27th May 2009
FOREX tutorial for beginners, part 4
Previous in the FOREX tutorial for beginners we looked a bit on bid, asks and spreads. These are important words to the FOREX world.
Now we are going to look a bit on leverage; leverage is to lend, or use credits of the broker. It allows you to spend us$ 1000 to control us$ 100.000. To be able to do this the brokers offer different ways of trading:
The Spot Market: this involves a transaction from one currency to another currency. We do the exchange over two days; where the first day is called the “value date” which is the settlement days where you agree upon the exchange, while the “deal date” is the date you agree to do the exchange.
Other trading that you might be a part of is:
Forward and futures
Options
Contracts for differences
Spread betting
I will not cover all these sections right now; but they will be discussed in the future.
Now that you know a bit about the trading you might be thinking about deciding a platform for your trading; this typically includes deciding on a broker, and software to use. As I talked about previous; you should look at the pips rate, but more importantly you should make a research on the broker.
There are unserious actors as brokers; so make sure you read reviews; but also make sure they are attached to a real bank. You should also make sure they are registered with the Futures Commission Merchant (FCM), and regulated by the Commodity Futures Trading Commission (CFTC).
After you have narrowed down the list of brokers that might be suitable for you, you should request a free trial of their software to make sure they have a tool that is easy for you to use; and providing you with the information necessarily for you to use your preferred strategies. You should also evaluate which option is out there for automated trading while you are away. There might come a time where you want to start using automated tools; and you should have chosen a trading platform suitable for both manual and automated trading. It might be too late to choose a good trading platform at a later stage without having to change broker and software; which is time consuming.
Most brokers also allow you to have a trial account where you can practice making trades without actually risking any money. Trial account and trial software should be one of the most important tools for the beginning FOREX trader.
-Kentaki-
Previous in the FOREX tutorial for beginners we looked a bit on bid, asks and spreads. These are important words to the FOREX world.
Now we are going to look a bit on leverage; leverage is to lend, or use credits of the broker. It allows you to spend us$ 1000 to control us$ 100.000. To be able to do this the brokers offer different ways of trading:
The Spot Market: this involves a transaction from one currency to another currency. We do the exchange over two days; where the first day is called the “value date” which is the settlement days where you agree upon the exchange, while the “deal date” is the date you agree to do the exchange.
Other trading that you might be a part of is:
Forward and futures
Options
Contracts for differences
Spread betting
I will not cover all these sections right now; but they will be discussed in the future.
Now that you know a bit about the trading you might be thinking about deciding a platform for your trading; this typically includes deciding on a broker, and software to use. As I talked about previous; you should look at the pips rate, but more importantly you should make a research on the broker.
There are unserious actors as brokers; so make sure you read reviews; but also make sure they are attached to a real bank. You should also make sure they are registered with the Futures Commission Merchant (FCM), and regulated by the Commodity Futures Trading Commission (CFTC).
After you have narrowed down the list of brokers that might be suitable for you, you should request a free trial of their software to make sure they have a tool that is easy for you to use; and providing you with the information necessarily for you to use your preferred strategies. You should also evaluate which option is out there for automated trading while you are away. There might come a time where you want to start using automated tools; and you should have chosen a trading platform suitable for both manual and automated trading. It might be too late to choose a good trading platform at a later stage without having to change broker and software; which is time consuming.
Most brokers also allow you to have a trial account where you can practice making trades without actually risking any money. Trial account and trial software should be one of the most important tools for the beginning FOREX trader.
-Kentaki-
Posted by Kentaki under 
Forex Tutorial for Beginners 
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