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Posted by: frogman Jan 8 2009, 06:34 PM

Assalamualaikum to all Brunei pips maker,

The purpose of this topic is stop the majority of the bruneian victim from being cheated by forex scam.
As there is an alarming increase of so called "GURUS" and "Forex GOD" around in brudirect classified claiming that they can make 100-1000 pips in 1 day. Anyone who is in need of money or wishing to earn more would easily fell prey to it. So the best way to prevent such incident from happening again is to learn it by yourself and not from other whose agenda is to take money from you and leave your investment in trouble when things goes bad.

Information is freely available on the internet and i believe anyone who really wishes to make money from Forex should learn it properly or at least try to do it on their own even if it means losing some money which will serve as a valuable lesson in your future trading.

Anyway, Happy New Year and a warm welcome to all Forex Newbies and Pros. I hope that this thread can generate enough guide, tutorial and some personal opinion towards the Forex(Foreign Exchange) Market. Hope everyone can make more money in this year 2009.

P/s: A lot of FOREX GURU will hate me for making this thread hehe

What is FOREX?

The Foreign Exchange market, also referred to as the "FOREX" or "Forex" or "Retail forex" or "FX" or "Spot FX" or just "Spot" is the largest financial market in the world, with a volume of over $4 trillion a day. If you compare that to the $25 billion a day volume that the New York Stock Exchange trades, you can easily see how enormous the Foreign Exchange really is. It actually equates to more than three times the total amount of the stocks and futures markets combined! Forex rocks!
What is traded on the Foreign Exchange market?

The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, and are traded in pairs; for example the euro and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY).

Because you're not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy.

In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country's economy, compared to the other countries' economies.

Unlike other financial markets like the New York Stock Exchange, the Forex spot market has neither a physical location nor a central exchange. The Forex market is considered an Over-the-Counter (OTC) or 'Interbank' market, due to the fact that the entire market is run electronically, within a network of banks, continuously over a 24-hour period.

Until the late 1990's, only the "big guys" could play this game. The initial requirement was that you could trade only if you had about ten to fifty million bucks to start with! Forex was originally intended to be used by bankers and large institutions - and not by us "little guys". However, because of the rise of the Internet, online Forex trading firms are now able to offer trading accounts to 'retail' traders like us.

All you need to get started is a computer, a high-speed Internet connection, and maybe some luck .

What is a Spot Market?

A spot market is any market that deals in the current price of a financial instrument.
Which Currencies Are Traded?

The most popular currencies along with their symbols are shown below:

Forex currency symbols are always three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country’s currency.
When Can Currencies Be Traded?

The spot FX market is unique within the world markets. It’s like a Super Wal-Mart where the market is open 24-hours a day. At any time, somewhere around the world a financial center is open for business, and banks and other institutions exchange currencies every hour of the day and night with generally only minor gaps on the weekend.

The foreign exchange markets follow the sun around the world, so you can trade late at night (if you’re a vampire) or in the morning (if you’re an early bird). Keep in mind though, the early bird doesn’t necessarily get the worm in this market - you might get the worm but a bigger, nastier bird of prey can sneak up and eat you too…


The Forex market (OTC)
The Forex OTC market is by far the biggest and most popular financial market in the world, traded globally by a large number of individuals and organizations. In the OTC market, participants determine who they want to trade with depending on trading conditions, attractiveness of prices and reputation of the trading counterpart.

The chart below shows global foreign exchange activity. The dollar is the most traded currency, being on one side of 89% of all transactions. The Euro’s share is second at 37%, while that of the yen is at 20%.



Why Trade Foreign Currencies?

There are many benefits and advantages to trading Forex. Here are just a few reasons why so many people are choosing this market:

• No commissions.
  
• No clearing fees, no exchange fees, no government fees, no brokerage fees. Brokers are compensated for their services through something called the bid-ask spread.
  
• No middlemen. Spot currency trading eliminates the middlemen, and allows you to trade directly with the market responsible for the pricing on a particular currency pair.
  
• No fixed lot size.
  In the futures markets, lot or contract sizes are determined by the exchanges. A standard-size contract for silver futures is 5000 ounces. In spot Forex, you determine your own lot size. This allows traders to participate with accounts as small as $250 (although we explain later why a $250 account is a bad idea).
  
