FOREX is the worlds largest and most liquid trading market. Many consider FOREX as the best home business you can ever venture in. Even though regular people have had the opportunity to take part in trading foreign currencies for profit (in the same way banks and large corporations do) since 1998, it is just now becoming the cool, hip, new "thing" to talk about at parties, business events, and other social gatherings.
Even though it has been somewhat of a loosely guarded secret, every day more and more investors are turning to the all-electronic world of FOREX trading for income and profit because of its numerous benefits & advantages over traditional trading vehicles, like stocks, bonds and commodities.
But, still, whenever something seems new or is just becoming a part of social conversation, news articles, and water cooler gossip, misconceptions have to be overcome, the mind
has to be open and the slate has to be clear for starting out fresh with the CORRECT information.
So, in this article, it is my attempt to give you some solid, but not over-detailed, information on just what the heck "FX" (FOREX) means, what it is, and why it exists.
As a successful trader said, Trading FOREX is like picking money up off the floor. Not trading FOREX is like leaving it there for someone else to pick up." Others in the industry
have also said, Trading FOREX is like having an ATM machine on your own computer.
Here's an explanation (one I feel you'll appreciate) of what FOREX is and how a bunch of traders, profit from it:
The Foreign Exchange Market, also referred to the "FOREX" or "FX" market, is the spot (cash) market for currency.
But, don't mistake FX as trading the futures market, where you buy a contract to purchase a particular currency at a future price in time.
What FX traders do is much less risky than trading currencies on the futures market, much more profitable, and a lot easier, than trading stocks.
So, you're probably wondering where it's at ... or ... how to access the FX market?
The answer is: FX Trading is not bound to any one trading floor and is not centralized on an exchange, as with the stock and futures markets. The FX 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.
Yes, if that's the first time you've heard about an all-electronic market, I know this may sound somewhat intriguing to you.
Here's what you are actually trading when you participate in the Foreign Exchange (FOREX) market:
Essentially, like the large banks who use the FX market to protect themselves from the fluctuating exchange rate of different currencies, as an investor, what a FX trader is doing is
simultaneously exchanging one countries currency for another. So, in actuality, they're electronically trading a currency-pair and the price that is quoted to us is the exchange rate
between the two currencies.
In other words, simply the quoted price is how many of the one currency is worth 1 of the other currency.
Example:
EUR/USD last trade 1.2850 - One Euro is worth $1.2850 US dollars.The first currency (in this example, the EURO) is referred to as the base currency and the second (/USD) as the counter or quote currency.
The FOREX has a DAILY trading volume of around $1.5 trillion dollars - 30 times larger than the combined volume of all U.S. equity markets. This means that 1,498,574 skilled traders could each take 1 million dollars out of the FOREX market every day and the FOREX would still have more money left than the New York Stock exchange every day!
The FOREX plays a vital role in the world economy and there will always be a tremendous need for the FOREX. International trade increases as technology and communication increases. As long as there is international trade, there will be a FOREX market. The FX market has to exist so a country like Japan can sell products in the United States and be able to receive Japanese Yen in exchange for US Dollar.
There's plenty of money to be made using FOREX for plenty of traders that use the right trading techniques / tactics that will allow them to profit immensely. And, with only 5% of the daily turnover of volume coming from banks, government and large corporations who need to hedge,
the other 95% is for speculation and profit.
http://ovfbooks.forextech.hop.clickbank.net
About the Author
FOREX Trader and Freelance writer
Wednesday, March 25, 2009
Tuesday, March 24, 2009
A Comprehensive Forex Broker Register
A Comprehensive Forex Broker Register
By [http://ezinearticles.com/?expert=Eddie_Tobey]Eddie Tobey
A comprehensive forex broker list includes investment banks with dealing rooms, commercial banks with treasury operations, and online brokerages that serve a larger market. The investment banks with forex trading capabilities include Morgan Stanley, Merrill Lynch, Goldman Sachs, Salomon Smith Barney, Lehman Brothers, Credit Suisse First Boston, Deutsche Bank, JP Morgan, Prudential Securities and Bear Sterns.
Some of the brokerage services are not directly accessible for all customers. For example, inter-bank market dealers and treasury operations in commercial banks handle large customer orders themselves.
