The foreign exchange markets are situated all around the world. Currency trading is a global activity. Every country in the world uses money and needs to change that money into other currencies in order to trade or interact with other nations.Currency exchange happens at every level of society. As an individual, you may have changed money when traveling on business or on vacaation. Or maybe you have sold something on eBay to somebody in another country. Their payment comes in to your account in their own currency, and the bank or other payment processor such as PayPal changes it for you. That is currency exchange at the root level.
Foreign exchange or forex trading has a different purpose, however. When you are trading on the foreign exchange markets you are not buying another currency because you need it. You are buying it in the hope that it will rise in value, so you can change it back and end up with more money than you started out with. Of course, it is risky. The price movement could go against you and then you would end up with less money instead of more. So you will want to gather plenty of information about currency trading before you start.

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Forex trading began in the 1970s when the major currencies were deregulated so that their values were no longer fixed. The banks and large investors quickly saw the potential for making money from the changing prices.The main forex marketplaces are the big financial centers of the world. London sees the highest activity with New York second and Tokyo third. Other major players are Sydney, Zurich and Frankfurt.

Originally you had to be in one of those places to trade money, or at least have a telephone connection with a broker who was there. It was very difficult for somebody who was not on the spot to act fast enough to react to the sudden fluctuations in price that can happen in the forex markets.

But modern advances in technology have changed all of that. Since the rise of the internet it has been possible to trade on your own account from anywhere. This means that it has become easier and easier for the little guy to get a piece of the action. While some people never think about foreign currency from one overseas trip to the next, others are studying charts and financial information or even using automated software.

The Metatrader 4 expert advisor range is the most popular range of forex autopilot software. There is a wide choice of expert advisors designed to run on this free downloadable platform or framework that sets a structure for EAs to be built on. Whichever expert advisor (EA) you choose will act as a robot on the forex market, trading for you according to the boundaries that you set.

Clearly this has many advantages over making all of the moves in a trade yourself. The EA does not need breaks for eating, sleeping and human contact. Neither does it suffer from human weaknesses such as fear and over optimism which can distract us from our systems and lead us to exit a trade too soon or not soon enough. Once you have set it up it will obey your system to the letter all the time that it is online.

An EA will often protect your interests when you could not do it yourself. The opportunity to set a trailing stop is one example. A trailing stop automatically moves up with rising prices but stays in place if the market falls. This means that on a successful trade it protects a part of your profits without exiting too soon. On an unsuccessful trade it protects you from heavy losses just as a standard stop would do.

Some of the functions of an expert advisor depend on having it constantly connected to the internet. This because MT4 and the EA run on your own computer or server, not on your broker’s servers. For example if you have set a trailing stop, MT4 sends a message to your broker account to move the stop each time and it has to be connected to the internet to do that.

This means that to make the most of the potential of a Metatrader 4 expert advisor on a home computer you have to leave your computer online 24 hours Sunday night thru Friday unless you happen to have exited all of your trades before you stop work on any particular day.

Any break in the connection will mean that no more messages are sent to your brokerage so the trailing stop will be left where it was last set. It will still protect you from a large loss but it will not move up any more so you will have lost some of the advantage of having a system that works while you sleep.

However, some EAs can be hosted remotely. This means that you can set them up on an internet server instead of your own computer. This could be your own or a facility offered by the EA company. They may offer this option as an upgrade after you order their Metatrader 4 expert advisor.

One of the most important things you can learn in any forex trading education is how to keep to your chosen system or systems in a consistent way.

Hopping from one thing to another will kill any chance you have of making profits, but we are all tempted from time to time. If you find it hard to keep to one trading system, here are some techniques that may help you to learn to be consistent.

1. Consider carefully before you decide to follow any system. One successful businessman has said that the secret of his success was thorough research before a decision, and then sticking to it like iron. You need to be sure that your system is profitable … not necessarily the very best. And you need to be comfortable with all the actions that it will require you to take, whether things are going well or badly.

2. If you have problems with self discipline in other areas of your life, use those to train yourself in the skill before you start live trading. Do not pick the thing that you have most trouble with, but something that you could fairly easily master. It might be getting up at the same time every day.

3. Allow yourself a small ‘fun’ budget or have a separate mini account for trades that look so tempting that you cannot pass them up even though they do not fit your criteria. You will almost certainly lose this money over a period of time, so be sure you can afford it. If not, avoid the temptation and track these trades on paper instead or use a demo account. Be sure to track them all because we have a tendency to remember the few that would have profited us and forget the majority that would have lost.

