 04-01-2006, 11:53 AM
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asimon
Joined on 03-07-2006
Posts 140
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Rapid Forex e-Course Day 20
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===================================
"The Rapid Forex e-Course"
--> a 20-part mini-course series
Published by:
Abundant Freedom, LLC
http://RapidForex.com
===================================
To DOWNLOAD the "Insight Trader Package":
follow the instructions on the page below:
http://rapidforex.com/dlInsightV100.shtml
To See the e-Course Table of Contents:
http://rapidforex.com/ecourse.shtml
LESSON #20:
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Ins & Outs of the Business of Trading Money
for Money: The Top Questions (With Answers) We
Receive about FOREX Trading.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
These are the recurring questions we receive about the FOREX
market in general.
In regards to the courses we offer at RapidForex.com,
we have an extensive FAQ page here:
http://rapidforex.com/faq.shtml
Solidifying yourself as a PROFESSIONAL full-time FOREX
trader will take some time (but not a lot of time) and
education. We look forward to being a part of your continued
growth and interest in this absolutely amazing business.
==============
Q: Where is the central location of the FOREX market?
The word "market" is a bit misleading in describing FOREX
trading because there is NO central location where trading
takes place. The bulk of FOREX trading is between
approximately 300 large international banks that process
transactions for large companies and governments. These
institutions continually provide exchange rates for each
other and the broader market. The most recent quotation from
one of these banks is considered the market's current price
for that currency. Trading occurs over the internet, by
telephone, and through computer terminals at thousands of
locations worldwide.
>>> For more on this, go back to Lesson #1
Q: Why is FOREX so popular?
FOREX trading is attractive because it offers unparalleled
freedoms. A FOREX trader can live almost anywhere as long as
he/she is within reach of the internet. A FOREX trader can
work_from_home or office, and in some cases, even trade
while traveling! A FOREX trader can usually choose his/her
own hours to work since the global foreign exchange market
is open 24-hours a day. A FOREX trader avoids many common
headaches associated with running a business because there
is NO_inventory, NO_shipping, NO_billing, NO_collections, NO
employees, NO_commuting and NO_dress code. And finally,
since FOREX traders can potentially earn a very high income,
they enjoy the possibility of never, ever working for
someone else again!
>>> For more on this, go back to Lesson #2
Q: What are the primary currencies traded in FOREX?
For online brokers here in the United States, there are four
currency pairs that are heavily traded and that offer almost
immediate liquidity: USDollar/Japanese Yen, USDollar/Swiss
Franc, British Pound/USDollar and Euro/USDollar.
>>> For more on this, go back to Lesson #3
Q: What is a Pip?
A pip is the smallest unit of change that a currency pair
can move and is equivalent to the concept of a "tick" for
futures and equities.
For example, let's say you buy the EUR/USD, which is quoted
with 4 decimals, at 1.3051 and sell it later at 1.3062. The
difference would be +11 pips, or .0011. The USD/JPY currency
pair, however, is quoted with 2 decimals. If you bought the
USD/JPY at 130.61 and it then dropped to 130.31 and you sold
it, the difference would be -30 pips, or -.30. The pip
difference would determine your calculation of profit/loss
on the trade
>>> For more on this, go back to Lesson #3
Q: Is FOREX Trading Capital Intensive?
No. The broker's on our recommended list (which can be
accessed via our Resources Section at RapidForex.com)
require a minimum deposit of just $300 for opening a Mini
account and $2,000 for a regular account. And all of them
allow customers to execute margin trades at up to 100:1
leverage. This means that you can execute trades up to
$100,000 with an initial margin requirement of $1000.
However, it is important to remember that while this type of
leverage allows you to maximize their profit potential, the
potential for loss is equally great. A more pragmatic margin
trade for someone new to the FX markets might be 5:1 or even
10:1, but ultimately depends on your appetite for risk.
>>> For more on this, go back to Lesson #13
Q: What do the terms "bid/ask" and "spread" mean?
Bid is the highest price that the seller is offering for the
particular currency at the moment; Ask is the lowest price
acceptable to the buyer. Together, the two prices constitute
a quotation; the difference between the two is the spread,
that is, the difference between the price offered by a
dealer willing to sell something and the price he's willing
to pay to buy it back. In a trading situation consider the
figure USD/YEN 115.05/10. What this figure means is that we
would be able to offer you yen at .05 but is willing to buy
it back at 10. As a trader, the spread is inherently
important to know because your desire to obtain or liquidate
your position on the market will be effected by the spread.
>>> For more on this, go back to Lesson #4
Q: What kind of Trading Strategy Should I Use?