The top commercial banks in the Forex Broker List, having inter-bank and treasury operations, are JP Morgan Chase Bank, Bank of America, CitiBank, Wachovia Bank, Wells Fargo Bank, Fleet Bank, US Bank, HSBC Bank, Sun Trust Bank, Bank of New York, State Street, Chase Manhattan Bank, Key Bank, Branch Bank, PNC Bank, Lasalle Bank, South Trust Bank, MBNA America Bank, Fifth Third Bank.
The online forex broker list of smaller forex accounts sees new entrants almost on a daily basis.
The online forex broker list includes Forex Capital Markets, MG Financial Group, CMS Forex, Global Forex Trading, GCI Forex Direct, Forex.com, GAIN Capital, Real time Forex SA (Geneva), Global Forex, Commerce Bank and Trust, FX Solutions, Forex MHV, swissDirekt (Swiss), Goetz Financial Forex, NY Broker Borsentermin AG, Act Forex, Online Trader, Shield FX Online Currency Trading, Forex Trade Signals, CMC Group PLC, Foreign Currency Direct Limited (UK), FX Advantage, FXCM, Forex Millenium, ACM REFCO, REFCO Spot, Easy Forex, Online Forex Trading Inc., Lincoln Corporation, Global Trade Waves, Ltd., and CIBC FX Web Dealing. [http://www.WetPluto.com/A-Comprehensive-Forex-Broker-Register.html]Forex Broker Info provides detailed information on forex brokers, forex trading and market makers, and other forex-related topics. Forex Broker Info is the sister site of [http://www.WetPluto.com/The-Benefits-of-Incorporating-in-Florida.html]Incorporating in Florida Web
Article Source: http://EzineArticles.com/?expert=Eddie_Tobey http://EzineArticles.com/?A-Comprehensive-Forex-Broker-Register&id=68683
By [http://ezinearticles.com/?expert=Eddie_Tobey]Eddie Tobey
A comprehensive forex broker list includes investment banks with dealing rooms, commercial banks with treasury operations, and online brokerages that serve a larger market. The investment banks with forex trading capabilities include Morgan Stanley, Merrill Lynch, Goldman Sachs, Salomon Smith Barney, Lehman Brothers, Credit Suisse First Boston, Deutsche Bank, JP Morgan, Prudential Securities and Bear Sterns.
Some of the brokerage services are not directly accessible for all customers. For example, inter-bank market dealers and treasury operations in commercial banks handle large customer orders themselves.
The top commercial banks in the Forex Broker List, having inter-bank and treasury operations, are JP Morgan Chase Bank, Bank of America, CitiBank, Wachovia Bank, Wells Fargo Bank, Fleet Bank, US Bank, HSBC Bank, Sun Trust Bank, Bank of New York, State Street, Chase Manhattan Bank, Key Bank, Branch Bank, PNC Bank, Lasalle Bank, South Trust Bank, MBNA America Bank, Fifth Third Bank.
The online forex broker list of smaller forex accounts sees new entrants almost on a daily basis.
The online forex broker list includes Forex Capital Markets, MG Financial Group, CMS Forex, Global Forex Trading, GCI Forex Direct, Forex.com, GAIN Capital, Real time Forex SA (Geneva), Global Forex, Commerce Bank and Trust, FX Solutions, Forex MHV, swissDirekt (Swiss), Goetz Financial Forex, NY Broker Borsentermin AG, Act Forex, Online Trader, Shield FX Online Currency Trading, Forex Trade Signals, CMC Group PLC, Foreign Currency Direct Limited (UK), FX Advantage, FXCM, Forex Millenium, ACM REFCO, REFCO Spot, Easy Forex, Online Forex Trading Inc., Lincoln Corporation, Global Trade Waves, Ltd., and CIBC FX Web Dealing. [http://www.WetPluto.com/A-Comprehensive-Forex-Broker-Register.html]Forex Broker Info provides detailed information on forex brokers, forex trading and market makers, and other forex-related topics. Forex Broker Info is the sister site of [http://www.WetPluto.com/The-Benefits-of-Incorporating-in-Florida.html]Incorporating in Florida Web
Article Source: http://EzineArticles.com/?expert=Eddie_Tobey http://EzineArticles.com/?A-Comprehensive-Forex-Broker-Register&id=68683
A Look at Online Forex Brokers
A Look at Online Forex Brokers
By [http://ezinearticles.com/?expert=Eddie_Tobey]Eddie Tobey
An online forex broker is a firm that facilitates retail trading using Internet technologies. Global Forex Trading (GFT), one of the popular online forex brokers. It provides retail traders with a free demo trading account, allows users to open a live account, gives live help, provides software called DealBook FX 2, and allows viewing of account documents. (DealBook FX 2 can be downloaded for the demo trading account).