4. Do not discuss your trades or your system with anybody else. It is fine to ask around on forums before you have decided on your system, but do not be drawn into debate about the merits of a system after you start using it. You will quickly be swamped by negativity from people who want to believe that their own system is better. Equally, do not discuss it with non trading friends or family members. They will often be negative simply because they do not understand.

5. Do not drink alcohol while you are trading. In fact, it is better not to even look at the markets when you have had a few beers. If you see a tempting trade that breaks your normal rules it will be much harder to resist when you are under the influence of alcohol.

So even though we all love the idea of working from home in our pajamas with a beer at one elbow and the cookie jar at the other, reality is that relaxing to this extent does not combine with successful forex trading. A mind that is even slightly fuzzed by alcohol will not be able to keep to a consistent trading plan.

An automated forex robot can help you out here. You can set it up to trade automatically for you, if you are not yet able to act consistently while you pursue your forex trading education.

Your first foreign exchange tutorial will cover the basics of what you need to do to get started with forex trading. The aim, of course, is to have you making money by predicting the rise and fall of one currency against another and opening and closing your trades at the right moment.

It takes time to learn to be a successful forex trader but you can cut corners if you have a good introductory program that covers everything you need to know. This includes:
- understanding the principles of currency trading including managing your account, trading margins, and allowing for the cost of the spread
- technical analysis: discovering how to recognize trends in the markets, the different types of charts and how to interpret them so that you can profit from market movements
- fundamental analysis: understanding what to do in the face of major national or international economic events that are likely to impact on currency values.
- finding out how to minimize your risk and protect your trades with stops
- developing the power to apply your system without allowing losses or emotions such as fear to throw you off balance and affect your chances of earning long term profits

A good place to pick up hints and tips can be a forex trading online forum. There are many of these on the internet and members will comment about all kinds of issues relating to the market and their own trading. This can be a great place to go if you have questions.

However, forums have some drawbacks. One is that the advice you get may be very contradictory. There is more than one way to trade forex profitably and it can be confusing to be receiving advice from several different people, each with their own approach. It is usually better to stick to your own system.

The other problem with taking advice on forums is that you do not usually know anything about the people who are posting. Somebody could sound very knowledgeable and then it turns out they have only ever used a demo account and never made a real trade in their lives. Some people spend more time hanging out in forums than trading. Just because somebody is very active in a forum does not mean he or she is an expert.

So do not rely on forums, free guides or untested theories for your trading system. When you are starting out in forex trading you need a solid grounding in the basics and a system that is easy to follow and actually works. As with most things in life you usually have to pay for the best. So look for a foreign exchange tutorial that is part of a profitable forex system.

Forex, foreign exchange and fx trading are all different names for currency trading, where one currency is exchanged for another in the hope of making money when the exchange rates change. These rates are constantly changing due to market news, national events or a knock on effect from changes in the stock exchange.

At the most basic level, imagine you exchanged some US dollars for British pounds. You might give $100 to buy £65. Then the rate changes in your favor so you exchange them back again. Now with the new rate you get $102 for your £65. You just made $2 or 2% of your investment.

Currency traders do this kind of thing all of the time with the aim of increasing their funds through many small trades. They trade on margins so that they can control larger amounts with only a small investment. In the above example, you might only have to hold $10 in your brokerage account to make the purchase even though the amount is $100. The broker covers the rest on the assumption that the market is unlikely to change by more than 10% in a short time.

Forex trading has been around for over 30 years but until the rise of the internet it was almost entirely in the hands of banks and other institutions with large investment funds. These days ordinary people can get involved on their home computers although the financial institutions are still the major players. When I tell you that around US $4 trillion changes hands every day on the currency trading markets you will understand that only a small part of this belongs to ordinary people like you and me.

Foreign exchange is a worldwide market and because of the different time zones around the world you can trade almost any time. Sydney, Australia is the first currency exchange market to open each day, and by the end of the business day in New York the Sydney market is open again for the next day’s trading. So for 5 days per week this is truly a 24 hour market. It only closes on weekends.

You are not limited to dealing in your own country’s currency so if your national economy is in a very unpredictable state you can switch to trading two other currencies that are a little more stable. While it is true that a volatile situation with big fluctuations can give you big profits in a short time, it is extremely risky to get involved in a currency that is experiencing a crisis.

These days brokers are going all out to attract the new type of home investor who does not have a lot of capital, so you can get started with just a few hundred dollars. They will provide you with software that allows you to make trades on your account, and real time market information including charts to show you the direction of movement of the different currency pairs.

With so much money changing hands every day, foreign exchange is a high liquidity market. This means that your capital will not be tied up for the long term as it might be if you bought certain kinds of stocks.

