Forex terms: Forex Hedging

A transaction implemented by a forex trader to protect an existing or anticipated position from an unwanted move in exchange rates. By using a forex hedge properly, a trader who is long a foreign currency pair can be protected from downside risk, while the trader who is short a foreign currency pair can protect against upside risk.

eBook review: Candlesticks and Resistance by John H. Forman

Download this ebook here

The Candlesticks and Resistance ebook by John H. Forman is quite short and simple, and explains how you can use candlestick charts to make your Forex predictions

It is quite easy to follow as long as you know the basic terms of Forex and already have some expereince with reading Forex charts, it might be quite helpful.  This is a free book that you can store in your Forex resource library.  You should be able to read the candlestick charts and know how to manage your trades a little better after you have read it.

What is Forex?

Forex or the Foreign Exchange is the largest financial market in the world. You can trade 5 days a week, 24 hours a day and trade one currency for another to mae the most of the changes that currencies make each day.

You may or may not know that over each day, various factors affect the value of a currency.  These factors result in a fluctuation in the market and if you buy a currency at one value, when you sell it later on in the day, it will be worth a different amount as it was when you bought it.

Whilst there are a small percentage of traders who have managed to make a living by trading Forex, most people who try trading with the Forex market actually fail.  This is because many new traders jump in head first without having researched it first and with little patience and high expectations.  You must have a lot of money to invest in order to see any changes and you should not take risks with the market.

It is possible to predict how the market will move throughout the day, and even in the next weeks and months.  This allows you to plan for these changes, and you will be able to follow trends in the market.

When you are trading, you will see that you can trade with currency pairs.  These are usually expressed in sets of 6 letters, for example EUR/USD to denote the price of a euro in US dollars.  If the value of the EUR/USD is 1.273, then this means that 1 euro is equal to 1.273 US dollars.

The great thing about Forex is that it is available 24 hours and it is possible to make more money on larger investments than you could with a bank.  There is no TAX on the earnings.  Some Forex brokers do charge commission, although this is up to the broker, and the only charges you will need to pay is the spread on the currency which is a slight additional charge that all brokers place on trades in order to make their money.