Gain Capital Group’s Online Forex offers 200:1 leverage. In some cases, the total return on investment is higher due to leverage. For example, with $1000 cash in a margin account, the investor can control up to $200,000 in notional value. Of course, trading on leverage magnifies both the investor’s profits and losses.
GCI Financial Ltd. offers commission-free online trading in forex. GCI offers Internet trading software, fast and efficient execution, and 0.5% margin requirements. This broker offers USD or Euro denominated trading accounts. The spreads are 3 pips in EUR/USD and USD/JPY, and are 4 to 5 pips for other major commissions. Clients can hedge by opening positions in the same currency in opposite directions. Risk to the investor is limited to the deposited funds. Market analysis and research, real-time charts, and forex trading signals are available at no charge.
ACM, part of the REFCO group, offers 3 pip spreads on all major currencies, which works out to between 0.02% and 0.03% on the dollar value. They also offer commission-free trading, and forex trading with a 1% margin, which means that a trader can control $1,000,000 with $10,000 in his account.
There are many online forex brokers that offer free demo accounts for potential forex traders to practice trading. It is only a matter of registering and starting demo trading to get a feel for forex trading. In addition, at most sites, traders can find free forex news to assist them with their trade strategies. [http://www.WetPluto.com/A-Comprehensive-Forex-Broker-Register.html]Forex Brokers Info provides detailed information on forex brokers, forex trading and market makers, and other forex-related topics. Forex Brokers Info is the sister site of [http://www.WetPluto.com/The-Benefits-of-Incorporating-in-Florida.html]Incorporating in Florida Web
Article Source: http://EzineArticles.com/?expert=Eddie_Tobey http://EzineArticles.com/?A-Look-at-Online-Forex-Brokers&id=59128
By [http://ezinearticles.com/?expert=Eddie_Tobey]Eddie Tobey
An online forex broker is a firm that facilitates retail trading using Internet technologies. Global Forex Trading (GFT), one of the popular online forex brokers. It provides retail traders with a free demo trading account, allows users to open a live account, gives live help, provides software called DealBook FX 2, and allows viewing of account documents. (DealBook FX 2 can be downloaded for the demo trading account).
Gain Capital Group’s Online Forex offers 200:1 leverage. In some cases, the total return on investment is higher due to leverage. For example, with $1000 cash in a margin account, the investor can control up to $200,000 in notional value. Of course, trading on leverage magnifies both the investor’s profits and losses.
GCI Financial Ltd. offers commission-free online trading in forex. GCI offers Internet trading software, fast and efficient execution, and 0.5% margin requirements. This broker offers USD or Euro denominated trading accounts. The spreads are 3 pips in EUR/USD and USD/JPY, and are 4 to 5 pips for other major commissions. Clients can hedge by opening positions in the same currency in opposite directions. Risk to the investor is limited to the deposited funds. Market analysis and research, real-time charts, and forex trading signals are available at no charge.
ACM, part of the REFCO group, offers 3 pip spreads on all major currencies, which works out to between 0.02% and 0.03% on the dollar value. They also offer commission-free trading, and forex trading with a 1% margin, which means that a trader can control $1,000,000 with $10,000 in his account.
There are many online forex brokers that offer free demo accounts for potential forex traders to practice trading. It is only a matter of registering and starting demo trading to get a feel for forex trading. In addition, at most sites, traders can find free forex news to assist them with their trade strategies. [http://www.WetPluto.com/A-Comprehensive-Forex-Broker-Register.html]Forex Brokers Info provides detailed information on forex brokers, forex trading and market makers, and other forex-related topics. Forex Brokers Info is the sister site of [http://www.WetPluto.com/The-Benefits-of-Incorporating-in-Florida.html]Incorporating in Florida Web
Article Source: http://EzineArticles.com/?expert=Eddie_Tobey http://EzineArticles.com/?A-Look-at-Online-Forex-Brokers&id=59128
A Look at Online Forex Brokers
A Look at Online Forex Brokers
By [http://ezinearticles.com/?expert=Eddie_Tobey]Eddie Tobey
An online forex broker is a firm that facilitates retail trading using Internet technologies. Global Forex Trading (GFT), one of the popular online forex brokers. It provides retail traders with a free demo trading account, allows users to open a live account, gives live help, provides software called DealBook FX 2, and allows viewing of account documents. (DealBook FX 2 can be downloaded for the demo trading account).