Apart from some funds to invest, the main things that you need to get started with currency trading are good money management skills, self discipline, a profitable system to follow and perhaps a forex robot to apply your system for you. When you have these in place, currency trading can be fun and quite profitable.

It seems to me that we need a little zen in the jungle of forex currency online trading. We especially need it when it comes to one particular skill. It is a skill that is absolutely vital to successful forex trading and yet people do not talk about it very much.

The reason for this is that it is something that most of us do not really like to hear about. Just the name puts us off. We associate it with dark cold schoolrooms from 100 years ago.

I will tell you what it is if you promise not to stop reading. Do we have a deal? You will read to the end of this article and I will disclose the secret word to you.

OK … it’s discipline. Or more accurately, self discipline. Now, as I said we tend to associate those words with old fashioned educational styles and even punishment. But that is not what it is about.

One dictionary definition of discipline is: behavior according to established rules. Applying this to the forex markets, it means trading according to an established system, and not deviating from that system.

In fact, if we want to get around the negative associations of the word, we could describe it instead as being consistent … acting consistently in accordance with the system that you have selected.

The opposite of self discipline is self indulgence: giving in to every desire without thought for the future. Translated into trading terms, this means acting on your whims … trading on impulse and on ‘feelings’. When you do this, you are leaving your profits in the hands of pure chance.

In order to be successful at most things in life, you need to act consistently and it is not always easy. Self discipline requires saying no to an immediate temptation for the sake of longer term success or happiness. If we are to reach our goals, future consequences must be more important to us than current satisfaction.

In everyday life terms, this means turning down dessert because you do not want to gain weight, or passing on the illegal parking spot because you do not want your car to be towed.

In forex currency online trading, it means accepting a loss without losing faith in your system.

It means looking for a reasonable profit in the long term instead of taking huge risks because you want to get rich overnight.

It means not giving into the fears that hold you back from making a larger trade when you know it is the right thing to do.

It means doing your research instead of believing that the latest great technique is going to work for you just because you want it to.

In short, it means seeing that the emotions which can feel overwhelming at times are not really so important. Strong emotion, whether it is fear, anger, greed or desire for pleasure, almost always relates to a short term wish, not a long term plan. We need to get beyond this to be successful.

Our lives do not have to be ruled by emotion. In fact the bottom line is that if you allow yourself to be constantly diverted by passing feelings like a sail boat in a hurricane, you will find it hard to earn a living in the forex market until you learn to see your fears and desires for what they are: just feelings that will pass, no more important than the itch of a flea bite.

But if you have trouble with this, do not worry. Help is at hand. Try an automated forex system. They are as emotionless as Spock and will do all of your forex currency online trading for you with the discipline of a robot.

The forex trailing stop is a stop that you can set in an expert advisor on the Metatrader 4 platform. It is pretty much what you might guess from the name: a stop loss that moves according to the current prices on the forex market. And a stop loss, of course, is a marker you set that will cause your MT4 expert advisor autopilot software (EA) to exit the trade when it goes against you to prevent you having any risk of a large loss.

But there are several things to be taken into account when you consider how to use the trailing stop. It is a little like a ratchet in that it can move up but not down. When you move into profit, it follows behind, moving up by the same number of pips that the market moved. But if the market falls, it stays where it is. So the market can rise and rise and you go on making more profit, but when it falls just a little way, the stop loss comes into effect and exits your trade with whatever profit or loss you made up until that point.

To give an example, you open a trade to go long. Of course at the moment of opening you are at point zero: 0 pips profit or loss. Let’s say you set your trailing stop at minus 30 pips. If you are unlucky and the forex market just falls and falls, the stop loss will kick in and close the trade for you at 30 pips down. But if the market rises, the stop loss will rise with it.

So when the market is 20 pips in your favor, your stop will have moved to 30 pips below that. If the market then falls and the price hits the stop, the EA would get you out with a loss of just 10 pips.

If the market rises to 40, the stop moves up to 10 above zero. You then have a guaranteed profit of 10 pips. In fact as soon as the market rises by the same number of pips as your trailing stop (in this case 30) you cannot lose.

Sure you could monitor the markets and operate this strategy yourself, but there is a risk of you failing to make your exit at the right moment and taking a greater loss than you planned, or having to exit a trade while the market is still rising because you have to sleep or whatever. So as long as you can leave MT4 running, an EA on autopilot relieves a lot of the pressure that would otherwise be on you in this situation.

The volatility of the market is the main factor in deciding where to set the trailing stop. You do not want to take a heavy loss but at the same time you do not want to have the stop triggered by random fluctuations in the market. A forex trailing stop that is too close to the starting price will be triggered so often that you could end up making constant small losses.

