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Everything Forex Trading Part I of II

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The Foreign Exchange is also knows as currency trading, Forex, or simply FX. In Forex trading every currency worldwide is traded in a global market. With an average trading volume of $5 trillion per day, it is the most liquid and largest market. All stock markets combined don’t even come close to this number.

With such high volume of trading, you may find some great oportunities for yourself in the forex market.

A single USD on any given day could get you 1.1 CAD. The very next day this USD could get you 1.15 CAD. Small changes such can these might not seem like they’d make a difference, but when put on a large scale, the significance becomes apparent.

Lets use an example of a company who pays employees overseas. Imagine what currency exchange rate could do to the company’s bottom line. Lets say for example, they are exchanging one currency for another that is at a higher value. It would be beneficial for the company to make their trade on a day when the exchange rate is lower. If the company needed to exchange USD to CAD, using the example above, it would greatly benefit the company to make their exchange on the day where CAD is 1.1 rather than 1.15. Pennies will add up quick when on a large scale.

Like being a business owner or traveler, when trading forex, you will want to make trades with the knowledge of when exchange rates will change to receive a more favorable rate.

FOREIGN TRANSACTIONS

Foreign transactions in the market are similar to what you may have done if you’ve traveled abroad. A trip north across the border and you are converting USD into CAD. The exchange rate between the two currencies is based on supply and demand. This is what determines how many CAD you get for you USD and the rate of this exchange is constantly fluctuating.

OPPORTUNITIES IN FOREX: WHAT’S YOUR OPINION?

Like stocks, currencies are traded based on what is their assumed value and what direction that value is headed.

The big difference in forex vs stocks is that trading up is done as easily as trading down. Because the market is so large it is easy to find a buyer or seller for the currency you have your eye on. Based on what foreign news you hear, you can decide the value of certain currency and then buy or sell as you see fit.

If you hear news that will cause the CAD to lose value then you would sell your CAD against another currency. The more the CAD depreciates agains the currency you sell it against, the more profit you make. If the CAD begins to regain value then you begin to lose profit and should quickly get out of the trade.

Read more about how to buy and sell currency as well as information on trading on margin in Everything Forex Trading Part II…

Huge Mistakes Made When Choosing a Day Trading System | Part 6.5

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Poor Relationship with Day Trading Brokers

Obvious Facts About Day Trading Brokers

This may sound obvious, but when a trader doesn’t trade, they don’t make any money. What you may not think about is the fact that their broker doesn’t make any money, either.

The best, most successful trading systems are usually accompanied with an incredible relationship with a broker. These relationships are key indicators of how successful a system can be.

If the relationship is strong, it usually means the broker is happy. If the broker is happy, it usually means the trader is making profitable trades, putting money in the broker’s pocket.

While the above scenario is true in most cases, there are still brokers who will want a relationship with traders regardless of how many trades they make. They’ll even go as far as making sure to portray inactive traders in a positive light and offer low rates in an attempt to gain client referrals.

What To Look For in Day Trading Brokers

When researching a system, there are specific things to look for to determine credibility.

For instance, some educators make more money charging you as an Introducing Broker as opposed to monthly fees. Most brokers set aside a certain amount of money for these Introducing Brokers, who in turn, are registered to profit from client referrals.

The biggest problem with this scenario is that many of these educators have relationships with brokers who pay the most for referrals, instead of brokers who will best meet the needs of clients.

Experience in this area has shown it can be a double-edged sword. One way to recognize an Introducing Broker system is to determine how conservative they are in their marketing. Everything these individuals do is monitored and regulated, so the more conservative, the more likely.

In contrast, educators who aren’t Introducing Brokers will usually identify the best places to trade because they have no incentive to lead you elsewhere.

Additional Overlooked Factors When Choosing Day Trading Brokers

Books, videos and seminars which offer full courses on trading tips and techniques are a very common education tools. Unfortunately, a lot of these resources fail to reference the steps necessary for setting up a broker account.

Additionally, it may surprise you that even some of the largest trading platforms on the planet don’t offer phone or email support.

If you’re researching a system and the educator doesn’t provide videos, ongoing support or live help in regards to setting up a broker account, the education likely won’t translate into actual trading.

That being said, the industry as a whole is getting better in this regard. Most online brokers now offer support options, but even these don’t typically cover all the bases. Before making any type of payment, make sure you’re getting more than just a generic education.

Day Trading Brokers on Taxes, Retirement Planning and Interest

You may find it difficult to locate any type of information on taxes, retirement planning and interest in day trading.

Taxes are a big part of trading. Tax implications can be significant for trader, depending on how their account was set up of course.

To combat this, many traders set up corporations to trade with. This may or may not be the right step for you. As you’re choosing a system, make sure you have information to help you navigate this.

Retirement planning goes hand-in-hand with taxes. There are a lot of ways to integrate your account with Traditional IRAs, ROTH IRAs and other tax beneficial strategic investments.

Brokers work with their type of accounts, but often neglect to mention this integration capability.

Be aware that most of these accounts require higher minimum balances to start.

Find Day Trading Brokers Through DayTradeFEED.com!

This article is only part 6.5 in a series aimed at helping day traders understand what mistakes to avoid.

First Mistake: No Ongoing Support/Education

Second Mistake: No Specific Way To Replicate Results

Third Mistake: Repeating Key Entry and Exit Strategies

Fourth Mistake: Paying for Trading Seminars, Books & Videos

Fifth Mistake: Make Money Day Trading (System Not Compatible)

Sixth Mistake: Pitches that Win Now, Lose Overall

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