value in the future you spend you Yen and buy Euro. When the value of Euro escalates, then it’s your chance to sell them and make money. It’s simple as that. But you should also be aware that there is a high risk involved in this business.

Why demo trading is so important

The best piece of advice that every novice forex trader would give to a new comer in the forex trade is to train your self in a demo account before stepping into the actual world.

The purpose of using a demo account if you are new to Forex trading is to get you comfortable making trades and to help you become familiar with the brokers trading platform. So you can trade and test your strategies without risking your actual money. This makes demo accounts good for a brand new trader who just wants to see how trading works.

A free forex demo account is a great way to experience to trade in the market without risking any real money. The opportunity for you to learn, or to train your trading skills is one simple registration away. In order to register for a free forex demo account, you could just simply please fill a form and start practicing trading in forex demo accounts.




Using a free forex demo account you could learn to trade as it was real, learn the correct behaviors of the market, and begin to build the correct foundation for your next real trading.

Once you have made your decision on which broker you like the best, it is time to open a demo account. Most brokers will offer at least a 30 day trial of their trading platform giving you a chance to trade on the platform using play money. Using a demo account is a good opportunity to make sure that you feel comfortable using the broker’s trading tools. You would not want to trade real money without being fully comfortable with the trading platform. A demo account will not only help you get a grip on how to use the broker’s trading platform, but also trading the market in real time.

Forex demo accounts come with all of the features as the real accounts, including advanced charting and order types, market news, indicators and much more.
Forex demo accounts are a fully functional version of the award-winning software, which includes real time rates, professional charts, news and commentary, as well as other important tools for traders.

Forex demo accounts can be used on any computer. The platform can also be installed on multiple computers, so whether a trader is at home or on the road, he will always have access to the markets.

Why 95% of the forex traders lose their money when they first trading?

As I mentioned in the earlier article forex trading can be done with ease by anyone without a huge investment, but there is significant amount of risks involved in it. It’s common in every aspect of any business, the more risk you take, the more you earn. But make sure that you take a more calculated risk so that you don’t become one among those failed 95% debut traders.

The first advice that I would give is that don’t get carried away by the attractive advertisements in the internet. “90% accuracy, earn 20 pipes a day, earn regular income from home” Perhaps you might have come across some of them. Most of these advertisements are made by cleaver salesmen and not by good brokers. Once you come across this illusion you may have to consider these facts.



Patience is a key index in foreign exchange. If you are a nervous and impatient person, I’m sorry that you are not a suitable person for this kind of trade. Sense of anxiousness which will overrule your best judgment, desire for revenge etc will lead you down the lane for a crash. Experienced traders don’t get carried away by short term volatility and they wait in anticipating bigger profits.

People who think themselves as smart fail in forex trading in most occasions. Cleaver people over elaborate their trading with much complexity. The golden rule is to keep your trading as simple as possible as forex is 80% mindset and 20% method. While trading, don’t hesitate to grasp the fact you were wrong, you took the wrong decision, because it’s the market that is going to rule and not your decision. So don’t argue with the market price. Once you know you were wrong regarding the anticipation of the market price be gentle enough to rectify it to avoid further losses rather than being stubborn in your decision.

If you follow an expert’s advice and don’t do your homework to learn the logic behind their method, you are more unlikely to follow their method when you hit a losing streak. Always make sure you stick on to a systematic method, or else you get lost and hit a dead end. Internet bears all the details you need, so make sure you know what you are doing and learn about the market before you enter it, which assures you confidence in your decisions. Forex markets are risky, but approach them with discipline and some effort to succeed in long terms

What you should know about forex before trading?

As mentioned in the earlier article forex trading is one of the riskiest but a money pouring trades in the world. So before you enter this world make sure you know the things you ought to know.

The first and foremost rule is to run on your profits and cut your losses as early as possible. The wiser men always layout a plan and stick to it apart from their overwhelming emotions to go loose from their plans. People get carried away in situations where they go through a winning streak.

The simplest rule in forex trading is the most difficult one to implement and it’s the reason for most of the trader’s demise. Many traders violate their predetermined plan and take their profits before they reach their expected profit margin as they feel extremely uncomfortable sitting in a profitable situation. The same traders will easily sit on loosing position allowing the market to move against them, and loose hundreds of points anticipating the market to turn around. When you trade always predetermine the amount of loss you can absorb and ensure you put a stop when that target is hit.

Do not over trade. The common mistake that most traders do is, they leverage their account too high by trading for much larger amounts than their accounts could withstand. Just because one currency needs 10 000$ as minimal to trade, a trader with 50 000$ should trade a 5 lots. The golden rule at these situations is not to use more than 10% of your account at any time.

Good anticipation and execution is yet another aspect that everyone should consider. The profitability of your decisions and anticipations are not counted in one of your trades, but from your overall trade. So keep in mind the fact that you make profit or loss in the previous trade is not important at all.

So how should you start a day’s trade? Make preparations for at least 15 minutes as an elite athlete makes preparations for an event. Sit in a comfortable position, make yourself relaxed and breathe deeply. Exclude your mind from all thoughts, consciousness, and body sensations. Maintain your all your consciousness only on your breathing which enables you to get rid of others. Forget all your worries about your past and future trades and reach a point of threshold which enables you to surpass boredom and attain a clearer mindset. This might take around 15 minutes as average, but may be more for some people.

Introduction to Forex

Foreign exchange is the term used to illustrate the exchange of a currency of a certain nation to the currency of another. It is the largest market in the planet and its average daily turn over exceeds 3.2 trillion US$. Foreign exchange (FOREX) is also termed as currency exchange.




There exists always a fluctuation in the relative values between currencies. First and foremost two reasons for this fluctuation can be mentioned. The first reason, put in simple terms, when a foreigner comes into a country and wishes to buy things, or invest; he is compelled to change his money into local currency, which drastically changes the demand for the currency. The second reason is speculation. When a buyer or seller feels that the currency acts strongly or weakly he buys or sells accordingly, which stimulates the fluctuation of the value of that currency.

FOREX is said to approximate a perfect market than any other market in practice. According to international statistics foreign exchange markets have continued to grow for the last few years. It had a drastic growth in 2007 as it had a 38% leap between 2006 April and 2007 April. London occupies the cockpit of FOREX as it consumes 34.1% of the total market turnover; New York comes in second with 16.6% and Tokyo with 6.1%. FOREX markets operate round the clock 24 hours a day excluding weekends. While the Asian FOREX markets put up the shutters at the end of the day, American markets open and then continued by European markets, which explains the phrase ‘FOREX markets operate round the clock’. Foreign currency exchange rates do not hang on to a fixed rate all around the globe; they do not have a unified market, but rather have different prices. But since the London market dominates the FOREX industry, London exchange rates are considered to be the reference, although the trading takes place in New York, Tokyo, Singapore, and Hong Kong.

No other market in the world is as fragile to the world events as the foreign exchange market. Foreign exchange rates simply depend upon the demand and supply of that currency. There are ample factors that affect the demand and supply of a currency. They can be classified as economical, political and market psychological factors. Considering the economical factors, budget deficits provide a negative impact on the currency value. Greater the deficits, the weaker become the currency. Consistent trade between nations demonstrates the demand for goods, which eventually pushes the demand for the country’s currency to perform the trade and eventually the currency’s demand gets boosted. Inflation is yet another economical factor that affects the value of a currency. Inflation weakens a country’s demanding power and consequently abates the value of currency.