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Simulated Forex Trading With Demo Account

Simulated Forex Trading With Demo Account

Simulated Forex Trading With Demo Account

Simulated Forex Trading With Demo Account! Many think that simulated Forex trading is simply for the trader who is just starting out. As a matter of fact, many brokers have the same thought. They might only offer their demo accounts for a limited time only. There are other brokers who don’t offer a demo account at all.

Why no demos

There are quite a few Forex brokers who don’t offer demo accounts. They are usually bare bones operations, and unless they are ECN brokers, there’s no reason why they wouldn’t have the ability or desire to offer simulated Forex trading. Knowing that most brokers offer forex demo accounts, it only works to their disadvantage to at least not keep up with their competition. There are hundreds of brokers out there. If you do your homework, you won’t have to settle for something like that.

There are many Forex brokers who have a time limit on their demo accounts they offer. Anywhere from two weeks to a month, they consider it a trial. They believe once you have gotten used to simulated Forex trading, you won’t need the demo account any more and will always rely on your live accounts.

There could be a certain truth to that, but those with experience know that it’s so much more. Generally speaking, the brokers who offer a demo account feel that they want to discourage the person who only wants to play around like they would any free virtual game on the Internet. And to a certain extent there may be some credence to this assumption. There are probably people who view simulated Forex trading as just another online diversion. Brokers aren’t in business to provide free games and there is a certain truth to their logic for limited demos.

Why demos

Before any golfer puts the club head to the ball, he has taken a few practice swings. Before any baseball batter approaches the plate, he’s taken a few practice swings. It’s not that they’ve never hit a ball before.

The same is true for simulated Forex trading. It’s the practice swings. This practice applies to the novice and experienced alike. If an experienced Forex trader wants to try out a new strategy and he has a demo account, he has a perfect place to get comfortable with the strategy before he puts it into effect in his real trading account. If he’s trying out a new Forex pair that he’s not familiar with, he can try it out on his demo account. There are dozens of reasons for the experienced Forex trader to use a demo account.

It is rather obvious why a new trader would want to experience simulated Forex trading before he sinks real money into an account. The newbie needs to get comfortable with the whole process of buying and selling online; no less strategies and discipline. The demo account shouldn’t be a luxury; it should be considered a necessity. A new trader shouldn’t choose a broker that doesn’t offer a demo account. It’s that simple.

If you can find a broker you’re comfortable with who offers an unlimited demo account; go for it. It’s not just for the new guy. And it’s certainly not just for fun.

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Forex Market Hours and Maximum Profits

Forex Market Hours and Maximum Profits

Forex Market Hours and Maximum Profits

Forex Market Hours and Maximum Profits! In terms of actual Forex market hours, there are three trading sessions in the Forex market, the Tokyo session (7pm -4am EST), the London session (3am-12pm EST), and the US session (8am-5pm EST). The premise is simple. You need to find times in which multiple sessions overlap so there is the maximum activity in the market.

Yes, we will spell it out for you, don’t worry. The time slots in which Forex market hours of multiple sessions overlap are as follows:
• 3-4am EST: Tokyo and London are open
• 8-12pm EST: London and US are open

Of course, this does not mean you should not trade beyond these time slots, but these specific time frames might produce higher volatility and profits for the average trader.

The Forex market offers traders many advantages over other financial arenas. These include high potential for profitability, flexible trading locations, the ability to capitalize on a bullish and bearish market, and most of all the Forex market hours, which are virtually endless and constant.

While the Forex market hours are not limited to one time slot or another, and traders can really open positions almost any time they want, there are certain Forex market hours that are optimal for trading.

One of the most blatant characteristics of the Forex market is volatility. What that means is that the market is always moving and moving fast. This has direct consequences for the Forex trader looking to make money. All a trader needs to do is be in the right place at the right time and the market can shoot in any direction, which will lead to major profits. This, however, very much depends on Forex market hours.

One other great aspect of Forex trading is that you can profit whether the market is going up or down, but if the market is not moving at all, then obviously there will be no profits. For this reason, Forex market hours are so crucial.

If you open a position when there is limited movement in the market, the volatility will be minimal and as a result, so will your profits. If however, you open a position in Forex market hours that are busy, the volatility will be up, and as you probably guessed, so will your profits.

Of course, just like everything in life, the higher the risk, the higher the reward. In this case, the higher the reward, the higher the risk. Are you confused? What I mean to say is, yes, if there is high volatility, you can make more money, but you can also lose it just as fast if the market moves against you. Trading carefully and professionally is a topic for another time, so we will leave that alone now and focus on the best Forex market hours to trade.

To better understand the best Forex market hours to trade, let’s first talk about the best and worst days to trade. It has been proven time and time again that the Forex market is most active in the middle of the week. This is true across all major pairs

When trading Forex, the weekend starts early and the market is only busy for half of the average Friday and then calms down once 12 PM EST arrives. The market closes at 5 PM EST. Holidays, weekends, and days with major news reports are some examples of Forex market hours you want to stay away from.

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When to Use a Take Profit Order

When to Use a Take Profit Order

When to Use a Take Profit Order

When to Use a Take Profit Order? One of the most common reasons to place a take profit order is that you expect the market to put up a fight against your position at a certain area. For example, you may find that there is a massive resistance area up ahead on your buy order that will more than likely give you trouble. When you can clearly identify this, you may want to put in a take profit order.

One of the biggest determining factors of whether or not you might place one of these orders is if you are trading with the overall trend or against it. If you are trading with the long-term trend, a take profit order may not be wise as it will possibly cut profits before the move is over. In fact, when trading with the trend – the wisest choice is to let the trade run as far as you can. If you are taking profits at a particular level, you are prohibiting the trade’s full potential.

