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Here’s a nice quote for you all

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Forex CFDs - Profit With Caution

What are FX CFDs?

Many investors are familiar with the terms FX trading and Contracts for Difference (CFD) trading. However, what does Forex CFD mean?

Simply put, Forex Contracts for Difference is an arrangement between two parties in which the seller agrees to pay the buyer the difference between the current price of a currency and the value of the currency at the time of the contract. FX trading, by way of CFDs, offers you an opportunity to make profits in the following two ways.

* When you buy a currency expecting it to appreciate. * When you sell a currency expecting it to decline.

Forex CFD has the following advantages.

* You can trade with margin money * High leverage options * Hedging opportunities

The absolute value of the currency pair is of no concern to the trader. What is of concern to the trader is whether the price is above or below the contract price. Concisely, a trader has to make just one key decision, whether the investment is going to go up or down. The trader makes money if he is right, and loses if he is wrong.

So remember, if you throw caution to the winds, FX trading can make a big hole in your pocket. Bad money management and excessive use of leverage can negatively affect your bottom line. In addition, market manipulators may influence you to into selling pairs at a loss.

Globally, a contract for difference trading has become a rage since the last decade. Not just in stocks, but also in FX trading, investors are finding CFDs to be more flexible and cost efficient.

On the face of it, FX trading and CFD trading allow you to take advantage of the market or price movements without taking physical delivery of the security. Any difference in the price between the time you buy and sell is settled in cash. All this looks simple enough to a newbie. But you must keep in mind that the difference can be a significant loss if you are not careful enough.

A great deal is written on the benefits of CFD (Contracts for Difference) in comparison to other avenues of investment. The advantages, however, are accompanied by trade offs you must watch out for, if you really want to make a profitable buck. The fact is no one should trade in CFDs unless they have understood the intricacies well. This implies that CFD trading is suitable for only those investors who are experienced enough; possess the expertise, risk control and financial capability to trade in such instruments.

For a trader or an investor who has been traditionally investing into stocks, understanding the risks of CFDs and FX trading is very important. In particular, CFD Trading Markets can pose significantly more risks than what stock trading does. The greatest pitfall comes from trading on margins. A newbie, if not careful, can end up losing more money than the initial deposit. A beginner must keep in mind that margin trading has the potential of translating multiple small moves into either huge profits or losses.

The End

A CFD is a contract between two parties, where one party agrees to pay the other party the difference between the current value of an asset and its value at contract time (plus any interest) if the difference is in their favor.

The forex market is a global market that trades in foreign currencies. The forex market is the largest financial market in the world with average daily trading volumes of around $5 trillion.

A CFD is a contract between two parties, where one party agrees to pay the other party the difference in value of an asset (such as shares) between the time at which they entered into the contract and the time at which they exit.

The benefits of trading with a CFD are that it does not require a margin payment or any other deposits, and you can trade on margin without owning the underlying asset.

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Advantages of Forex Social Trading

On the internet is a lot of trading information about how to trade Forex online; which currency pairs are bullish and which ones are bearish? The trading platforms have a lot of advanced trading tools the users have access to in finding pips in the market.

In the last couple of years is a new feature available on some of the online trading platforms. It is called a Social trading network; it is a platform connected to the trading platform. It gives the traders possibility to follow other traders' trade and even copying their trades. As it is social it is also possible to interact with other traders and develop trader experiences through the interaction.

Advantages

One advantage is the interaction between the social network and the trading platform. On the trading platform is a small window with information from the social trading platform. It provides the trader with information about the recent trades on the social platform and which trader is top traders and has a high win ratio.

It is an advantage as the information from the social net is inspirational and gives ideas of which currency pairs to trade. If the trader wants more information about a trader he can click on the traders' link and find the history of the traders and see how he has managed the trades he had made in the past. If he has managed the trades well he will be a valuable inspirational source or even a trader considering copying.

What to consider copying a trader

The purpose copying another trader is to gain a profit. It is therefore important to analyze the trader to be copied. Analyzing others performance in a Forex social trading net is called social financial analysis. Some of the data an analysis includes are historical data as profit margin and latest trade figures; it could be the last few weeks of trade data and the profit ratio in recent trades.

