What is Forex trading
Today I’ll be sharing insights on the forex trading market.
I’ll tell you what it is its function in the world at 14 trillion dollars per years the forex moves that amount every four days the forex is a network of thousands,
if you are from the US and travel to Japan to explore the countryside.
You need their local currency to buy things;
you’d go trade your US dollars for again in the forex market the fair e-pricing you can get in the market because it’s near impossible to manipulate is just too big currencies are traded in pairs the Japanese
currency and US currency or traded as a pair represented by US dollar-yen.
If the US dollars moving up in price than the yen is moving down in value by the same amount just thinkof an old skill where you place:
the other side goes up by sell there is no difference by the euro dollar or sell the euro-dollar it’s the same thing there countless factors that can and foreign exchange market do cause price movement.
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For example increasing the supply of money decreases the value of the currency”
because now there’s more money but the same amount of goods and services likewise good news about the future cause speculation about a better economy .
- This could cause price to rise exactly how does the forex market determine a fair price the market operates on the print the pull of supply and demand imagine.
- You want to sell your car if you search around locally you’ll likely find examples of your car with comparable features.
- If the number of people who want your car is greater than the number of cars available price will rise.
If there are more people selling your car than buying your car the price will fall at any given moment in the Forex.
If the volume is greater in favor of the buyers the prices rising if the volume is greater for the seller’s the prices falling.
There are many different types of participants in this market who might use the market for different purposes hedge funds:
for example may have a more complex strategy forex non repsint indicator when they buy a currency.
It may be one part of an overall plan to capture in efficiencies in the marketplace at large multinational corporations may be exchanging large sums of currency for payroll commercial banks might be protecting the value of their assets hedging a drop in one currency value against the rise of another in 2017.
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The platforms for personal computers became stabilized and reliable this open the door to anyone with a personal computer i think that most people are attracted to this new opportunity.
Because it offers freedom and flexibility unlike anything we’ve seen and it has truly unique features.
for example it takes the same skill to make ten dollars a day as it does to make a thousand dollars a day because of this and the fact that you can start trading with as little as three hundred dollars tens of
thousands of people from all walks of life have come to try their hand at forex trading .
The basic proposition is pretty compelling the market can only go two directions up or down.
Since the market can only go two directions you have a 50-50 chance of being correct knowing nothing at all therefore.
If you had some knowledge you could increase your probability of success this is accomplished with another principle human behaviour repetitive.
Because human behavior is repetitive we can observe human behavior and predict with great accuracy what people are likely to do in the future think of traffic patterns.
If you map traffic each day nearest city you would begin to see certain patterns repeat over and over again an obvious one would be how congested things get at rush hour if you continue to watch you would see other patterns to :
for example you notice that big trucks tend to drive in a particular lane.
As buyers by and sellers cell behavior patterns emerge when these patterns form again in the future degree of probability what will happen next.
It’s easy to see patterns that predict price direction 70 80 and even ninety percent of the time now :if you add the concept of money management you can control the size of your wins.
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the size of your losses if I risk one dollar to make two dollars in each trade something interesting happens my pattern of success rate is seventy percent.
But i only need to be right just to thirty-three percent of the time to make a profit now this is where I tell you something. I promise at the start of the video i said i would show you an opportunity that even most forex traders don’t know about you see most traders in the world or focus on exactly.
- What I told you they use the high probability patterns .
- They use good money management and what is their result they fail you’re never going to make money over time trading forex by focusing on information about the market.
- I’ll give you a simple real-life example where i live you can save money by shopping at our grocery store on Saturdays suppliers know that the largest numbers of people are going to be at the store on Saturdays.
So that’s the day they tend to compete for those customers a penny saved is a penny earned they say in other words it doesn’t matter if you make ten thousand dollars a month .
if you spend it all and have nothing to show for:
When you save money you make money now you can make money shopping on Saturday but would you we would find out if we tracked exactly what you did .
I say go shopping and just write down what you do after a few weeks i would then say all right; now let’s review what happened what types of things might we find out we might find out that you did save money on things.
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You bought but did you save money overall did you go shopping hungry one or more times and because you’re hungry did those impulse items offset any savings did you buy things that you might use in the future just because a deal was too good to pass sup.
learn to trade currency: if you are successful saving money you would quickly realize there’s just no way to save money .
- If you don’t have a plan you would realize that as part of that plan you must make some rules about yourself for example you might have a rule to eat something .
- Before you go if you like to stock up on things then you might need a rule that says you can only buy it.
- If it will be used within 90 days now notice how prophet has very little to do with any information about the store and everything to do with the decisions you make ninety-five percent of the traders.
In the world focus on the market a successful trader focuses on their plan we already know that you can save money by shopping on Saturdays that’s not the problem is what you do when you get there.
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If you’re interested in trading my advice is to learn all about trading before you get involved whatever you do don’t do what everyone else is doing one of my teachers used to say if you want to be successful go the other way.
it’s really good advice if you’d like to learn more about trading.
You can download my free ebook eight things they don’t tell you about forex trading it will explain many of the common mistakes that traders make over and over and how easily you can avoid making the same mistakes yourself.