If you are trading against the trend, a take profit order makes perfect sense as the prevailing trend tends to hold up over time. Because of this, you might face extra resistance against your position when approaching these areas. It is a simple matter of the full force and weight of the market working against you. When trading against the trend, you are better off to take your profits and get out while ahead as trends tend to last for years in the forex markets, and moves can suddenly happen in their favor.

When placing a take profit order, you are limiting the potential returns on your trade. There is no real way around that, and as such it is something you need to think about. While they do have their place, they should only be in specific situations where you are trying to get quick profits and out of the market as rapidly as possible. When you are trading with the overall move, you owe it to yourself to allow the trade to develop over the long haul. By keeping this in the back of your mind, you will find that you should be able to stay on the right side of the fence when it comes to these orders.

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Who Trades Forex?

Who Trades Forex?

Who Trades Forex?

Who Trades Forex? According to survey results presented in 2014:

  • About 70% male, 30% female. Proportion of women highest in Europe (41% female).
  • Median age of 35 – relatively young.
  • 35% in Europe, 40% in Asia, only 4% in USA.
  • Americans have highest average deposit at over $6,000.
  • Breakdown by region: Europe 35%, Asia 24%, Middle East 13%, South America 8%.
  • 84% believe it is possible to make positive monthly returns, 30% do.
  • Larger accounts tend to be more profitable.

A big part of understanding any market is knowing who the market participants are and getting a handle on the structure of the market. The Forex market is the largest market by cash volume in the world, with approximately $4 trillion worth of currency changing hands every day. Unlike regulated stock markets which trade in shares of public companies, the Forex market is not centralized, and it is best to think of it as a series of fountains or a wedding cake, with the most important participants at the top, with trades cascading down. The largest participants get the best terms and can move the market with their trades, although as the market is so big, it is difficult for any entity to manipulate. Working in order of size from the top down, the Forex field looks like this.

Central Banks

Central banks are national banks, in charge of issuing and lending the national currency. They are at the very top of the “food chain”. The usually also set monetary policy such as interest rates, and can increase or reduce the supply of their currency. They also usually have enormous reserves of other currencies and stores of value such as gold bullion. This means that they have several powers which when exercised can move the market in their currency dramatically. Probably the best example of this occurred in 2015 when the Swiss National Bank announced a surprise removal of the Swiss Franc’s peg to the Euro, which had the effect of moving that exchange rate by up to 30% in some quotes. Central banks often have policy aims, whether officially stated or not, of preserving their currency’s relative value within certain bands, and they will implement such policies by intervening in the Forex market when the band’s limits are threatened. Note that they are not universally successful: the Bank of England unsuccessfully tried to hold up the value of the British Pound against the German Deutschmark in 1992, but were forced to abandon their attempt after spending more than a billion Pounds in the market. It is much easier for central banks to devalue their currency than it is for them to maintain or increase a value. Central banks also have a role in lending and providing liquidity to the largest banks which serve their nations. If these large banks get in trouble, it is the central bank which must intervene to clean up any mess.

Banks

Most of the market volume is traded in the interbank market, i.e. between banks. Banks trade for both themselves and for their clients, which will be listed further down the chain below. The interbank market is dominated by the “big four”: by volume, this is Citibank at 12.9%, JP Morgan and HSBC at 8.8% each, and Deutsche Bank at 7.9%. Banks trade for themselves both as a speculative venture (although the size of this business is decreasing) and to build their own inventory of currency, as well as acting as a dealer to large, professional market participants. As dealer, banks make their profit from the bid/ask spreads which they impose on exchange rates quoted to their clients.

Investment Managers and Hedge Funds

The biggest customers of the banks are speculative hedge funds and manager of other investment vehicles. They may want to exchange currencies either to finance purchases of securities denominated in currencies which they do not own, hedge against a risk in future fluctuations in currency exchange rates which could adversely affect their portfolios of securities, or simply to speculate upon such fluctuations for profit. While hedge funds trade in very large volume and get a lot of publicity, the pension fund industry accounts for a larger total of assets under management. However, as their trading style tends to be more conservative, it is the hedge funds as bigger risk-takers which tend to have a bigger influence upon the Forex market.

Corporations

Corporations, like investment managers and hedge funds, also deal with banks. Larger corporations tend to deal with the larger banks directly, while smaller businesses will work with smaller banks. Forex brokers are corporations and fit in this niche in the chain of dealing. Many corporations are multinational or at least engage in international trade. Even if they do not, their profits may be exposed to the risk of fluctuations in currency exchange rates. For these several reasons, corporations need to make currency transactions, and are often at a market disadvantage because they are forced into the market: they cannot always pick and choose when they trade. For this reason, trading in Forex derivatives such as swaps and forwards is often engaged in by corporations as an effective way to hedge against such risks well in advance. Note that the total volume of Forex traded by corporations for business purposes is dwarfed by the amount traded by Investment managers and hedge funds for speculative purposes, although it could be argued that many investment managers are trading as hedgers rather than as speculators and so share some elements typically characteristic of corporations.

Retail Traders

Unfortunately, we are at the very bottom of the chain, trading on worse terms than every other actor listed above. We need retail Forex brokerages to trade, and these brokers may not even be hedging their risk on our trades. If they are, they will be usually use a bank for their Forex dealing, which in turn is probably using another bank, which may then finally have behind it one of the “big four” or tier 1 banks. At each level, the prices, spreads etc. will slowly worsen. So, who are the hundreds of thousands of people like us who trade Forex with retail brokers?

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