As in regular Forex trading social trading has as well large potential rewards, but also large potential risk and it is in these trades also necessary to be aware of the risks. One way to minimize the risk is to analysis the traders' performance and starts copying the trader with a small amount of money and then increases the money amount. In figures it could be 2 or 3 percentage of the investment capital on a Copy Trade. If the Copy Trade generates a continuous profit increase the percentage of the investment capital to a higher level.

Final Words

Social trading networks are becoming more and more popular due to a single fact that they enable ordinary people or investors to automatically copy best traders who trade stocks, currencies, commodities or indices.  This way they can make money from market without knowing how to trade.

Your first place to look could be Zulutrade.  It is one of the best and largest social investment networks.  The company was founded back in 2006 by Leon Yohai. It allows to connect talented forex social traders (signal providers) and investors who can follow their trading signals and auto copy them to their own broker account. Investors can choose from thousands of signal providers.

The best way to start is Zulu performance ranking where you can compare signal providers by their earnings, win%, average pips/trade, number of followers and other statistics.

Just remember that as with any other investing, past performance is no guarantee of future profits so invest wisely and do not risk money you cannot afford to lose.

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When Is It Necessary To Leave Forex Trading?

Trading may be a thrilling alternative to the “traditional” job, but in this industry there is a lot of hype – with a prevalence of stories about wealth and happiness connected with forex trading. Perhaps, this is true for a few lucky beggars, but many traders lose money and face with difficulties when exiting this business. The knowledge when to enter and when to go out of business is as significant as any other forex trading lesson.

 Tax planning is incredibly important for traders, but the tax economy that you can create will not bring you a big benefit, if you are not able to get a profit regularly. Reducing losses through tax rebates will not give you much use – you must stop the losses.

 There is a lot of information about when to enter and exit the transaction, but there is a little guidance about when to enter and leave the forex trading business. Nevertheless, some of the axioms, which traders follow in the execution of transactions – to sell fast the losses and allow profits to grow – can be used to the forex trading business as a whole.

 If you lose money all the time – that is, your forex trading capital reduces in length of time – perhaps, forex trading business does not suit you.

 Success in forex trading is not obligatory connected with how clever you are, how hard you work and how much time you spend on business. People, who have early achieved brilliant results in the area of medicine, law and engineering, often lose big sums of money in stock forex trading.

 Like any important decision, leaving the forex trading business must not be taken hastily. If you leave too early, maybe you will deprive yourself the chance to achieve experience in this business. Besides, you (or others) can think that you’re a flopper. But sooner or later awareness of that you’re losing money, cannot be set aside.

 Gambling – whether it is a casino, or cards, or sports betting, or buying lottery tickets – give entertainment and (sometimes substantial) earnings, but to do this as a constant career is not tough-minded. Even though forex trading is certainly not a gamble, there are some commonalities that should be noted, and the lessons that should be mastered.

 A lot of persons who do not have a large capital and novice traders try their hand at retail and individual forex trading firms, using small amounts of capital. They know what career in the forex trading business is, but they do not have much training and encouragement. They often risk their relatively small, but very important for them savings. A large number of these traders, unfortunately, lose their money sooner or later. The most part of people starts this business without extensive plans, not having a special capital or training. Prolongation of this activity – is a continuous infusion of money in trade – may turn up painful for the trader and his family. Therefore, the issue remains: when to leave business?

 The decision to leave is difficult to take by yourself – and do not do this. Talk to family and friends, as well as successful traders, who are able to understand your questions, and other professionals who understand your finances.

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What Is Spread Betting Forex?

What is spread betting in forex? Spread betting is a simple tool which enables you to place a bet on an underlying mechanism, for example the foreign exchange or the commodities markets, in order to make a profit from the movement of one market in value against another. You are able to stake a certain amount of money, for example £1 per each point of price movement, and you win or lose your bet depending whether the market moves for or against your decision.  The spread is the cost involved in placing your position.