• Low transaction costs.
  The retail transaction cost (the bid/ask spread) is typically less than 0.1 percent under normal market conditions. At larger dealers, the spread could be as low as .07 percent. Of course this depends on your leverage and all will be explained later.
  
• A 24-hour market.
  There is no waiting for the opening bell - from Sunday evening to Friday afternoon EST, the Forex market never sleeps. This is awesome for those who want to trade on a part-time basis, because you can choose when you want to trade--morning, noon or night.
  
• No one can corner the market.
  The foreign exchange market is so huge and has so many participants that no single entity (not even a central bank) can control the market price for an extended period of time.
  
• Leverage.
  In Forex trading, a small margin deposit can control a much larger total contract value. Leverage gives the trader the ability to make nice profits, and at the same time keep risk capital to a minimum. For example, Forex brokers offer 200 to 1 leverage, which means that a $50 dollar margin deposit would enable a trader to buy or sell $10,000 worth of currencies. Similarly, with $500 dollars, one could trade with $100,000 dollars and so on. But leverage is a double-edged sword. Without proper risk management, this high degree of leverage can lead to large losses as well as gains.
  
• High Liquidity.
  Because the Forex Market is so enormous, it is also extremely liquid. This means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell at will. You are never "stuck" in a trade. You can even set your online trading platform to automatically close your position at your desired profit level (a limit order), and/or close a trade if a trade is going against you (a stop loss order).
  
• Free “Demo” Accounts, News, Charts, and Analysis. Most online Forex brokers offer 'demo' accounts to practice trading, along with breaking Forex news and charting services. All free! These are very valuable resources for “poor” and SMART traders who would like to hone their trading skills with 'play' money before opening a live trading account and risking real money.
  
• “Mini” and “Micro” Trading:
  You would think that getting started as a currency trader would cost a ton of money. The fact is, compared to trading stocks, options or futures, it doesn't. Online Forex brokers offer "mini" and “micro” trading accounts, some with a minimum account deposit of $300 or less. Now we're not saying you should open an account with the bare minimum but it does makes Forex much more accessible to the average (poorer) individual who doesn't have a lot of start-up trading capital.

What Does It Cost to Trade Forex?
An online currency trading (a “micro account”) may be opened with a couple hundred bucks. For a micro account, its recommend at least $1,000 to start. For a mini account, its recommend at least $10,000 to start. There are some broker that you can use to trade forex lower than $1,000.


How You Make Money Trading Forex

In the FX market, you buy or sell currencies. Placing a trade in the foreign exchange market is simple: the mechanics of a trade are very similar to those found in other markets (like the stock market), so if you have any experience in trading, you should be able to pick it up pretty quickly.

The object of Forex trading is to exchange one currency for another in the expectation that the price will change, so that the currency you bought will increase in value compared to the one you sold.
Example of making money by buying euros
Trader's Action EUR USD
You purchase 10,000 euros at the EUR/USD exchange rate of 1.18 +10,000 -11,800*
Two weeks later, you exchange your 10,000 euros back into US dollars at the exchange rate of 1.2500. -10,000 +12,500**
You earn a profit of $700. 0 +700
*EUR 10,000 x 1.18 = US $11,800
** EUR 10,000 x 1.25 = US $12,500

An exchange rate is simply the ratio of one currency valued against another currency. For example, the USD/CHF exchange rate indicates how many U.S. dollars can purchase one Swiss franc, or how many Swiss francs you need to buy one U.S. dollar.
How to Read an FX Quote

Currencies are always quoted in pairs, such as GBP/USD or USD/JPY. The reason they are quoted in pairs is because in every foreign exchange transaction you are simultaneously buying one currency and selling another. Here is an example of a foreign exchange rate for the British pound versus the U.S. dollar:

GBP/USD = 1.7500

The first listed currency to the left of the slash ("/") is known as the base currency (in this example, the British pound), while the second one on the right is called the counter or quote currency (in this example, the U.S. dollar).

When buying, the exchange rate tells you how much you have to pay in units of the quote currency to buy one unit of the base currency. In the example above, you have to pay 1.7500 U.S. dollar to buy 1 British pound.

When selling, the exchange rate tells you how many units of the quote currency you get for selling one unit of the base currency. In the example above, you will receive 1.7500 U.S. dollars when you sell 1 British pound.

The base currency is the “basis” for the buy or the sell. If you buy EUR/USD this simply means that you are buying the base currency and simultaneously selling the quote currency.

