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Opening a mini Forex account, instead of a standard Forex account means you can trade smaller amounts, where the value of a pip will be $1, and greatly reduce the risk of a large loss. For example, a 10 pip loss on a standard trade of $100,000 would result in a loss of $100, whereas a 10 pip loss a mini Forex trading lot of $10,000 would be $10.
Many online Forex brokers will allow you to open a mini Forex account for as little as $250. Knowing that your losses are not likely to be great, will allow you to concentrate on adhering to a good trading strategy instead of watching your balance and worrying about a margin call.

Every Forex currency trader dreads a margin call. This means your Forex broker believes you do not have sufficient funds in your mini Forex trading account to cover your trading and he may liquidate all your trades.

If you are a beginner, the best way to protect yourself against a margin call is to only trade one pair at a time and use a small percentage of the capital in your mini

Forex account. Most important of all, set a stop-loss order, then you are protected if the market moves against you.

Another of the advantages of a Forex mini trading account is that you still have all the benefits of a whole standard account, the trading platform, charts etc. If you are a beginner I personally think that a Forex mini trading account is the most sensible option. Too many people rush in, thinking Forex currency trading is a quick way to make an easy buck, they are the 95% beginners who lose on the Forex market. Protect your capital while you learn the skill.

Once you have developed your skill and hopefully made a profit, you can invest the profit by trading slightly larger lots, $20,000 instead of $10,000. Don’t become over -confident, remember that profit comes from sound research.

Most traders/investors settle on which approach they are more comfortable with quite early on in their investing/trading career. Fundamental investing essentially concentrates on the company’s core business and how it is performing. More importantly, fundamental investing looks at what are the company’s prospects going forward. The understanding of the concepts of “forward looking” or “forward guidance” is key to stock trading because the value of a stock is based on how the company is going to perform in the future and not on what it has done in the past. As you can see, fundamental analysis can be quite subjective.

Technical trading on the other hand seeks to take the subjectivity of “forward guidance” out of the equation by solely concentrating on the price action and volume of stock traded. The basis is that all material information regarding a company is factored into the stock price. Experienced technical analysts can often detect the buying or selling by informed players or the “smart money”, solely by analyzing the price action. A newcomer however should be forewarned as the Technical Analysis arena of late has gotten very packed with all sorts of analytical tools which often leads to investors suffering from “analysis paralysis”. It is therefore critical for a new investor to seek to be an informed technical investor rather than jumping at the latest technical analysis mumbo-jumbo.

Many successful traders adopt a combination of fundamental and technical analysis to guide their trading decisions. The understanding of how fundamental news, when released to the public, affects the stock price technically is priceless. The old saying of “Buy the rumor and sell the news” is very apt to this discussion as an experienced technical trader can detect the buying or selling that may be based on whispers or rumblings in the market, which he may or may not have heard or be privy to. He can later close out his position for a profit when the material fundamental news is released and the stock price jumps or tanks as a result.

Despite the fact you are successful in the stock market, this does not imply that you’ll be successful in the Forex market. There are a lot of differences between the stock market and the Forex market. First of all, the Forex market is open 24 hours a day. This requires a lot more complexity and work. As you know, you cannot be in front of your computer 24 hours a day. You’ll have to figure out the best time periods to trade so that you can be successful. Also, you need volatility. And here’s another problem with the Forex market. There are periods of very high volatility and very low volatility. This difference is much higher in this market than on stocks. You may think that as the Forex market is open 24 hours a day, you can day trade whenever you want. You just need to turn on your computer and there it is… a trade just for you.

Well, that’s not even close to the reality. This may happen from time to time but it’s not frequent. You need to develop a good strategy. The last point I need to focus is a real important one. If you want to trade Forex you need to find a good forex broker.

Well, this isn’t a simple task as in the stock market because this market is not regulated. This means that there are a lot of brokers that don’t act in the best interest of their clients. Be ready to spend quite some time finding a solid broker that fits your needs.

