What are Forex scams?
There are more Forex scams
nowadays than hair on your head specially if you are bold, There are
scams of many types from brokers and their affiliates to reviewers
with affiliates, there are Forex products and software that amounts
to nothing yet sold for thousands of dollars, If you need a broker
use only brokers from USA who have branches in UK and the rest of
the world, Do not use a broker located at xxxx island who allows you
to open account with $1.00 !
Is automated trading any good?
MT4 allows automated trading and
has great support for this feature, however, I personally tested
over 100 free Expert advisors and few expensive ones I bought and
got poor results, and in many occasions I had entire accounts wiped
out over night. so how in the world I would allow automated trading
on live account. In addition, when you put one of these expensive
robots on a live account you will be tired of activation messages
and copy protection procedures incorporated to these robots. Further
more, You wait a long time between trades and if you are a short
term Forex trader you will not have the patience to wait for your
robot to trade, you will feel sometimes it will never trade, and
when it does, it never give you the satisfaction you get with manual
trading.
Are Forex reviews truthful?
Absolutely not, Just pay attention
to the links on their page, click on one and see where you will be
taken, Reviews are there to get targeted traffic from search engines
and redirect via affiliate links to websites that will give revenue
share to reviewers who write biased reviews about Forex brokers,
products, and services, and they will never help you in anyway but
make the wrong purchasing decisions.
What is hedging?
Hedging in Forex is to have both sell and buy open positions for the
same currency on the same account, It minimizes exposure to the
market and eliminates risk unless spreads are widened. If an account
does not allow hedging then each sell order will offset an existing
buy order and so is the other way around, but when hedging enabled
each buy or sell is entered and tracked individually, and because
hedged trades require no margin by legitimate brokers it is popular
specially among those traders who learned how to handle it. On May
2009, The US NFA released rule that prohibits hedging on all US
based Forex accounts even if MT4 is used, this rule resulted in
migration of thousands of accounts to the UK.
What is spread?
Spread is the difference between
the bid and ask prices in Forex trading which ranges from 1 pip to
10 pips depending on broker, currency, and time of day or market
conditions. When you buy currency you pay the higher price which is
the Ask price, and when you sell a currency you sell at the lower
price which is the bid price. the difference between these 2 prices
is called the spread and goes to the broker as trading commission.
What is a trailing stop?
Trailing stop is a great way to
protect your profits once your trade is profiting, once you you
assign a trailing stop to a trade you need to to select how many
pips your trailing stop should be away from the market price, so if
you select 15 pips as a value, your trailing stop will slide
following the market price but keeping a 15 pip constant distance
from the market price, this goes on as long as the market moves your
way, but when the market reverses, trailing stop will stand still
and if the market moves against you for more than the 15 pips you
have assigned to your trailing stop, the trailing stop will then be
triggered and your trade should be closed profitable. You must know
that Trailing stop works in the platform and not the server as the
case with ordinary stop or limit, so your computer and connection
must be both up for this to work.
What is a pip?
A pip is 1 hundredth of a cent, A
US cent equals 100 pips, when you say I made 10 pips or 50 pips in
profit or loss a Forex aware person hearing you will immediately
calculate your profit or loss based on the amount of money you
invested.
What is a Candlestick?
A candlestick represent one bar of candlestick chart and it can have
two colors but many forms, It gives you at a glance the open, close,
high and the low price for the time frame, one bar can represent 1
minute, 5 minutes, 15 minutes, 30 minutes, 1 hour, 4 hour, 1 day, 1
week, 1 month, or even one year. A sequence of consecutive
candlesticks and the gaps between each two compose the chart.
What is Forex lot?
A Forex lot refers to an amount of
purchasing order, depending on account type, in a mini account there
is a mini lot which is $10,000 or 10,000 of another currency, In a
standard account, standard lot is used which is $100,000, and in a
micro account a micro lot of $1000 can be used.
What is margin and free margin?
Once you made an order in your account, your deposit will be divided
to two separate parts, Part one: Margin, which is the amount of your
funds laid out for your open order, and Part two: Free margin which
is the remaining amount of your funds that can still be used for
additional orders, and at the same time is the funds in your account
available to protect you from position liquidation in case you
sustain a loss, via a process called margin call. Once an open
position loss becomes greater than your free margin, it will be
automatically liquidated, and the margin that laid out for the
position will be returned to your account minus any possible
slippage. Margin can be referred as USED margin, while free margin
can be referred to as usable margin. Margin policies differ from one
broker to another, For example some brokers will not liquidate your
positions until you loss eats up both your free margin and used
margin, which results in losing entire account all the way to
negative balance sometimes. Also when hedging is used, Some brokers
will return used margin to your account when you have opposite
trades of the same size on the same currency pair, because opposite
trades support each other. while other brokers will keep the margin
tucked away even when hedging.
What is widening spread?
There are two types of spreads with most brokers, fixed and
variable, If you choose fixed at account signup, then you do not
have to worry about widening spreads, but if you are on variable
spread account, you need to try to open and close your orders at
times when the spread is lowest, and because widening spreads affect
all open position even when hedging, you need to worry about your
free margin not getting consumed by widening spreads. Certain
brokers widen their spreads at news times and when the market open
or close to ridiculously unbelievable levels and force you to close
positions and lose money. be very careful when selecting a broker
and contact me if you need help.
What is Forex leverage?
If you were to trade Forex with just the money you deposited in your
account, your profits or losses would amount to dimes and nickels.
Forex trading is done with high leverages which acts as amplifier to
both profits and losses. Recommended leverage to use when opening
account is 1:100, which means that you can borrow 100 times as much
money as you have funded. Brokers, are providing you with this for
the sole purpose of making larger commissions from your orders,
since the larger your order size, the larger the commission will
become. In your account your actual leverage is not the default
1:100, but depends on the size of your open positions, for example,
if you have $10 k in the account and took a $100 k position in the
market, your true leverage will be 1:10 because your order is 10
times bigger than your funds, and you should think of it as $100,000
investment, not the $1000 that is temporarily deducted from your
account for opening the position.
What is account summary?
Please visit my MT4 basic learning
page !
How much money can I make in
Forex?
The amount of money you can make in Forex depends on the following
and more factors, initial size of account, trading strategy,
integrity of your broker, allocated time for trading, your self
discipline and luck.
How much money can I lose in Forex?
If in losing zone, on a good brokerage firm, you can lose part of
your funds that not laid out for open positions, and when new
smaller positions opened, you can again lose unused portion of your
account, this process can continue on until you become no longer
able to open smallest available contract depending on your margin
requirements and type of account, meanwhile with some other brokers
you can lose entire account all the way to negative balance in one
step. with most brokers you are not required to pay negative
balance.
What is expert advisor?
Please see
automated trading answer above !
Is there a guaranteed way to make
money in Forex?
There is no guaranteed way to win
in Forex market, because there is unpredictable trends and market
volatility.
What is news trading?
News release make currency prices
jump or drop to new territories so many trades take bigger risks for
bigger rewards at news time, large institutions can afford to send
representatives to give first word on major release and then they
can act correctly or incorrectly with their Forex accounts making
long bullish or bearish candle sticks while after news traders will
take a ride up or down to reverse the direction and benefit from the
move back. for the average traders, News are history.
What are the best trading
platforms?
I do not like to provide this
information publicly, if you would like an answer please
contact by email
What are the best Forex brokers?
I do not like to provide this
information publicly, if you would like an answer please
contact by email, you may also
contact me by email to ask any question on the Forex subject.
What is the recommended size
for Forex account?
There is a big discussion of this important matter in my Forexbody
System Wizard !
