Why Forex is the Investment You Want to Start With

If you have a bit of money lying around, you should seriously consider investing it. Leaving money in your bank account is not a good idea: it won’t be long before you will end up spending all of it. Rather than leave the money lying around, investing it is a great way to increase your income gradually. However, most people don’t really know much about the different investment opportunities available to them. If you want to get some seriously good returns and wish to save money on the side, forex investment may be the best option for you. There are many reasons why you should consider investing your money in the foreign exchange market. Here are a few:

High Liquidity

Most individuals are often scared when investing their money. They want maximum returns, but don’t wish to lose control of their money. If you are investing the money in a term deposit, you won’t be able to get it back until the date it hits maturity. However, making an investment in the forex market gives you great returns, as you can easily withdraw the money whenever you want. The biggest reason why so many people still invest in the forex market is because of the high liquidity. Not satisfied with the returns? Just call your broker and close your account. You can withdraw the money in to your bank account on the same day.

Trade Without Leaving Your Job

There are plenty of different ways by which you can trade on the forex market. You can trade through an app in your web browser, or you can download a forex trading client directly on your mobile phone. Another major reason why you should start with making a forex investment is because it is so easy to trade. There are a plethora of different options available for you to choose from, and you can easily make a side income while on your job.

Easy to Learn

You don’t need to learn complex algorithms or trading mechanisms in order to make a profit on the forex market. It is by far one of the easiest markets to learn. All you need to know is the difference between two currency rates in order to make a profit. If you buy a currency pair that increases in value, you will generate a profit!

The Market Remains Open Round The Clock

Another major reason why you should consider investing in the forex market is because the market remains open round the clock. You can trade on the market whenever you have free time! It is a great option for people who are free in the night and wish to make some money. Forex investment allows you to make money while lying on your bed!

High Returns

If you are investing your money in something, you are obviously looking for high returns. Forex investment allows you to earn some seriously high returns in case the currency values fluctuate in your favor. It is a fantastic way to generate some money on the side!

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How Do Forex Islamic Accounts Work?

If you are a Muslim and wish to trade on the Forex market, there are plenty of options available to you. Most practicing Muslims often try to avoid the Forex market due to the interest rates. However, many brokers that deal in Forex accounts and binary options have begun to provide their customers with the option of opening Islamic accounts. In order to understand how Islamic forex accounts work, you need to develop a sound understanding of the Sharia law, which is the law followed by most practicing Muslims.

The Sharia law provides detailed guidance about different parts of life, and has a whole section pertaining to banking and finance. According to the teachings of the law, a Muslim is prohibited from accepting interest or any loan fee in monetary or other form, whether the payment is floating or a fixed amount. In Islam, this is known as riba or usury.

As of today, there are more than 1.6 billion Muslims in the world. By 2009, more than 300 banks and 250 mutual funds across the globe were using the Sharia law. Just last year, that figure rose to represent around 1% of the total world assets, equaling an amount of just around $2 trillion in funds. It is important to note that not every Muslim practices Sharia law firmly. According to Ernst and Young, only a small percentage of Muslims follow the law. However, Islamic banking has grown considerably in the past few years (at a rate of 17.6% annually between 2009 and 2013). If projections are to be believed, Islamic banking will grow at an accelerated rate of around 19.7% per year until 2018.

Now, under standard trading conditions, all currency trades are executed within 24 hours in the spot market. At 5:00 PM New York Time, all positions that are left open are rolled over to the next 24 hours. Daily interest is calculated and added to the company’s accounts every day. The brokerage firm has the option to pay the interest or charge it on the client’s account. This is often added to your account as a “rollover fee.”

There are plenty of traders who hold positions overnight. As a result, rollover fees can have a huge impact on their final account balance. However, things are different in Islamic accounts. For starters, no interest is charged for as long as the Islamic account remains open. But then, this poses a problem for any open trades that are rolled over at the end of the day. This would be known as usury in the Islamic world, which is why conventional rollovers are strictly prohibited in Islamic accounts.