2 – If the Forex market is open 24 hours a day, I can make a profit whenever I want

Well, not quite… As you know, to make a trade, a trader needs volatility. The volatility can appear anywhere within the 24 hours. As you cannot be in front of your computer all the time, this makes your work harder. First of all, you need to figure out the best time to trade (where volatility usually appears) and you also need to adjust your strategy to this period.

3 – I don’t have to pay commissions in the Forex market

You don’t have to pay commissions but you have to pay the spread. The spread is the difference between the bid and the ask of the currency pair you want to trade.

Sometimes, these fees are not so cheap. If you plan to be day trading, you’ll see a major part of your profits to be left for the broker.

4 – In order to be profitable in the Forex market, I need to predict what will happen

As Forex is a complex market, you need to constantly learn and evolve as a trader.

This does not mean you have to predict; this means you have to react and react fast.

As a trader, you need to access charts but also need to access to all the information you can. The more information you have, the better your response will be when something, good or bad, happens in the market.

5 – I’ll be more successful if I use a more complex strategy

This is clearly a myth. Simple things work better in life as well in Forex. If when you’re defining your strategy you use 3 indicators, I bet most of the times there will be one that goes against the others. Try do define a good but also a simple strategy.

To understand pips on the forex market you must understand how the market works.
Forex is an abbreviation of foreign exchange, the buying and selling of one foreign currency for another. As one currency strengthens so another weakens and knowing when to buy and sell is how money is made on the Forex markets. The Forex market is similar to the buying and selling of stocks but in many ways it is much more difficult. On the stock market you may spot a company that has potential, buy shares and hopefully make a profit, but on the money market there may be long term trends where a currency strengthens and weakens, but much of the trading is based upon daily fluctuations that change by the minute. A pip is the smallest unit of price that is traded for a currency. Most currencies are traded to four decimal points, so that a pip is 0.0001 or 1/100 of a cent. This may seem a minuscule amount until you realise that on a standard trade of $100,000 that is $10. The exception to the four decimal points is the Japanese yen which is normally traded to two decimal points.

Obviously if you are buying a currency you must also be selling another and therefore prices are always quoted in pairs, the USD/EUR being the most active. The more active a pair the narrower the difference between the bid/ask price is likely to be, with a possible spread of just two pips for the most actively traded. Unlike the stock market there are no broker fees to pay, but as each trade involves both selling one currency and buying another, the difference in the spread is the cost of the transaction and must be taken into account when calculating profit. Therefore, as a buyer, the pip spread is very important to you. When you buy you have to accept an immediate loss. The value of the currency you have bought must rise by the extent of the pip spread before you break even and the value rise again to make a profit. The lower the spread the easier it is to make a profit.
Active markets tend to have a lower pip spread, for example 2-3 pips. Currencies that are bought and sold less frequently may have a far higher spread. However, before you go to a broker offering a very narrow spread, do check that they are reputable. You should also remember that pip spreads are not guaranteed, they can change if the market fluctuates widely.

This article will provide you with a step-by-step guide on how you can acquire knowledge on the basics of trading stocks online. Before we begin, you must first realize that successful stock trading requires skill and a strong determination to “win”. As such, the trading profession must be approached with the same respect as a medical student studying to become a surgeon. To succeed in this business, it will require your utmost dedication, time and most of all your burning desire to be a great trader/investor.

What Are Stocks & How Do You Trade Them?
This article on Why Companies issue Stock & Why people Invest In Them will give you a basic idea on the purpose of stocks and where you can trade them online. The stock markets in the United States are undoubtedly one of the best in the world in terms of liquidity and regulatory governance. The US markets also give the astute trader some very outstanding potential for quick and substantial profits. Read Major Stock Markets and Major Stock Indices for a basic summary on what every investor should know about the US markets. Once you are more experienced trading the markets, you can delve deeper into them by studying Larry Harris’ excellent book on the Microstructure of

Markets called Trading and Exchanges. The content of this book reads like a textbook out of an MBA course but it is outstanding in its level of practical detail and real-life insight into today’s modern capital markets.

The event to be held from March 13.