Currency traders make decisions using both technical factors
and economic fundamentals. Technical traders use charts,
trend lines, support and resistance levels, and numerous
patterns and mathematical analyses to identify trading
opportunities, whereas fundamentalists predict price
movements by interpreting a wide variety of economic
information, including news, government-issued indicators
and reports, and even rumor. The most dramatic price
movements however, occur when unexpected events happen. The
event can range from a Central Bank raising domestic
interest rates to the outcome of a political election or
even an act of war. Nonetheless, more often it is the
expectation of an event that drives the market rather than
the event itself.
>>> For more on this, go back to Lesson #6 & #7
Q: Why must I pay interest and/or when do I get interest and
who determines the amount of the interest?
Most deals in FOREX are done as Spot deals. Spot deals are
nearly always due for settlement two business days later.
This is referred to as the "Value date" or delivery date.
On that date the counterparties take delivery of the
currency they have sold or bought. In Spot FX the majority
of the time the end of the business day is 21:59 (London
time). Any position still open at this time are
automatically rolled over to the next business day, which
again finishes at 21:59. This is necessary to avoid the
actual delivery of the currency. As Spot FOREX is
predominantly speculative most of the time the traders never
wish to actually take delivery of the actual currency. They
will instruct the brokerage to always rollover their
position. Many of the brokers do this automatically unless
you instruct them that you actually want delivery of the
currency (which you don't :-). Another point noting is that
most leveraged accounts are unable to actually deliver the
currency as there is insufficient capital there to cover the
transaction.
Remember that if you are trading on margin, you have in
effect got a loan from your broker for the amount you are
trading. If you had a 1.0 lot position your broker has
advanced you the $ 100,000 even though you did not actually
have $ 100,000. The broker will normally charge you the
interest differential between the two currencies if you
rollover your position. This normally only happens if you
rolled over the position and not if you open and close the
position within the same business day. If the first named
currency has an overnight interest rate lower than the
second currency then you will pay that interest differential
if you bought that currency. If the first named currency has
a higher interest rate than the second currency then you
will gain the interest differential.
To simplify the above. If you are long (bought) a particular
currency and that currency has higher overnight interest
rate you will gain. If you are short (sold) the currency
with a higher overnight interest rate than you will lose the
difference.
Q: What is the difference between market and limit orders?
Market orders are executed immediately at the current market
price. Limit orders are orders that a trade should be
executed (in the future) when the market price reaches a
specified price trigger. A limit order places restrictions
on the maximum price to be paid or the minimum price to be
received.
>>> For more on this, go back to Lesson #9
Q: How long are positions maintained?
Approximately 80% of all forex trades last seven days or
less, while more than 40% last fewer than two days. As a
general rule, a position is kept open until one of the
following occurs: 1) realization of sufficient profits from
a position; 2) the specified stop-loss is triggered; 3)
another position that has a better potential appears and you
need these funds.
>>> For more on this, order our training package shown here:
http://rapidforex.com/index.shtml#buynow
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
asc, while this is the last formal lesson,
as shown via our Table of contents
http://rapidforex.com/ecourse.shtml, we promise this
won't be the last time you hear from us (unless you
unsub.scribe - which we know is unlikely :-) because
you will also continue to receive special_trading tips,
strategies, tricks, techniques, updates, case studies,
and announcements that are 'hot off the press' and
guaranteed to have a positive impact on your
currency-trading business and bottomline!. We look
forward to continuing our relationship with you
asc.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Health, Happiness & Prosperity,
Robert Borowski & Brian Campbell
Abundant Freedom, LLC
http://RapidForex.com
--------------------------
To DOWNLOAD the "Insight Trader Package":
follow the instructions on the page below:
http://rapidforex.com/dlInsightV100.shtml
Inside the "Insight Trader Package" you'll receive:
*Forex Freedom
*10% to 30% Monthly R.O.I.
To See the e-Course Table of Contents:
http://rapidforex.com/ecourse.shtml
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
"The Rapid Forex e-Course" is published by:
Abundant Freedom LLC
Visit us at http://RapidForex.com
This publication may be fre_ely redistributed if
copied in its entirety, as long as you do not claim
ownership, or alter the content in any way.
Copyright (c) 2004-5 Abundant Freedom LLC.
The information in this e-Course is provided for
educational purposes only. This information is
offerred as-is, with no warranty of any kind. While
Abundant Freedom LLC, and the author of this e-Course
have taken reasonable measure to assure the accuracy
of this information, the information is not guaranteed
to be accurate, and is subject to change at any time,
without notice.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
Abundant Freedom LLC
758 Kapahulu Ave #335
Honolulu
Hawaii 96816
United States
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