You would buy the pair if you believe the base currency will appreciate (go up) relative to the quote currency. You would sell the pair if you think the base currency will depreciate (go down) relative to the quote currency.

Long/Short

First, you should determine whether you want to buy or sell.

If you want to buy (which actually means buy the base currency and sell the quote currency), you want the base currency to rise in value and then you would sell it back at a higher price. In trader's talk, this is called "going long" or taking a "long position". Just remember: long = buy.

If you want to sell (which actually means sell the base currency and buy the quote currency), you want the base currency to fall in value and then you would buy it back at a lower price. This is called "going short" or taking a "short position". Short = sell.

Bid/Ask Spread

All Forex quotes include a two-way price, the bid and ask. The bid is always lower than the ask price.

The bid is the price in which the dealer is willing to buy the base currency in exchange for the quote currency. This means the bid is the price at which you (as the trader) will sell.

The ask is the price at which the dealer will sell the base currency in exchange for the quote currency. This means the ask is the price at which you will buy.

The difference between the bid and the ask price is popularly known as the spread.


Let's take a look at an example of a price quote taken from a trading platform:

Forex Spread On this GBP/USD quote, the bid price is 1.7445 and the ask price is 1.7449. Look at how this broker makes it so easy for you to trade away your money.

If you want to sell GBP, you click "Sell" and you will sell pounds at 1.7445. If you want to buy GBP, you click "Buy" and you will buy pounds at 1.7449.

In the following examples, we're going to use fundamental analysis to help us decide whether to buy or sell a specific currency pair. If you always fell asleep during your economics class or just flat out skipped economics class, don’t worry! We will cover fundamental analysis in a later lesson. For right now, try to pretend you know what’s going on…

EUR/USD
In this example Euro is the base currency and thus the “basis” for the buy/sell.

If you believe that the US economy will continue to weaken, which is bad for the US dollar, you would execute a BUY EUR/USD order. By doing so you have bought euros in the expectation that they will rise versus the US dollar.

If you believe that the US economy is strong and the euro will weaken against the US dollar you would execute a SELL EUR/USD order. By doing so you have sold Euros in the expectation that they will fall versus the US dollar.

USD/JPY
In this example the US dollar is the base currency and thus the “basis” for the buy/sell.

If you think that the Japanese government is going to weaken the Yen in order to help its export industry, you would execute a BUY USD/JPY order. By doing so you have bought U.S dollars in the expectation that they will rise versus the Japanese yen.

If you believe that Japanese investors are pulling money out of U.S. financial markets and converting all their U.S. dollars back to Yen, and this will hurt the US dollar, you would execute a SELL USD/JPY order. By doing so you have sold U.S dollars in the expectation that they will depreciate against the Japanese yen.

GBP/USD
In this example the GBP is the base currency and thus the “basis” for the buy/sell.

If you think the British economy will continue to do better than the United States in terms of economic growth, you would execute a BUY GBP/USD order. By doing so you have bought pounds in the expectation that they will rise versus the US dollar.

If you believe the British's economy is slowing while the United State's economy remains strong like bull, you would execute a SELL GBP/USD order. By doing so you have sold pounds in the expectation that they will depreciate against the US dollar.

USD/CHF
In this example the USD is the base currency and thus the “basis” for the buy/sell.

If you think the Swiss franc is overvalued, you would execute a BUY USD/CHF order. By doing so you have bought US dollars in the expectation that they will appreciate versus the Swiss Franc.

If you believe that the US housing market bubble burst will hurt future economic growth, which will weaken the dollar, you would execute a SELL USD/CHF order. By doing so you have sold US dollars in the expectation that they will depreciate against the Swiss franc.

I don't have enough money to buy 10,000 euros. Can I still trade?
You can with margin trading! Margin trading is simply the term used for trading with borrowed capital. This is how you're able to open $10,000 or $100,000 positions with as little as $50 or $1,000. You can conduct relatively large transactions, very quickly and cheaply, with a small amount of initial capital.

Margin trading in the foreign exchange market is quantified in “lots”. We will be discussing these in depth in our next lesson. For now, just think of the term "lot" as the minimum amount of currency you have to buy. When you go to the grocery store and want to buy an egg, you can't just buy a single egg; they come in dozens or "lots" of 12. In Forex, it would be just as foolish to buy or sell 1 euro, so they usually come in "lots" of 10,000 (Mini) or 100,000 (Standard) depending on the type of account you have.