This leaves us with one question: how does a broker make money out of the account? Simply put, the broker generates money from the trade spreads. Essentially, this is the difference between the Ask and the Bid prices of any pair of currencies. Most brokers who provide Islamic accounts often increase the spread in order to recover their amounts.
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Understanding Fundamental Analysis

Fundamental analysis is used in the equities market in order to gauge the true value and to make investments based off of this calculation. Fundamental analysis is also used in the forex market. However, in the forex market, traders generally evaluate currencies and their respective countries in order to decide whether an investment is worth it. Economic announcements made in any country often have a direct impact on the true value of a currency, which is why fundamental analysis is used.

How Does It Work?

A prudent trader generally factors in a variety of different news reports, economic announcements and international factors in every single one of their trade. Political events, economic announcements and other news often leave a very strong impact on certain currencies. Therefore, calculating the true value of a currency is not easy. Obviously, it should be known that the values tend to change with the passage of time. For instance, factors such as economic growth and the financial strength of the company both have a major impact on the true value of a currency.

A trader who follows the fundamental trading strategy will consider these factors when planning his/her approach. However, you should know that there are practically unlimited forex fundamental strategies that are used in the market today. Extrapolating the concept of a fundamental analysis directly on to the forex market is not easy.

Many of the factors and indicators that fundamental analysts use in the stock market are non-existen in the forex market. Moreover, you are not trading stocks with one another: you are trading economies. In every single economy that you trade, there are hundreds of companies trying their best to maximize their profit potential. Therefore, analyzing the statistics of a single company doesn’t provide much insight in to whether an economy is faring well or not.

Why Do Currency Values Matter?

The number one reason why currency values matter is because of cross border trading. For instance, if the yen becomes stronger, Japan’s export industry will collapse as countries will stop buying in bulk amounts. The whole concept of fundamental analysis in the forex market boils down to one thing: interest rates. If interest rates rise up, investors often pull out their money from the economy and start saving them up. Movement in the interest rates is the main tool used by Central Banks in order to make movements in their respective economies.

If the interest rates increase, the incentive to spend decreases considerably. This means that there’s lesser money in the economy, which has an adverse impact on the economy, and thus the currency. Understanding fundamental analysis is important if you want to become a sound trader. Not only will it help you maximize your trading strategy, but it will allow you to generate more profits in the long run. Therefore, the biggest indicator that many fundamental analysts use in order to determine true currency values is the interest rate. If the rate of interest is high, the currency value is likely to fall soon.
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What You Need to Know About Swing Trading

There are many types of investment styles that certain investors tend to follow. For instance, some investors have come up with unique trading strategies that allow them to capture gains on a high. Other investors tend to follow a more aggressive approach, often making trades with high risks in order to generate higher profits. However, over the past few years, swing trading has also become a very popular style of trading. In essence, swing trading is a style of trading in which an investor tries to capture the gains in a currency pair in less than 4 days. Traders generally use detailed stock analyses in order to find out the momentum of currency pairs with short term price values.

There are certain situations in which currency pairs often reach extraordinary potential in a very short period of time. This means that the trader has no choice but to act as quickly as possible. Therefore, many traders try to “catch the trend” and ride it in the other direction. Thus, the name “swing trading.” However, the most important thing that you should know about swing trading is that you must have a concrete method that you can use in order to find direction changes. Here are a few important things that you should know about forex trading:

Identify Sources of Resistance and Support

The first step is to identify the areas that are likely to influence the price of currency pairs. You won’t be able to swing trade any currency pair unless you have an idea about where the price is going to react from. When studying charts, it is important to draw some horizontal lines in order to draw parallels. Create connections between the highs and lows and look for areas where the price has reversed before. This will form the blueprint for your swing trading. With the passage of time, you will end up drawing more and more lines, and it won’t be long before you will have a solid idea about the areas that form the basis of price resistance or support.

Testing

Now that you have identified the sources of support and resistance, the next step is to formulate a strategy that allows you to test these areas. The best way to do that is to overlay some charts with a time difference in order to see whether the areas are worth considering or not. Of course, there’s no sound strategy involved in testing particular figures. The only thing that you can do is to make a few calls and hope that they work out. If your investments pay off, you will then have a pretty clear idea about when to swing trade and the trends that you should look out.

