Socializing as a Forex Trader

Forex trading is quite a lonely profession really, as you will find yourself trading alone a lot at your computer, especially if your strategy involves day trading or at least is time-consuming for you. Not only will you find it hard to find time to socialize as a Forex trader, but you will also probably not know where to go in order to find like-minded individuals.

Networking is the answer. You need to interact with people like you. Of course it's good to go out, make friends and see your family too but if you want your socializing time to also be beneficial for your Forex trading career, networking would be the answer. You can network in a variety of different ways, on the internet and in real life. However, regardless of whether you want to do it online or offline, you will find it far easier finding groups online.

If you look on the internet you can find Forex trading groups on popular social networks, but you can also find local meetups, seminars and other networking events too if you look carefully.

Social Forex trading networks are also a good idea, which involve interacting with other Forex traders and exchanging information etc. All of this can not only help you to get in touch with people like you, but it can also help you to make more money in the Forex market and throughout your Forex trading career.

Some extremely driven people will put off socializing altogether and just keep on working, but if you do this you will burn out eventually. Every now and then you should take a break. You should see breaks as profitable, because they are. By taking a break, you will go back feeling much better and more refreshed. It is mentally and physically draining, trading the markets and so it's best if you take a break once in a while. As mentioned before, these breaks can also be beneficial for you. Going to a networking event for Forex traders could be very beneficial and you would be able to meet lots of different people just like you who trade currencies for a living. Even if you don't trade currencies for a living, you could make lots of contacts and learn a lot by going to a networking event for Forex traders.

In conclusion, there are lots of ways in which Forex traders can socialize in reality. While Forex traders should take time off to spend with their friends and family, they can also take breaks in order to benefit their career more directly by networking with like-minded individuals. If you don't currently do any networking, you really should. One good reason for building a list of contacts is that when you go through a particularly bad time, if you ever do, you can then consult your contacts and ask for help. With all the social networks around online today, networking is easier than ever, so if you aren't already actively networking then you should seriously consider starting soon.

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What Is Forex? An Introduction for Every Forex Beginner

So What is 'Forex'?

The word 'Forex' is simply a shortening of 'Foreign Exchange'. Forex trading is when traders buy and sell different currencies from one currency to another.

So, for example, if you were to buy the European currency (the Euro, EUR) with US Dollars (symbol USD), then you would be 'buying the Euro' and at the same time 'selling the US Dollar'. You would effectively be betting that the value of the Euro compared to the Dollar would increase to have any chance of receiving a profit. Another way of thinking about this trade is that you are going 'Long' on the EUR/USD.

Many people find this concept a little tricky to understand. Why would this particular trade be selling the Dollar? Well, if the Dollar were to drop in value compared to the Euro (remember that you have bought your Euros with US Dollars), then you would be able to buy back more Dollars than you started with, using the Euros which have become more valuable in relative terms. In other words, you would have profited from the decline of the Dollar.

Base and Quote Currencies

The first currency quoted in a currency pair is called the base currency and the second currency is called the quote currency. In the above example, the base currency is the Euro and the quote currency is the US Dollar.

So you may see a quote like this:

EUR/USD = 1.2288

This means that 1 Euro (the base currency) is presently worth 1.2288 US Dollars (the quote currency).

Forex traders usually place a trade through a broker who have direct access to the fx market via an associated partner in the Interbank Market. When you close out your trade, your broker will close the position with this partner and calculate the loss or gain on the trade, which is then applied to your brokerage account. These days, high speed communications and technologies which link all players in the FX market mean that trades can be opened and closed in a matter of seconds.

Forex Trade Example

Here's an example of a currency trade. Suppose you thought that the Euro was going to weaken compared to the US dollar in the coming weeks (note that forex traders can trade on timescales ranging from minutes to years). This time, going short on the EUR/USD assuming this belief turns out to be correct would be a smart move.

There are no 'shorting' restrictions in the forex market (unlike the stock market) so this trade would be very straight forward to place through your broker as long as you had the required deposit.

So the quote today might be:

EUR/USD = 1.2288

You think the Euro will decline in value against the USD, so you place a short order on this currency pair and purchase 1000 Euros. This costs you $1228.80 US Dollars.

The next week, the quote is now:

EUR/USD = 1.2008

1 Euro is now only worth $1.2008 US Dollars. Having shorted this currency pair (which is the same as going long on the USD/EUR opposite currency pair), you will have made a profit of $0.0280 x 1000 = $28.

Note, it is important to realize that your broker will take a brokerage fee from both placing the trade and closing out the trade, whether or not you make a profit.

Forex currency pairs are usually traded on futures markets such as the Chicago Mercantile Exchange (CME).

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How Does Forex Margin Trading Work?

Forex margin trading comes into play when a trader would like to utilize their margin account when they are trading in the foreign exchange currency market. You may not know what a margin account is. In order to better understand this concept, you should have an idea of what leverage is. Leverage is the amount of money that you borrow from your broker in order to begin trading in the foreign exchange currency market.