Run by professional US stock trader and teacher Adam E. Kaye, CLU, ChFC, MBA, the 10-day course, which is divided into Part 1 and Part 2, is designed for active traders and short term investors in the UAE and Global Stock Markets. The course was created and modified during several months by several US professional stock traders, led by Adam E. Kaye. The course is open for general public and employees of financial institutions such as banks, investment houses, and brokerage services. OTA certificates will be given upon successful completion of the course to the attendees.

The students will learn how to trade with discipline, a concise plan, utilizing risk management techniques based on sound technical analysis that the Wall Street Pro’s use.

The objective of the course in Part 1 is to prepare active traders and investors to trade online stocks profitably just as the professional trading business people do. OTA will teach the principles of stock trading using the latest tools and online software for the UAE and the Global Stock Markets available allowing each course participant to gain practical experience during the class.

The objective of the course in Part 2 is to cover advanced trading strategies, techniques and tactics. Each day covers selected advanced concepts which the student will then execute ‘live’ during the Stock Market hours using OTA funded accounts.

Bahram Khadavi, General Manager and Partner OTA Middle East said: ‘The first OTA Dubai Online Stock Trading class for the regional markets is already a success. Since the markets are always volatile and investors and traders can easily get hurt by this volatility, our slogan remains as always ‘Education first before trading the markets’, and I believe that our recently released OTA course for the regional markets evidences our commitment to that kind of forward-thinking.’

Choosing the right Forex broker is absolutely vital if you are going to be successful in trading online on the Forex money market. There are a lot of companies offering services, but you should examine carefully what is on offer to find the best deals. This is where your research really begins. Make yourself a check list to ensure you are getting the best deal.

There are a number of forums online where you can talk with other traders to discover their experiences with brokers. Obviously you need to be cautious about other peoples opinions, the information may be inaccurate, but it will give you an idea. Then research several companies before taking a decision.

Most brokers offer a dummy platform where you can practise trading without committing money. Try these out to ensure that the layout is clear giving details such as a bar chart of the currency being traded, an account summary showing your current trading position with information such as stop/losses orders etc. Telephone and email should be available as a back up.

As a beginner in Forex trading it is sensible to open a mini account first, many brokers offer them starting at $200. Look for a broker that guarantees risk is limited to the amount deposited in the account, then you know your house is not in danger!

Forex traders use either fundamental analysis or technical analysis to decide when it is the right time to enter the money market.

Fundamental analysis

Fundamental analysis is based on the demand and supply of the currency to be traded. This depends on the economic factors of the country using the currency, for example, economic strength, or otherwise, current interest rates, gross domestic product (GDP) etc. The difficulty with using fundamental analysis to trade on the Forex money market is that the market is very fast moving, with rapid changes throughout the day. Economic data is more suited to long term investment. It involves constantly studying the data, knowing when a country is going to publish its economic reports and how to interpret them. This is why most short term traders use technical analysis based on price movements.Technical AnalysisTechnical analysis is based on the theory that prices move in a pattern and it is possible to predict when a currency has reached a high or low point based on historical evidence, then buy or sell accordingly.There are a number of methods, based on charts, that technical analysts use to follow price trends, for example candlestick charts and Bollinger Charts. Traders may study several before taking a decision.So which of the two methods of analysis should you use? Most traders probably use a combination of both. Fundamental analysis provides a long term view of the strength of a currency based on economic situation of the country using the currency plus current supply and demand, but it would be difficult to trade on a daily basis using this method. Nevertheless a trader needs to be aware of economic situations and when economic figures are published as these can affect trading. Technical analysis is useful for daily trading indicating possible entry and exit points. Therefore most traders will use both fundamental and technical analysis. To succeed on the Forex money market you need to have a thorough understanding of the currency you are trading in. Over 24 hours that currency may move dramatically up or down yet end the day at the same price as it started. Buying or selling at the wrong time can result in huge losses. Even experienced traders have bad days and the skill is to minimize the losses, hence the importance of having a stop/loss price in place. Understand how this works fully before attempting to trade.