Gain Capital Group’s Online Forex offers 200:1 leverage. In some cases, the total return on investment is higher due to leverage. For example, with $1000 cash in a margin account, the investor can control up to $200,000 in notional value. Of course, trading on leverage magnifies both the investor’s profits and losses.
GCI Financial Ltd. offers commission-free online trading in forex. GCI offers Internet trading software, fast and efficient execution, and 0.5% margin requirements. This broker offers USD or Euro denominated trading accounts. The spreads are 3 pips in EUR/USD and USD/JPY, and are 4 to 5 pips for other major commissions. Clients can hedge by opening positions in the same currency in opposite directions. Risk to the investor is limited to the deposited funds. Market analysis and research, real-time charts, and forex trading signals are available at no charge.
ACM, part of the REFCO group, offers 3 pip spreads on all major currencies, which works out to between 0.02% and 0.03% on the dollar value. They also offer commission-free trading, and forex trading with a 1% margin, which means that a trader can control $1,000,000 with $10,000 in his account.
There are many online forex brokers that offer free demo accounts for potential forex traders to practice trading. It is only a matter of registering and starting demo trading to get a feel for forex trading. In addition, at most sites, traders can find free forex news to assist them with their trade strategies. [http://www.WetPluto.com/A-Comprehensive-Forex-Broker-Register.html]Forex Brokers Info provides detailed information on forex brokers, forex trading and market makers, and other forex-related topics. Forex Brokers Info is the sister site of [http://www.WetPluto.com/The-Benefits-of-Incorporating-in-Florida.html]Incorporating in Florida Web
Article Source: http://EzineArticles.com/?expert=Eddie_Tobey http://EzineArticles.com/?A-Look-at-Online-Forex-Brokers&id=59128
By [http://ezinearticles.com/?expert=Eddie_Tobey]Eddie Tobey
An online forex broker is a firm that facilitates retail trading using Internet technologies. Global Forex Trading (GFT), one of the popular online forex brokers. It provides retail traders with a free demo trading account, allows users to open a live account, gives live help, provides software called DealBook FX 2, and allows viewing of account documents. (DealBook FX 2 can be downloaded for the demo trading account).
Gain Capital Group’s Online Forex offers 200:1 leverage. In some cases, the total return on investment is higher due to leverage. For example, with $1000 cash in a margin account, the investor can control up to $200,000 in notional value. Of course, trading on leverage magnifies both the investor’s profits and losses.
GCI Financial Ltd. offers commission-free online trading in forex. GCI offers Internet trading software, fast and efficient execution, and 0.5% margin requirements. This broker offers USD or Euro denominated trading accounts. The spreads are 3 pips in EUR/USD and USD/JPY, and are 4 to 5 pips for other major commissions. Clients can hedge by opening positions in the same currency in opposite directions. Risk to the investor is limited to the deposited funds. Market analysis and research, real-time charts, and forex trading signals are available at no charge.
ACM, part of the REFCO group, offers 3 pip spreads on all major currencies, which works out to between 0.02% and 0.03% on the dollar value. They also offer commission-free trading, and forex trading with a 1% margin, which means that a trader can control $1,000,000 with $10,000 in his account.