Forex - what is this?

The forex is simply another term for the foreign exchange currency market or fx.  This market is made up of many currency pairings for example the US dollar against the British pound USD/GBP which fluctuate in price.  Spread betting forex enables you to take a position in your chosen currency market based on whether you believe the price will rise or fall, in order to profit from price movements.

Why chose spread betting – What are the key advantages?

Spread betting forex has gained in popularity recently, as it enables entry into various markets with comparatively little capital, compared to the more traditional methods of trading.  This has made the markets accessible to virtually everyone who wants to trade.  Spread betting can be used across a variety of markets; however we are going to focus on spread betting forex, as the forex is the largest marketplace in the world, with both great liquidity and volatility with over $3.2 trillion daily turnover.  The key advantages are detailed below.

Spread bets can be placed on movements up and down in price

There are many advantages to spread betting versus traditional methods of trading.  The first is that you can place a bet on both upwards and downward movements in price, you do not need to wait for the market to move in one direction solely before you can place a bet.

Smaller bets – low initial bank and stake required

Spread betting forex is leveraged, also known as geared, so you can trade on margin.  This means that you can use a much smaller amount of capital funds to place a bet that you would need in a more traditional equities market.  This is possible because you are not purchasing the actual underlying tool, but rather betting on fluctuations on price movement.  For example you can bet £100 stake per point, and if the market moves 100 points in your favour, you would profit 100 pounds x100 points =£10,000, plus or minus the cost of the spread.  In order to do this you would need enough funds in your spread betting forex account to cover your initial stake and your total risk/position, which is significantly less initial outlay than you would need in a more traditional market.  Don’t worry if this sounds complicated, your spread betting forex company will provide training on this, and will do the calculations for you.  The above example is a simplified version for demonstration purposes.

Profits from spread betting are tax free

You do not pay taxes on your profit from spread betting forex, as these are classed as winnings and as such are exempt from capital gains tax.  There is also no stamp duty to pay as you are not making an actual purchase, but rather betting on market price fluctuations.  Quite simply, all your profits are yours to keep.  Your spread betting forex broker will take their costs out of the spread when you open and close your positions, therefore you will always be able to calculate your exact profits (and losses) in advance, providing you have a good trading strategy in place.

Spread betting forex is open for bets 24 hours  

The forex is open 24 hours and bets can be placed even when the specific currency pairs are not open. You can trade via the phone or the internet, and today most trading platforms have a phone app to allow you to open, close and monitor trades on the move using your smartphone, although this is not essential.  Each currency market has a set open and close time.  You can also day trade, or decide to carry your trade over a period of days of months, depending on what suits your personal style of trading.  You can trade spot fx, futures or options via your spread betting account.

Spread bets can be placed to hedge your position

As you can open a spread betting account in order to bet against both the upwards and downwards movements in price, you can hedge your bets against an open position or a vulnerable portfolio position in order to minimize your losses.  This is normally done by more experienced traders.  Your spread betting forex company will also employ dealers who hedge the bets placed with them by customers.  You can potentially place a trade against movements both upwards and downwards in the same market, in order to minimize your losses, and you can include this technique as part of your trading plan.

Conclusion

Forex is a global market where currencies are traded. It is the largest financial market in the world.

This market operates 24 hours a day, five days a week, with trading sessions in London, New York, Tokyo and Sydney. The currency pairs are traded with each other for profit or hedging purposes.

There are two main types of forex trading: spot and forward. Spot trading is when you buy currency today in order to sell it later at a higher price when the value goes up. Forward trading is when you buy currency today to sell it at a later date when the value will be higher.

Spread betting offers an efficient and effective way to trade forex.

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Start Forex Trading

If you think of trading forex, you should make sure you understand all the basics such as pros and cons and learn some trading strategies.

Don’t despair if you start losing in the beginning as trading involves a lot of learning and practice. Make sure you keep learning and understand what really moves forex markets.

Tip #1: Don’t over-trade

Stay tuned for more tips.

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Holiday season forex

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