Forex real time news trading is a way of making money on the forex market from international events and upcoming current affairs stories.

Predicting the way that these events will go and their effect on the currency markets can appear to be very profitable, at least in theory. The problem is that in practice things do not often go the way that you might expect.

The truth is that when it comes to financial news, the major international banks pretty much always make sure that they are the first to hear. When an expected report is released they

will have people right there. The trade-from-home little guy, on the other hand, has to wait a few crucial minutes for the report to appear on the TV news or the internet. Even seconds can make a difference.

At times like this the markets will change so swiftly that you cannot really hope to jump in and make money. The banks will dominate the markets and although you may sometimes be lucky, you could easily be wiped out if the news goes against you.

In practice if you do want to trade on the outcome of an upcoming event such as an election or a financial report, you are more likely to try it by opening a trade before the announcement. You might have a strong belief that it will go one way or the other. However, you cannot really know for sure. When you think about it, opening a trade at this time is really nothing more than betting on the outcome.

It is at times like this that we tend to be easily carried away by our own ideas, hopes and emotions. It is can be very difficult to make a rational assessment of a situation where so much can ride on the outcome. Therefore, unless you are really in the thick of the financial news centers, it is probably best to avoid this kind of trading. A system that makes steady profits over a period of time is the best way for most small traders to operate.

Of course you must still keep one eye on the news while you are actively trading, but instead of aiming to make money from current and upcoming events, you are more likely to want to close out on your trades before certain reports are released. Critical times include the opening of the stock exchange in the countries whose currencies you are involved with, and announcements of interest rate changes in those countries. In addition, the USA is such a major player in the forex markets that events in the USA can affect all currency pairs, even if you are not trading the US dollar. You will probably want to avoid being caught with an open trade at all of these times.

For this reason, most traders who operate a sound forex trading system will avoid trading altogether in the extremely uncertain times preceding a major announcement or release of forex real time news.

One essential that you must have when beginning currency exchange trading is an account with a forex trading broker. The broker is your link into the markets and will cover you to trade margins.

But how do you go about selecting a good one? Here are 5 points to take into account when you are shopping around for forex brokerage accounts.

1. Reliability :  This operates on several levels. Firstly, of course, you want a broker that you can trust, who will not suddenly disappear from the internet along with all of your money. The forex market is broadly speaking unregulated, so there are a huge number of brokers and some are more trustworthy than others.

Your first step is to check that the broker is regulated. In the USA this means that you want a broker who is registered with the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). Look for a forex broker with a clean record in any complaints logged against them on the NFA site. Other countries have their own regulatory bodies.

Then you need to think about whether the broker’s platform is reliable. This is their software that you will connect with whenever you want to trade. If it is often offline, it is likely to cause problems for you. You could miss out on either opening or closing a trade at the best time. Check forex trading forums for feedback from users on this point, although be careful not to be swayed either way by a single individual who may have his own reasons for being strongly for or against a particular broker.

2. Services :  The forex markets are open 24 hours from Sunday night to Friday afternoon EST. Check that your broker’s trading platform is available all of this time (most are) and that they offer 24 hour customer support on trading days too.

Check that they cover at least the seven major currencies USD, AUD, CAD, GBP, EUR, CHF, JPY. Again most will, but it is worth being sure.

A broker should offer you charts, technical analysis, and instant execution of your orders at the displayed price.

3. Costs : Forex brokers do not charge commission but make their money from the spread, which is the difference between the buy and sell prices on any currency pair. Spread can be anything from 1 pip or less, up to about 3 pips, depending on the broker and the pair.

The size of the slice taken by the spread can make the difference between profit and loss in your trading account in the long term so look closely at this. If you know which pairs you are likely to trade most often, the spread on those pairs will be more important to you than others. At the same time, do not be drawn in by a special offer that may not last long once you have committed your funds.

You also need to consider how much is the minimum that you can invest. Most new traders are best advised to start small, so look for a broker who will let you open an account with $250 or less.

4. Margins : Margin requirements can vary a great deal from broker to broker. A lower margin requirement means higher leverage, and higher leverage gives you greater profits or losses on the same fund size. So low margins seem great when you are doing well, but losses will be bigger if things go badly.

5. Lot size : Lot size can vary from one broker to another. Generally 100,000 units of currency is a standard lot, 10,000 is a mini lot, and 1,000 is a micro lot. Some brokers offer fractional lots which give you more power to set your own lot size. This could be a bonus or just an added complication.

There are other considerations including the interest paid on your margin account, rollover charges and other policies. However, these are the main points that you should be looking out for when choosing a forex trading broker.