A Managed Forex Account

These are forex accounts that are not traded by you, but by a money manager on your behalf.  This is a similar situation to employing an investment advisor to trade equities and bonds on your behalf.  It is suitable for use if you do not have sufficient knowledge or time to trade yourself.  Many traders do not want to learn the often complex and intricate mechanisms of this large financial market.  Individuals who prefer having a professional manage their funds would prefer this type of account.

The Advantages of a Managed Forex Account

One of the most important advantages of a managed forex account is that your money is held by your broker and not by your manager.  This gives the money manager the responsibility to do the trades for you, but he or she will not have the authority to withdraw money from your account.

The other advantages linked to this type of account are:

• Large brokerages offer you extensive experience in this market which you have access to.  Your money manager will inspect your portfolio on a regular basis and diversify your investments if necessary.

• You do not need to have experience in the forex market as your manager will be doing your trades.  This provides you with a knowledge base based on practical experience which is to your advantage.

• You will normally receive a daily report on all the positions you currently hold.

• The possibility of showing profits irrespective of the state of the market is increased by using this type of account.

• Through your money manager, you will have access to the market 24 hours of every day.  If you choose to trade personally, there is always the possibility that you may miss out on a profitable trade because you were not online at the time.

Disadvantages of a Managed Forex Account

Since you are not personally managing your account, you may face several risks.  The risk of being scammed is high as you may have chosen to use an untrustworthy broker.  You may be assigned a money manager who is incompetent and this could cause you to lose funds.

Scammers should be quite easy to recognize as they will constantly request deposits from you.  Their main aim is to get as much money out of you as possible.  To avoid this risk, obtain details from your broker as to the manner in which your account will be managed.

Check if you have been assigned a normal account as the account will then be a personal one and in your name.  This means that all the funding you put in will go to the broker.  If you are assigned to a pooled account, your funds are normally sent directly to the money manager who is responsible for pooling funds received from various clients into an account that he or she controls.

One of the scariest aspects of a managed forex account is that you could lose all your money through incompetence.  To avoid this, you should ensure that you read and understand your contract before you sign on the bottom line.  You must be aware of who will be handling your account and the methods they intend using.

By: Djelloul On 4:29 AM

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A Beginners Guide To Trade Currencies Like A Professional

With many people over the last few years having money just sitting in the bank earning next to nothing due to the very lower interest rates that the banks now offer, some have taken up trading on the currency markets. Once only the home of the big investors and governments, people can now get involved themselves for as little as $50 with some brokers. Now that amount is not something that is going to make you rich, but you need to start low and work your way up. Making money from trading the Forex markets can be as difficult as you make it.

When you do some research into trading on the Forex markets you have probably come across numerous pictures that show the currency pair moving up and down, and then it is probably covered in lines, and underneath is a number of graphs. Well unless you understand all of them and how they work, switch them off. Do not fill your trading screen up with all kinds just to try and make it look good. The best advice a professional trader will give a beginner is to setup the screen to show one currency pair that is trending, shown in candlestick mode, with nothing else on the trading screen.

This means that you are setup to just watch the way the currency pair behaves, and this will give you a feel for the way the markets move. If you are a beginner, then you should not be looking to be doing any scalping (very short term trades), so your timeline should be at least 1 hour, but preferably 4. This is to teach you to be patient, if you are watching shorter timelines and a market looks like it is going against you, then you are likely to bail out at a loss. Whereas people who have patience will have no interest when the market turns against them, as when they look at the screen after an hour it has recovered in their favor.

You may have to spend a long time staring at the market, but once you have entered a trade, walk away and do something else. You have either set a stop loss as a value, or you may time your trades, and bail out after a set time. It is recommend you use a set value though.

Some people prefer to set a trade and leave it for a day before they decide to take action on it, and if you really want to go for the long term then you would be looking at being in the marker for weeks. If you do that and get it right then it can really pay off big time. Whatever timeline you decide to start with though, stick with it, if you keep changing it then you will not get the feel for any of them. When you see a professional trader on TV, you will not see them flicking through various screens and constantly changing settings.