There are many online forex brokers that offer free demo accounts for potential forex traders to practice trading. It is only a matter of registering and starting demo trading to get a feel for forex trading. In addition, at most sites, traders can find free forex news to assist them with their trade strategies. [http://www.WetPluto.com/A-Comprehensive-Forex-Broker-Register.html]Forex Brokers Info provides detailed information on forex brokers, forex trading and market makers, and other forex-related topics. Forex Brokers Info is the sister site of [http://www.WetPluto.com/The-Benefits-of-Incorporating-in-Florida.html]Incorporating in Florida Web
Article Source: http://EzineArticles.com/?expert=Eddie_Tobey http://EzineArticles.com/?A-Look-at-Online-Forex-Brokers&id=59128
Choosing A Forex Broker
Choosing A Forex Broker
By [http://ezinearticles.com/?expert=Geoff_Turnbull]Geoff Turnbull
With currency trading becoming ever more popular, the number of brokers is growing at a rapid rate. What should one look at when deciding which broker to open an account with? These are the important points to consider.
Spread
Because currencies, unlike futures and stocks, are not traded through a central exchange, the spread can be different depending on the broker you use, so it's well worth checking a few out before you open an account. Most forex brokers publish live or delayed prices on their websites so you can compare spreads, but check if the spread is fixed or variable. A fixed spread means exactly that - it will always be the same no matter what time of day or night it is. Some brokers use a variable spread, which might appear to be nice and small when the market is quiet, but when things get busy they can widen the spread which means the market must move more in your favor before you start to make a profit. Fixed spreads are generally slightly wider than the variable spreads are when at their narrowest, but over the long term fixed can be safer.
Execution
Some brokers will show live prices on their trading platform, but will they honor them when it comes to pushing the Buy or Sell button? The best way to find out is to open a demo account and give them a test drive. This will also give you the opportunity to see what the speed of execution is like - when you want to buy, you want to buy now, not sit around waiting for ten minutes whilst your order is confirmed!
Trading Platform
Good trading software will show live prices that you can actually trade at, not just indicative quotes. It will offer Limit and Stop orders, and ideally will let you attach these to your entry order. One-Cancels-Other orders are another useful feature - they mean you can set up your trade and then leave the software to get on with it. And the most important feature of all - can you actually understand the platform? Having all the bells and whistles is of no use if you can't use them, so again, get a demo account and give it a go.
Support
Forex is a 24 hour market, so your broker should offer 24 hour support. You might not be trading at 3am, but that could be what time it is in your brokers head office on the other side of the planet, so make sure there will be somebody there to pick up the phone if things go wrong. You should also check if you can close positions over the phone - essential in case your PC or internet connection crash at a critical moment.
Backing
Finally, before opening an account do a little homework and find out about the company. Forex brokers are regulated, but that doesn't mean they all have equal backing. If the market collapses, you want to know that they've got the reserves to cope with it and will still be around when you decide to withdraw your cash. If a broker is elusive when it comes to questions about their parentage and financial backing, then steer clear.
In Conclusion
Choosing a forex broker isn't difficult, but don't rush the decision. Check out a few, and always get a demo account first to make sure you're happy with the way everything works before sending off your opening balance.
About The Author
Geoff Turnbull is a full time day trader, and a contributor to http://www.forexheaven.com
Article Source: http://EzineArticles.com/?expert=Geoff_Turnbull http://EzineArticles.com/?Choosing-A-Forex-Broker&id=11859
By [http://ezinearticles.com/?expert=Geoff_Turnbull]Geoff Turnbull
With currency trading becoming ever more popular, the number of brokers is growing at a rapid rate. What should one look at when deciding which broker to open an account with? These are the important points to consider.
Spread
Because currencies, unlike futures and stocks, are not traded through a central exchange, the spread can be different depending on the broker you use, so it's well worth checking a few out before you open an account. Most forex brokers publish live or delayed prices on their websites so you can compare spreads, but check if the spread is fixed or variable. A fixed spread means exactly that - it will always be the same no matter what time of day or night it is. Some brokers use a variable spread, which might appear to be nice and small when the market is quiet, but when things get busy they can widen the spread which means the market must move more in your favor before you start to make a profit. Fixed spreads are generally slightly wider than the variable spreads are when at their narrowest, but over the long term fixed can be safer.
Execution
Some brokers will show live prices on their trading platform, but will they honor them when it comes to pushing the Buy or Sell button? The best way to find out is to open a demo account and give them a test drive. This will also give you the opportunity to see what the speed of execution is like - when you want to buy, you want to buy now, not sit around waiting for ten minutes whilst your order is confirmed!