Implementation

Swing trading is a lot of hits and misses, so it will be slightly difficult for you to get it right the first time. However if you persist with this style of trading, it won’t be long before you will become a pro trader!
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What You Need to Know About Mobile Trading

Over the past few years, forex trading has expanded considerably. Today, it is one of the most popular investment platforms in the world. Many people who want to invest their money someplace often choose to invest it in the forex market. There are many reasons why so many people prefer trading in the forex market. The biggest reason for that is because the market is highly accessible. You don’t need to be a professional investor if you want to put in money in the forex market. All you need is a basic understanding of how foreign exchange rates work. If you know how the exchange rates work, you can easily start trading in the foreign exchange market.

Because of the fact that forex trading is so accessible, many people often consider it a type of side income and trade on their mobile phones. The forex market remains active round the clock. If you have an idea about how the market works, you should seriously consider opening a trading account. However, before you start trading with your mobile phone, there are a few things that you should know. Here are the do’s and don’ts of mobile phone trading:

Dos:

The first thing that you should ensure is that you have a solid internet connection. Remember, there’s a delay of a few seconds in every trade that you make, so having a secure connection is important if you want to remain abreast of the market and wish to prevent unnecessary losses. A poor internet connection can seriously cause troubles with your trading and can lead to unnecessary losses.

Another thing that you should use your mobile trading platform for is to scour for news about the latest forex trends. There are plenty of apps out there that provide in depth news and details about the latest trends in the foreign exchange market. You can use these trends in order to make better purchases on the market.

One important thing that you should know is that you must always maintain an objective outlook on the market. Many people often fall prey to their own impulses or desires when trading through their mobile phones. Always maintain an objective look on the market and never let your emotions meddle with your trades.

Don’ts

The first thing that you need to avoid while trading online is to not chase the markets. Many people remain active on the forex market round the clock through their phones. Mobile trading can easily become addictive if you don’t take keep it under check. Create a trading plan and make sure you only trade for the hours set in the plan.

Furthermore, never abandon your trading strategy. Many traders make the foolish mistake of abandoning their trading strategy in order to chase short term profits. You should know that this tends to backfire very quickly, and it won’t be long before you end up with a significantly reduced amount in your account. Always stick to a particular trading strategy.
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What You Should Know About Day Trading

The foreign exchange market is worth billions of dollars. It is the only market that remains active round the clock, with currencies being traded back and forth at all times. Now, most traders follow different types of strategies while trading on the forex market. Some believe in a more aggressive approach and use trading styles such as swing trading in order to generate more profits. On the other hand, other traders often take a long term approach, holding currency pairs for several days in the hope of generating a bigger profit.

One of the many ways by which you can trade on the forex market is day trading. In most cases, standard day trading deals are opened and closed on the very same day. It is up to you to decide the number of trades that you want to make throughout the course of the day. However, most people think that all day trades should be closed on the same day. That’s not true. In some cases, a day trading deal may extend longer than a single day. If that happens, the deal is renewed of its own accord at 22:00 GMT each night until it goes in to closure. Of course, you will be charged a small fee for every renewal for the additional 24 hours that you get.

The fee will only be collected from your account once every day at the time the deal is renewed. It is taken from the Free Balance that exists in your trading account. If there’s no Free Balance in your trading account, your credit card will be debited. However, some people prefer not to link their credit cards to their forex accounts. If that is the case, your account will go in to negative, and the next time you have any Free Balance, the amount from the rolling fee will be automatically deducted.

Nowadays, day trading has become extremely popular. The biggest reason for that is the fact that more and more people have begun to use the internet. There are four main steps that you must make if you want to initiate a day trading deal. Here they are:

Decide to perform a day trade deal on Forex. Observe the different deals and decide which one you want to make. You will need to take a look at your online account for this purpose too. Monitor the deal in your account until you hit the profit margins that you originally expected from the deal. Close the deal.

These are the four simple steps involved in closing a day trade. It’s not necessary for a person to initiate a day trade, however. There are plenty of other strategies involved in trading on the foreign exchange market. If you want to make sure that you generate maximum profits, you will need to diversify your trading approach. Use different approaches depending upon the market trends in order to make more profits in the forex market.

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