Basic Terminology Every Forex Trader Should Now

The first time I heard that the market is "bullish", I thought that we were in Spain, with the running of the bulls. I also thought that straddling the market, meant something totally inappropriate to the business world.

Forex Terminology is something that can truly through any novice right out off the bus. That is why I thought I should probably begin with terminology first. I will try and explain the most basic terms, just to give you a boost in the right direction. Trust me when I say that Forex is made easy by knowing these basic terms

Bullish / Bull Market.
This means that there are increases in the market, i.e. the market is moving upwards. If the dollar increases towards the yen, then this would be a bull market.

Bearish / Bear Market.
This means that there are decreases in the market, i.e. the market is moving downwards. If the dollar decreases towards the yen, then this would be a bear market.

Spread.
This is what normally is charged by your broker to enter you into a market. The standerd nowadays seem to be a 3-5 pip spread. This is also a fixed cost so you will not be charged anything extra to enter a certain market. Remember that, for you to make a profit, or break even, you need to make at least the spread asked by your broker.

Pip.
A pip is the amount at which a price of a currency can increase. A 1.2500 to 1.2501 move, is one pip! Make sure that you know where to look to determine the amount of pips you made or lost in a trade as some currencies pip is the 4th decimal point (0.0001) and some is the 2nd decimal point (0.01).

Lots.
When you trade forex you trade in lots. Lots are standard at $100 000.00, though there are mini lots which are $10 000.00.

Leverage.
Leverage is what enables you, as a small investor, to trade such huge volumes on the forex market. Say for instance that your broker gives you leverage of 100:1, what this means is that for every $1000 you have you can trade $100,000, which is 1 standard lot. So if you had $5,000 then you could trade 5 lots. This amount will vary from broker to broker and is normally shown as a ratio.

Margin-call.
This is what happens when you are in a non-profitable trade and you do not have enough security left in your margin account at your broker. When you reach this point, your broker will close some or all open positions, to you from going into a negative account balance.

There are more terms that I will discuss further along the line, and I will go into much more depth into some, but this should get you started on the right road.

4 ways to make forex trading easier

The thing about forex trading, is that many people are always on the verge of making millions. But really, how many people have you seen that have started from scratch and are now living like kings. Not many!

There are of course, ways to make forex trading a bit simpler to understand and come to grips much quicker than normal. And as with most things in life, it will cost you some work. Not too much though.

• Read, read, read!
• Join a forum, ask questions.
• Planning
• Practice

Read, read, read as much as you can. The more you read, the more you are likely to see what are the normal pitfalls in forex trading and thus learn to avoid them. This is also something you can do in bed or on a bus, so no excuses here!

Join a forum, ask questions. This is also something that can really save you a lot of money. If for some reason you cannot find the answers you are looking for in online or offline resources, then this is normally the best place to look for those answers. Many people of forex forums are very helpfull, and sometimes you get a killer strategy, though not always.

Planning. This step is probably the most important and will make you life much, much easier if done. If not, then you will tend to lose a lot of money really, really fast. There is a saying in forex trading: "Plan your trade, trade your plan!". This was the best piece of advice that I ever could have gotten.

Practice makes perfect. Do not start to trade with real money if you have not been successful in your practice accounts. Some experts say that you should be profitable for at least 3 months before you even think of starting to trade with real money, I say 1 should be okay, but only if you were extremely successful.

That in short is 4 ways to make your forex trading easier. Apply them and I cannot see you going wrong in the world of forex trading. Till next time.

How is Forex Made Easy?

It isn't. That is the short and sweet of it. Many people say that forex is a very easy thing to do and that anyone can do it. Though this might be true, there are definitely some aspects of forex that is not made for every person.

If you look at forex trading, ask yourself one question.
"If it is so easy, why isn't everybody doing it?"
That is the question is normally what I tell people to ask themselves when they look into forex trading as a way of life. For many people it has become a great way to make a living, but unfortunately it is not for everybody.

How then is forex made easy? In the form of a managed account, where you hand over your money and let the professionals take the strain that can be forex trading. Many institutions that offer forex trading, most of the time, also offer a managed forex service. This service normally costs much higher than what might be neccesary to start up on your own. Although it is more expensive, your risk is reduced. Why? Because you might not spot the right trade. Because you might forget your stop-loss. These intitutions normally have a wealth of experience to ensure maximum growth of your investment capital.

That is the short of how forex is made easy. Next I will look into some strategies and how they perform on the markets today.