For Example:

* You believe that signals in the market are indicating that the British Pound will go up against the US dollar.
* You open one lot (100,000), buying with the British pound at 1% margin and wait for the exchange rate to climb. When you buy one lot (100,000) of GBP/USD at a price of 1.5000, you are buying 100,000 pounds, which is worth US$150,000 (100,000 units of GBP * 1.50 (exchange rate with USD)). If the margin requirement was 1%, then US$1500 would be set aside in your account to open up the trade (US$150,000 * 1%). You now control 100,000 pounds with US$1500. Your predictions come true and you decide to sell.
* You close the position at 1.5050. You earn 50 pips or about $500. (A pip is the smallest price movement available in a currency).



When you decide to close a position, the deposit that you originally made is returned to you and a calculation of your profits or losses is done. This profit or loss is then credited to your account.

We will also be discussing margin more in-depth in the next lesson, but hopefully you're able to get a basic idea of how margin works.


Rollover
No, this is not the same as rollover minutes from your cell phone carrier! For positions open at your broker's "cut-off time" usually 5pm EST, there is a daily rollover interest rate that a trader either pays or earns, depending on your established margin and position in the market. If you do not want to earn or pay interest on your positions, simply make sure they are all closed before 5pm EST, the established end of the market day.


Since every currency trade involves borrowing one currency to buy another, interest rollover charges are part of forex trading. Interest is paid on the currency that is borrowed, and earned on the one that is bought. If a client is buying a currency with a higher interest rate than the one he/she is borrowing, the net differential will be positive (i.e. USD/JPY) - and the client will earn funds as a result. Ask your broker or dealer about specific details regarding rollover.

Also note that many retail brokers do adjust their rollover rates based on different factors (e.g., account leverage, interbank lending rates). Please check with your broker for more information on rollover rates and crediting/debiting procedures.

Demo Trading
You can open a demo account for free with most Forex brokers. This account has the full capabilities of a "real" account. Why is it free? It's because the broker wants you to learn the ins and outs of their trading platform, and have a good time trading without risk, so you'll fall in love with them and deposit real money. The demo account allows you to learn about the Forex markets and test your trading skills with ZERO risk.

Posted by: frogman Jan 8 2009, 07:01 PM

For more info regarding Forex.

This website is a good place so start and learn:

http://www.babypips.com/school

http://www.forexfactory.com

Posted by: frogman Jan 11 2009, 03:47 PM

Lots of Major currency down at the start of this month.

EU is having some retrenchment. Down a lot from decemeber 2008 .

Posted by: fxpengail Jan 11 2009, 06:34 PM

i totally agree with your thread frogman, there are a lots of pro claimed 'GURUS' advertising over the brudirect offering their services, but the question is if they do make money in forex why do they have to bother to offer for an expensive payment(charges)????? i know nothing is free in this world BUT if i myself are professional in trading forex i wont demand for a highly cost teaching i will teach who ever wanted to learn in forex just for free as there are nothing to lose actually, i have tried to join up a forex class before but its not worthed. the point is for a newbie like myself we can easily find a lot of forex sources over the net try to check out babypips.com its really a good site..... frogman glad to have you writing regarding this forex scam thread thank you

Posted by: frogman Jan 11 2009, 07:37 PM

Thanks for the support fxpengail. I just don't want to see more people paying huge amount of fees for nothing and lose lots of money in forex as they learned nothing at all.

Which pair do you trade by the way

Posted by: fxpengail Jan 11 2009, 08:04 PM

yes frogman thats definetly right paying a huge amount of fee and gain nothing thats totally useless better save the money for a real account deposit much better that way... hopefully 1 day il become a successful trader n will help those in need forgman a salute for you bro

Posted by: fxpengail Jan 11 2009, 08:07 PM

keep on riding the pips.....

Posted by: fxpengail Jan 11 2009, 08:11 PM

by the way i trade on EUR

Posted by: frogman Jan 12 2009, 02:31 AM

I trade EUR/USD pair, kind of bearish this recent week. But my own personal forecast is that it will shoot back up to at least 1.5xx within this month. Now waiting for the chance hehe

I want to try GBP/JPY pair but its very volatile to me, kind of easy for me to get a heart attack .