Trading Platform
Good trading software will show live prices that you can actually trade at, not just indicative quotes. It will offer Limit and Stop orders, and ideally will let you attach these to your entry order. One-Cancels-Other orders are another useful feature - they mean you can set up your trade and then leave the software to get on with it. And the most important feature of all - can you actually understand the platform? Having all the bells and whistles is of no use if you can't use them, so again, get a demo account and give it a go.
Support
Forex is a 24 hour market, so your broker should offer 24 hour support. You might not be trading at 3am, but that could be what time it is in your brokers head office on the other side of the planet, so make sure there will be somebody there to pick up the phone if things go wrong. You should also check if you can close positions over the phone - essential in case your PC or internet connection crash at a critical moment.
Backing
Finally, before opening an account do a little homework and find out about the company. Forex brokers are regulated, but that doesn't mean they all have equal backing. If the market collapses, you want to know that they've got the reserves to cope with it and will still be around when you decide to withdraw your cash. If a broker is elusive when it comes to questions about their parentage and financial backing, then steer clear.
In Conclusion
Choosing a forex broker isn't difficult, but don't rush the decision. Check out a few, and always get a demo account first to make sure you're happy with the way everything works before sending off your opening balance.
About The Author
Geoff Turnbull is a full time day trader, and a contributor to http://www.forexheaven.com
Article Source: http://EzineArticles.com/?expert=Geoff_Turnbull http://EzineArticles.com/?Choosing-A-Forex-Broker&id=11859
What is a Forex Broker?
What is a Forex Broker?
By [http://ezinearticles.com/?expert=Eddie_Tobey]Eddie Tobey
The Currency / Foreign Exchange market is the world’s largest and most dynamic market. Nearly $1.8 trillion is traded every day. The word Forex is derived from the words Foreign Exchange.
A Broker is an individual or firm that acts as an intermediary between buyer and seller. Forex brokers are firms that deal in foreign exchange. The foreign exchange market is quite similar to the equity markets, except that typical forex brokers do not charge a commission. However, forex brokers are required to have a license.
Forex brokers earn money from the spread (also called “pip”). The spread is the difference between the prices at which a currency is bought and sold. A pip is the smallest price increment in a currency. For example, in Euro/US Dollar (EUR/USD), a move from 0.9008 to 0.9009 is one pip. In US Dollar/Japanese Yen (USD/JPY), a move from 127.41 to 127.42 is one pip.
Forex brokers can be compared on the basis of the spread they charge. Most forex brokers publish live or delayed prices on their websites so that the investor can compare the spreads. It is, however, necessary to check if the spread is fixed or variable. Variable spreads appear small and attractive when the market is quiet, but when the market gets busy the forex broker widens the spread, meaning that the investor will gain only if the market is favorable.
Forex brokers are usually tied to large banks or lending institutions. This is because of the huge sums of money traded in the foreign exchange markets. Forex brokers are required to register with the Futures Commission Merchant (FCM), and are regulated by the Commodity Futures Trading Commission (CFTC).
A new trend among forex brokers is the emergence of online forex brokers, who offer trading facilities to “retail traders” using advanced technology. With these facilities, anyone with a computer and an Internet connection can trade in the forex markets. [http://www.WetPluto.com/A-Comprehensive-Forex-Broker-Register.html]Forex Broker Info provides detailed information on forex brokers, forex trading and market makers, and other forex-related topics. Forex Broker Info is the sister site of [http://www.WetPluto.com/The-Benefits-of-Incorporating-in-Florida.html]Incorporating in Florida Web
Article Source: http://EzineArticles.com/?expert=Eddie_Tobey http://EzineArticles.com/?What-is-a-Forex-Broker?&id=68681
By [http://ezinearticles.com/?expert=Eddie_Tobey]Eddie Tobey
The Currency / Foreign Exchange market is the world’s largest and most dynamic market. Nearly $1.8 trillion is traded every day. The word Forex is derived from the words Foreign Exchange.
A Broker is an individual or firm that acts as an intermediary between buyer and seller. Forex brokers are firms that deal in foreign exchange. The foreign exchange market is quite similar to the equity markets, except that typical forex brokers do not charge a commission. However, forex brokers are required to have a license.
Forex brokers earn money from the spread (also called “pip”). The spread is the difference between the prices at which a currency is bought and sold. A pip is the smallest price increment in a currency. For example, in Euro/US Dollar (EUR/USD), a move from 0.9008 to 0.9009 is one pip. In US Dollar/Japanese Yen (USD/JPY), a move from 127.41 to 127.42 is one pip.