Keep in mind that you do not have to use money that you do not currently have. However, if you use leverage, then you have the possibility of getting back more money than you had put into the market. This is why there are so many people that choose to trade currency in this market. You should know that there is always the possibility that you lose the amount of leverage that you have put into your account. This means that if you do not have the amount of money that you need in order to cover the leverage, you will end up owing your broker that amount.

In most cases, when you first open your account in order to being trading in the foreign exchange currency market, your broker will require you to deposit money into your margin account. You do not have to use the money that is in these accounts to make trades with, but if you choose to use it, then you can get an even bigger return. However, if you have never traded in this market before, you may want to consider keeping the money in your margin account. If you end up losing your leverage, you will be able to use the money that is in your margin account to pay your broker.

If you have spent a lot of time learning about the foreign exchange currency market, and you are comfortable with utilizing your margin account for trading, then there is no reason why you cannot do this. Before you begin setting up your margin account with your broker, you should keep in mind that different brokers have various requirements that you will have to meet. For example, you will have to invest 1 to 2 percent of your leverage into that account. Brokers do not charge interest on this amount of currency. A lot of the money that is in this account will be used by your broker as security to ensure that you will be able to pay them back if you are unable to pay them.

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How To Using the Stochastic indicator to invest in Forex?

What is the stochastic indicator? 

Oscillator-type indicator is a technical analysis or stochastic indicator known as Stochastics. George Lane, who developed this indicator and was first applied in the market at the end of the years 50's and early 60's.

This indicator is measured on a scale from 0% to 100%, and determines the deviation of the closing price on the market, compared to normal levels, a period set by the operator. It is important that you know that this indicator is not recommended for use in trending markets, because there is less effective. 

How to use the stochastic indicator? 

The main idea of how the stochastic indicator is that you see clearly how this indicator determines when going to happen in the market an upward or downward movement, watching you or specifically looking at the intersection of the two indicator lines.You can use this indicator to calculate the levels of overbought / oversold (RSI), also for find points of entry at the intersection of lines and moving averages of market direction, and to locate points of divergence, with the aim of providing some weakness in the market trend. 

This indicator consists of two lines:

1. The main line is called% K

In the main line fluctuations (% K) tend to be more distinguished than the secondary line (% D), because it is more sensible. He is represented in the graphs as a compact line.

2. The secondary is called% D
D% is the moving average line% K. He is represented in the graphs as a dotted line. 

There are 3 types of stochastic: Slow, fast and full. 

1. Fast Stochastic: % K line is not uniform, so there is no moving average. This type tends to provide an early indication a turnaround in the market. 

2. Slow Stochastic: Contrary to the fast% K line is a bit more uniform, using three periods of moving averages of values ??derived from line% K Fast Stochastic. This type of stochastic provides more reliable signs or signals. 

3. Full Stochastics:Allows you to blend the two lines% K and% D. As in other indicators, suggests that you put as a reference two lines between 20 and 80. These baselines will serve to highlight potential overbought levels (above 80%) and oversold (below 20%). 

The stochastic indicator provides 3 types of signals for trading in the Forex market: 

1. Overbought / oversold: This signal occurs if the line passes stochastic above 80% mark and then, the indicator returns to the middle zone, the market should move in the same direction, ie a movement on the downside. The same is true when the line passes stochastic below the 20% mark and then the display returns to the middle zone, the market should move in the same direction is an upward movement. 

What to do? You must wait to cross lines to confirm. 

2. Crosses: This signal occurs if the two lines cross in the upper zone (above the 80% mark) and then, the indicator returns to the middle zone, the market should move in the same direction, ie a movement the downside. The same is true when the two lines cross in the lower zone (below the 20% mark) and then the display returns to the middle zone, the market should move in the same direction is an upward movement. These moments are regarded as the strongest signals. 

What to do? 

In this case you should sell at the intersection of the lines% K and% D, when they are above the 80% mark, and buy at the intersection of lines% K and% D, when it is below the line of 20%. 

3. Divergences: It is considered the most important signal, which can be useful for confirming signals. 

It is divided into:

• Bearish Divergence: This signal occurs when new high or new highs, higher and higher in the market and their corresponding peaks are progressively smaller. This is a possible sell signal. 

• Bullish Divergence: The bullish divergence occurs when there are new market or new lows consecutive low shrinking and the corresponding minima are progressively larger.This is a potential buy signal. 

What to do? In this case, if you sell and buy a bearish divergence if it is a bullish divergence. 

What you should NEVER do? 

• Never buy or sell unless he has found the intersection of lines. 

• Never buy or sell, if it is right in line crosses the limit set or between the two limits. 

• Do not use this indicator in Forex trading markets with heavy trends.

Remember that no investment is risk free and stochastic indicator in forex will help most effectively when used in conjunction with other tools.

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