Posted by: starboykb Jan 12 2009, 08:52 AM

you forget there is a forex guru in dst featured blog. I dont even know what the hell he is trying to say in his blog about the forex. but i myself would recommend not to join any forex programs if require fee or better not to play with it. you need to monitor the forex everyday and its not easy lol.

internet is still the best free learning place and someone develop a programs out there for you to play with the real time forex using virtual money. good for trying before starting using and wasting on REAL money.

Posted by: fxpengail Jan 12 2009, 06:15 PM

yes dont ever jump into trading forex if you dont have enough knowledge in forex as we all know forex is the no 1 most volatile market with a high risk, im not a master or a guru in forex but i wish to share all my knowledge in forex trading and analysis that i have learned hopefully in the next post i will provide a free forex stuff : forex system,tutorial and EA for free for a newbie to gain more knowledge in forex trading.....may all the winning pips ride with me

Posted by: frogman Jan 14 2009, 12:39 AM

That will help a lot of traders hehe. Hope to get some free stuff from you

Posted by: fxpengail Jan 14 2009, 08:32 PM

this a very simple and profitable system using 5 min timeframe and it is ideal for scalping only


system set up:
5minute timeframe
MA 48 expotential typical price (HLC/3) (black colour)
MA 16 expotential typical price (HLC/3) (red colour)
laguerre

long entry rules:
-MA 16 cross MA 48 ( MA 16 is above MA 48)
-laguerre cuts above 0.8

short entry rules:
-MA 16 cross MA 48 (MA 16 is below MA 48)
-laguerre cuts below 0.2


target profit will be 60pips
stop loss will be 30 pips make sure if your entry long/short placing your stop loss above/below both of the MA's

hope this will help
happy trading may all the winning pips be with us
the risk/reward is 2:1 ratio

Posted by: frogman Jan 15 2009, 03:30 AM

Thanks for sharing bro. I notice you are using FXDD broker, which pair do you trade actively?

Posted by: fxpengail Jan 15 2009, 01:47 PM

yup bro im using fFXDD broker for my demo account and i use IBFX for my real account, for scalping i trade on the major pair only(excluding GBP/USD) using the system above and, for long term trading i mostly trade on the GBP using my other system my favourite are GBP/CHF soon il be posting the strategy that i used for long term trading.....

Posted by: Sanakan_jp Jan 19 2009, 01:27 PM

Ah, finally~ I've been wonder around and hope someone willing to highlight some tips and guide for Forex ^^

Geezzz Frogman, you should post this earlier as a christmax gift for me. Now, I need some time to READ. (Never thought it will be that long in one post ^^

Posted by: frogman Jan 19 2009, 03:40 PM

The info is from website you can read all there. There is many classes and lesson available. Very interactive with quiz hehe.

If you have any problem, you can post it here, we can chat and discuss

Posted by: fxpengail Feb 15 2009, 04:14 AM

frogman hey bro where are you???? havent heard from you lately.....

im really sick of tired of a pro-claimed guru's that kept on advertising on the brudirect offering their 'holy grail' system that promise a lot of fortune but at the end everything is a failure they simply convince people that forex trading are easy by learning or using their system....is it??? the truth in forex is there are never an easy way to make a fortune without knowing the basic, almost all pro-claimed guru only taught how to use their system without teaching the basic in forex trading...ok here is the list of basic in forex:
market introduction,
chart pattern,
candle formation,
trendline,
pivot point
support & resistance,
elliot wave
fibonacci,
risk management,
risk reward etc actually there are a lot more tho

the key on becoming a successful trader is patience....patience on learning the smart way even tho u have to learn for month or a year but trust me its worthed all u need to learn is basic not jumping into a 'holy grail' system that are promising u to be a profitable trader and trust me there are no such thing....they taught that currency trading are simple and easy to profit but the truth is there are a lot more to learn on how to become truly successfull traders.... so my advise is learn all the basic in currency trading and thats all u need basically if u understand the basic u can easily make a trading system on ur own then trade on a demo first to see how ur strategy works if its consistence for a month or two then go for a live trading......


PS: to all pro-claimed gurus do u know all the basic in forex????? if yes do reply
dont just teach people how to use MA's or MACD,ADX etc thats is crap teach them how to see the market runs alright?


PS: frogman bro back me up please all the pro-claimed will hate me for this hahahahaha
just want to alert others for not becoming on mentor fx scam victim