Currency Trading Basics

The forex market is proving to be a green pasture for those of us who are trying to reap profits out of fluctuations in the values of currencies of various countries. But what are the currency trading basics? Here are some basics of currency trading a greenhorn to the forex market needs to know.

Currency trading happens for two basic reasons. The first, most simple reason is because a Mr. X from the United States wants to go for a holiday in Australia. But he fears that the US dollar might not be as easily accepted in Australia, because it has its own currency, the Australian Dollar. So to be able to buy gifts for the rest of his family, he decides that he'd better convert the USD to ASD to avoid any problems. Simple enough.

But another Mr. Y decides to buy Australian Dollar, not because he's looking for a sojourn on the Gold Coast, but because they are available at rate which he believes will increase. Confused? Let me explain with the help of an example. Suppose today Mr Y can buy 3 ASD in exchange for 1 USD, and - just for a moment, assume that - he can sell them tomorrow for 2 USD, he's going to make a tidy little profit of $1 on what is widely known as the Foreign Exchange (Forex) Market. But why will the price of 3 ASD jump from 1 USD to 2 USD? Because of the fluctuations in the demand and supply of various currencies in the forex market.

Foreign Currency Trading Basics

Firstly, let me explain why the price of the ASD is going up. The forex market works on the old demand-supply model. This means that if the supply of one currency is less (in this case the ASD) and the demand for it is high, then the currency is going to command a higher price in the forex trading market. Now Mr. Y must have done some very detailed research into the expected demand for the ASD before he came to the conclusion that since the demand will increase tomorrow, he can buy it today for a lower price and make a profit tomorrow. Roughly speaking, the forex market too works like the stock market. Say you are holding the shares of Shell on the stock exchange, and if Shell finds some serious quantity oil, then the price of the shares will shoot up and the current holders of shares of Shell will make a good profit. Similarly, if the price of a currency is expected to rise in the near future, one could buy the currency and then sell it at a higher price.

Now let us look at some basic terms used in currency trading and their meanings.

Bid/Ask: In the forex market, there are two prices. One is called the 'bid' price and the other is called the 'ask' price. For example, as of writing this article, the price of a EUR/USD (one Euro to US dollars) was 1.4161/65. Out of these two the 'bid' price is the lower one (1.4161) and is the dollar price that the person who wants to buy the Euro is quoting i.e. he is offering to buy 1 Euro in exchange for $1.4161. The second number (1.4165) is the price that the holder of the Euro is 'asking' i.e. the person who is holding the Euro is demanding 1.4165 dollars in exchange for the 1 Euro.

Pip: A pip (price interest point) is the incremental move which one currency makes over the other. In the previous example, we took the EUR/USD to be 1.4161, if the bidder ups his bid to 1.4165 to match the asker's rate, then it is said that there was a move of 4 pips. If the currency prices are more disparate - like in the case of GBP/INR, (English Pound to Indian Rupee) if it moves up from 78.86 to 78.92 it is still a jump of 6 pips. Pips are calculated on the last two digits on the right of the decimal point.

Why Does the Demand for a Currency Increase/Decrease?

Since the price of the currency is largely dependent on the demand for it, we need to understand what causes the shifts in the demand while learning the currency trading basics. By knowing what are the causes of the changes in demand, we can taken an informed decision on whether or not to buy currency or sell the currency we have in hand. The number of factors which influence the demand are GDP, inflation and interest rates, trade agreements between the countries whose currency is being traded, budget plans, budget deficits, how the national stock market is doing and overall economic and political soundness of the country. For example, suppose the capital market of an emerging market like Brazil is doing rather well. And the nation is earning a substantial GDP and there are no political troubles whatsoever. In such a case, Brazil will be viewed as a potential target for multinationals to invest in. The Brazilian stock market will also come under the radar of foreign institutional investors. Hence, to invest in Brazil and Brazilian companies, one will need Brazilian currency. So the Brazilian currency will be in great demand. This drives the price of the Brazilian Real higher.

So these were the basics of currency trading. Currency market is a highly speculative market and one needs to do a very detailed research before buying currency, in order to make a profit.
By Arjun Kulkarni

Forex Trading Made Easy - How to Make Money With Forex

Many beginners ask how they can get information on forex trading made easy, with the hope of figuring out how to make money with forex and getting rich in a very short time. But the sad truth is that forex trading is never as simple as that.

It is true that trading currency on the foreign exchange markets has the potential to make you rich but that is not going to happen overnight and there are risks. To be successful, you have to understand the market and be able to keep cool under extreme pressure.

A beginner who wants to have forex trading made easy for them will probably try to go ahead and trade with the first system that they find. They may not understand how it works and they may never have tested it for themselves. This is a mistake and usually results in a loss.

It is vital to take the laws of statistics into account and realize that even the best trading systems sometimes have a run of losses. You need to allow for the bad times by keeping your risk low. With a higher risk, a bad run can wipe out your funds.

It is also necessary to follow the system completely in order to figure out how to make money with forex. It is tempting to change a few details, either to save time or because they seem too complicated, but you must not do this.

Understanding how to make money with forex means realizing that there is no perfect forex trading system. There is not a 'one size fits all' forex trading made easy system that will turn a profit on every trade.

Even the best system has its good or bad times and what is more, it will work better for some traders than for others because they have different trading styles and different personalities. This is the reason why you must always test a system for yourself. You can do this with back testing of past results and also in a demo account. Do not rely on somebody else's tests because you have to find out whether you can operate this system profitably yourself.

For forex trading made easy, you should begin with a system that follows the trend. This is much easier than trying to predict when a change may happen.