Unlike the stock market, the Forex market is generally an unregulated market with no central location for trading. Traders use the services of a Forex broker to participate in the market. In the U.S., legitimate Forex brokers are registered with one of the various regulatory agencies. If you are new to Forex trading systems, you must be careful to seek a registered broker and avoid off-exchange currency dealers and the scams that have evolved around the Forex market. Legitimate brokers may be found online and your chosen Forex broker should provide an online platform for you to trade on. Online platforms provide Forex trading systems with less costly trades and better accuracy in the pricing of currency pairs than conventional trading systems.Technological advances in computers and the Internet are responsible to create a market of online Forex trading opportunities. The Internet has provided for market knowledge to be disseminated to the global Internet community. This information was traditionally limited to banks and other financial institutions. With the advances in online, real-time and near real-time information flows, you have access to market information in line with the banks and financial institutions. Even during periods of market volatility, online platforms are able to provide a consistent flow of quotes. However, many online platforms are disguised as Forex trading platforms when they are really frauds.Some of the fraudulent online platforms that you should be careful to avoid, particularly if you are a new or inexperienced trader are fraudulent brokers, bookmakers and bucket shops. Fraudulent broker practices may include offering outrageous bid/ask spreads and requiring unreasonable commissions. They may promise profits and never deliver them or claim to be trading your money when, in reality, they have used the money for personal interests. They may also provide you with phony accounting statements that indicate profits they never made or they may attempt to lure you with phony stories of successful business relationships using fake customer names. The onus is on you to invest time and resources in locating a reputable broker.

Bookmakers are platforms established to bet on currencies. While this type of betting is perfectly legitimate in some states, it is not to be confused with Forex trading systems. In many cases, bucket shops are fraudulent platforms designed to cheat you out of money. Though they will claim to engage Forex trading, they have no connection to Forex. Their fraudulent schemes usually involve convincing you to invest in currency futures and options rather than the spot trading market that is Forex. Since the methods of futures and options trading provide for a broker to contractually engage in transactions over a period time, this scheme allows the frauds to collect more of your investment dollars for a longer period of time. The spot Forex market, on the other hand, is designed to provide simplicity and allow investors to enter and exit the market at will. There is no contractual obligation or lengthy time constraints.

Most online platforms are designed to run with Windows and most web browsers. In general, an online platform provides access to an order entry process and should have a method of displaying currently held positions, charts of monitored currency pairs and some itemized form of account data. You should also seek a platform that offers some method of backup and communication in the case of loss of access to the Internet.

What makes you pull the trigger and buy? Think back to the last time you bought stock…did you say something like, I had better get in before the market goes up some more!’ Or was it ‘I’m going to double down on this loser to lower my average cost!’Whatever the reason, the actual trigger to buy was probably EMOTIONAL, not RATIONAL. And that’s NOT a good thing. The truth is, investing like this is dangerous to the health of your wealth. But if you can rise above the temptation to invest based on emotion - it is possible to make money by recognizing the emotions of others…and investing appropriately.Today I’ll show you a few simple ways you can do just that - recognize when the emotions of other investors hit extremes, and then profit from their irrationality. (Here’s a hint: In order to profit, you’ll have to be willing to go against the crowd…)The ‘I Gotta Get In’ And ‘Double Down On Your Losers’ SyndromesIt seems that emotions are much more powerful than rational thought when it comes to individual investors. One example of this is the ‘I gotta get in’ syndrome. Most investors are ‘rear-view mirror’ investors…they expect the immediate investing future to equal the recent investment past. So many people, seeing the Nasdaq up wildly in 1998 and 1999, said, ‘I gotta get in on that.’ Not a good idea.

Another example is the ‘double down on your losers’ syndrome. As investors, most of us are averse to taking losses. (Although…if you remember, the Golden Rule of Investing is to ‘Cut Your Losers Short and Let Your Winners Ride.’ Accepting small losses is part of being an investor. The key is to keep those losses small.)

So one way that people try to avoid taking a loss is to ‘double down’ on it…or, put another way, to actually buy more of the stock as it falls. But, again, this is simply emotion winning out over rational thought - a stock doesn’t care what price you paid for it.