By: Djelloul On 4:25 AM

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Why Forex Is The Best Market For New Traders

It is my belief that Forex is hands down the best market for new traders. When everyone thinks about trading, they automatically think about the Stock exchange. What they don't understand is that it cost a lot of money to actively day trade the stock market. By law, the SEC, requires a large minimum balance for day traders. In this article, I will give you several examples why new traders will find it easier to trade the Forex market as day traders and as other short time frame based currency traders in this market.

There are some inherent advantage to Forex. The first benefit is that you can fund an account with a broker with as little as $5 and as much as a million. Forex makes it so that any trader, no matter their account size has an opportunity to trade. Another advantage of Forex is the fact that you have a lot of leverage you can use, you can use up to 1:400 leverage with some Forex brokers. Leverage is the same as buying with margin. Stock brokerage accounts do not provide this amount of leverage. All short term traders need high leverage to make the most out of their small incremental wins.

More opportunities to trade equals more money that can be made. The stock market opens at around 8 in the morning and closes before 5 pm, that is a short window to trade and makes it so that anyone with a day job can't trade. Forex doesn't have this problems. Forex is a 24 hours market that you can trade anytime of day. It is a global market with participants from all around the globe trading  at every hour of the day, it never closes. You can trade before work and after work.

Open crossover is another reason why Forex is so great. Although, the Forex market is open 24 hours, it does have several opens. An open is when a countries banks start trading. For example, London's open is at 3 am EST and the US open is at 9 am EST. There are also opens for the Asian countries too. What this means that their is a ton of liquidity being pumped into the market through out the day. When these trading periods cross over you have a ton of people moving the market. For day traders and scalpers this is a goldmine.

As you can see, Forex is the best market for a new trader to trade. They will find greater success in Forex than in any market. It is also easier to open an account and get high leverage in Forex. One of the great benefits of Forex is that it is a 24 hour market that you can trade day or night. A new trader can go to work in the day and come home and trade during his or her leisure time. It is a market that gives the trader the advantage.

By: Djelloul On 4:22 AM

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Why Use A Foreign Exchange Calendar?

Foreign exchange trading is more often than not based on assumptions determined by a volume of data.  It is possible to predict the future by the use of historical forex information, however, care should be taken when this is done.  The volatility of this financial market makes it difficult to predict the future.  You should consider using a foreign exchange calendar to provide you with an edge when you predict trends.

Events

One of the economic events that is currently affecting forex rates is the rate of unemployment.  News releases on this and other economic factors that affect financial markets are constantly being made available.  Some of the other events that you should be aware of for effective trading are non-farm payrolls, interest rates and consumer price indices.

Be Aware When Trading

Your trading method is an important factor, but it is also important that you keep up to date with current events and future events that will have an effect on your trading options.  If you are not aware of the latest economic trends, you may be unaware of adjustments that may be necessary to improve your strategy.  The use of technical analysis methods is highly dependent upon the current trends and global events.

Although you may be making consistent profits with your current strategy, if you ignore potential risky events, you could be putting your money at risk.  The use of a calendar will allow you the opportunity to access readily available information which you can prepare for.  This will help you avoid any sudden changes that could potentially turn the tide against you.

The calendar is used to keep up to date about major announcements released by different countries across the globe.  If you are aware that an announcement is pending, it is best not to trade.  The best method is to abstain from trading for at least two or three hours before you expect an economic data release for your trading currency pairs.  For example, if you are trading GBP/USD and you are aware of an impending event such as interest rate announcements, you should refrain from trading before it is released.  This will aid you in avoiding the major slides that often take place when the announcement is finally released.

Currencies generally experience a huge swing just before these major announcements.  Once the market settles down, the trend will be reversed.  You do not want to get caught up in these fake signals as it might cause panic.  It is advisable to check the signals once the market has had time to settle which should be about half an hour after the event.

When you use a foreign exchange calendar, you will be able to mark the events that you feel are relevant to your trading pattern.  You will have the opportunity to highlight the main announcements linked to your trading pairs.  Many of the websites where you are able to access the calendar have tutorials on how to effectively use the calendar.  They also indicate when you should make your trades and explain how the economic announcements may affect your trades.

By: Djelloul On 3:45 AM

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