Predicting the forex trading market is not easy and it is better avoided. Following the trend is more like riding a wave. All you have to do is sit there until the moment comes to close out and hopefully count your profits.

Risk management is vital in currency trading. It is important to protect yourself from large losses by using a stop loss on every trade, in case it goes against you. Some trades will always turn out bad for unpredictable reasons, even with a forex trading made easy trend following system. When you truly understand that, you will know how to make money with forex.

Want to make money from forex trading? You will need the best system that you can get. Click the link to check out Jason Cline's in-depth reviews of foreign exchange trading systems.

How Article Submission Software Saves You Time, Effort and Money

If you are interested in article marketing, then a sturdy article submission software package is crucial. This kind of software improves your efforts making your article marketing activities more effective.Article marketing has had, and continues to have, a huge bearing on online marketing strategies since their inception. Article marketing has been a dominant force in internet marketing due to the fact that articles can provide quick answers to often asked questions in a very short time, useful information free of charge, and impressive effective link building effects. However, submitting articles to hundreds of directories is not a straight forward task. Article submission can take a great deal of time and effort. Article submission software can solve this issue with its enhanced features.

Why articles stand out in online marketing activities?
There are two sides to an effective article. The advantages the reader or audience receive, and the advantages the writer or author receives. Articles at their best, are an extremely powerful means to learn about specific topics. Articles enable readers to learn about anything in a very short time and will often give an indication to where to search for more detailed information on a specific topic. Articles also help readers to review and rate a variety of products or services and get solid information about specific topics. Additionally, articles promote interaction between the writer and the audience and best of all, they are usually free.

From the writer's perspective, articles are great way of building quality one way back links. They can gain quick and often powerful exposure to the author's websites and products, are a form of free advertising. A well placed article about the right topic can literally be visible to millions of readers and possibly improve sales of the products or services the author is writing about. Any author or marketer gets these benefits free without spending a single penny. This is why articles have become and continue to be an integral part of online marketing.

Issues encountered with article submission..
To have an effective article marketing campaign, articles need to be published on numerous directories available online. But to submit articles to all those directories is a tedious, time consuming and morale sapping job. It takes a lot of time to submit articles to all directories manually. Usually it takes 5-10 minutes to submit an article to a single directory. If you plan to publish 10 articles to a directory it may take from one to two hours! Now imagine the time it would take to submit 10 articles to 100 directories. This can quickly turn into nightmare for you.

Article submission software as the answer..
To solve the above problems, article submission software introduces time saving tools for article marketers. An author or marketer can publish articles to hundreds of directories with article submission software in a very short amount of time. Article submission software will dramatically save you a lot of time. Article submission software allows users to auto fill forms during the article submission process and distribute the article to multiple directories automatically.

Article submission software provides complete automation to submit articles to directories without violating the directory terms of service. With the right kind of article submission software, online marketers can take their business to the next level.

Steve has used and reviewed a number of leading packages. Read his article submitter software review at his website.
By Steven Esian
Published: 6/5/2010

Automated Forex Trading Softwares – Forex Automatic Trading Robots

Automated forex trading softwares provide an effective system that enables the investors to execute profitable marketing strategies. Read on to know more about automated forex trading softwares.The forex currency exchange market is open 24 hours on all business days and it is almost impossible for a person to keep constant tabs on the fluctuating rates. As an alternative, nowadays forex traders use automated forex trading softwares to monitor the forex exchange market. It saves time for the people who invest in the forex market on a part time basis and are occupied with their regular jobs for most of the time. It is also helpful in the prevention of losses without having the investor constantly sit in front of the computer monitor.

Installation of an automated forex trading software ensures crucial trading data in the investor's mail every morning. This saves the time of research from the investor's side and allows him to capture important news and information. The information thus gained can be utilized for determining the trades he would like to execute on. It is also possible to set triggers for specific news events in such software programs. These programs help novice forex traders as well as the experienced ones and enable them to develop a good forex trading system.

The first step for installation is to download the automated forex trading software platform and a forex program. Demo versions of forex automatic trading robots are also available in the market. These demos help the investors to observe and visualize the market trends and do virtual tracking to understand profitable strategies. As the currency exchange market is very risky, it is important to understand it properly before jumping in with a live account. One should start trading only when he finds himself comfortable with the program.

After installation, the forex automatic trading robots use highly developed mathematical algorithms, which enables them to predict the direction in which a currency is likely to head to. The program can configure signals and execute trade automatically if it finds a deal profitable according to the calculations. Manual trading is also possible in case the investor is skeptical about the software's integrity. The automated forex trading softwares keep on scrutinizing the currency exchange market and use the observed statistics with sophisticated mathematical principles. They generate the right signals for trading in the forex market, analyzing all the collected data.

Most of the forex automatic trading robots receive forex signals from trading systems. These signals are then processed with mathematical equations and are primarily responsible for the trading strategy. A trading software is considered to be good if it gives best trading norms to the user and yields good profits. They also give the provision of forex investment without the the hassles of keeping track of the market. The forex investment can be managed by this automated forex software. Investors should always keep in mind that these forex automatic trading robots are perfect and better decisions can be made on the basis of their own experience with the market. If used collectively, such softwares and the investor's experience can surely be helpful for framing an excellent market strategy, reducing the risk involved in the forex market.

The computer security issues should also be considered by users, even if the Internet services provide high security measures. Before carrying out online forex trading with the use of forex automated trading robots, one should scan his computer for viruses. This provides a shield from computer hacking and erases any rogue cookies or browser hijacks. It is also advisable to compare the features and benefits of different automated forex trading softwares, before making the final choice.
By Swapnil Srivastava