Forex brokers can be compared on the basis of the spread they charge. Most forex brokers publish live or delayed prices on their websites so that the investor can compare the spreads. It is, however, necessary to check if the spread is fixed or variable. Variable spreads appear small and attractive when the market is quiet, but when the market gets busy the forex broker widens the spread, meaning that the investor will gain only if the market is favorable.
Forex brokers are usually tied to large banks or lending institutions. This is because of the huge sums of money traded in the foreign exchange markets. Forex brokers are required to register with the Futures Commission Merchant (FCM), and are regulated by the Commodity Futures Trading Commission (CFTC).
A new trend among forex brokers is the emergence of online forex brokers, who offer trading facilities to “retail traders” using advanced technology. With these facilities, anyone with a computer and an Internet connection can trade in the forex markets. [http://www.WetPluto.com/A-Comprehensive-Forex-Broker-Register.html]Forex Broker Info provides detailed information on forex brokers, forex trading and market makers, and other forex-related topics. Forex Broker Info is the sister site of [http://www.WetPluto.com/The-Benefits-of-Incorporating-in-Florida.html]Incorporating in Florida Web
Article Source: http://EzineArticles.com/?expert=Eddie_Tobey http://EzineArticles.com/?What-is-a-Forex-Broker?&id=68681
Forex Broker Involvement Optional
Forex Broker Involvement Optional
By [http://ezinearticles.com/?expert=Jay_Moncliff]Jay Moncliff
To trade on the forex market, the largest financial market on the planet, one must use a forex broker. Not unlike a stock broker, a forex broker can also makes suggestions about which moves to make when exchanging foreign currency. Some forex brokers even supply technical analysis to some of their clients and offer tips on research to improve their success as forex traders.
Typically in the forex market a forex broker is a banking institution who may buy up large amounts of a certain currency. For years, banks were the only ones who had access to the forex markets. But today with the Internet, any forex trader, who subscribes with a forex broker, can access the market 24 hours a day.
Today, as with stock brokers, the brick and mortar institutions, such as banks, are less of an option for the individual forex trader who works from home, monitoring the news and gaining insight into certain technical information to help with his or her trading decisions.
Choosing a forex broker may depend on your needs. If you are new to the field, there are houses, or online forex brokers who may cater to your needs, providing in-depth research, ample time to demo their product and so on. Other forex brokers are geared toward the experienced online forex trader. They too offer advice, but may be less likely to offer instructional help with the information, assuming that you may already know how it may or may not benefit you when you read it. It is advisable to read about and even run a demo on several different online forex brokers before going with one.
Jay Moncliff is the founder of [http://www.goforexonline.info]http://www.goforexonline.info; a blog focusing on the latest Forex news, resources and articles. Get detailed
information on [http://www.goforexonline.info]forex
trading
Article Source: http://EzineArticles.com/?expert=Jay_Moncliff http://EzineArticles.com/?Forex-Broker-Involvement-Optional&id=56020
By [http://ezinearticles.com/?expert=Jay_Moncliff]Jay Moncliff
To trade on the forex market, the largest financial market on the planet, one must use a forex broker. Not unlike a stock broker, a forex broker can also makes suggestions about which moves to make when exchanging foreign currency. Some forex brokers even supply technical analysis to some of their clients and offer tips on research to improve their success as forex traders.
Typically in the forex market a forex broker is a banking institution who may buy up large amounts of a certain currency. For years, banks were the only ones who had access to the forex markets. But today with the Internet, any forex trader, who subscribes with a forex broker, can access the market 24 hours a day.
Today, as with stock brokers, the brick and mortar institutions, such as banks, are less of an option for the individual forex trader who works from home, monitoring the news and gaining insight into certain technical information to help with his or her trading decisions.
Choosing a forex broker may depend on your needs. If you are new to the field, there are houses, or online forex brokers who may cater to your needs, providing in-depth research, ample time to demo their product and so on. Other forex brokers are geared toward the experienced online forex trader. They too offer advice, but may be less likely to offer instructional help with the information, assuming that you may already know how it may or may not benefit you when you read it. It is advisable to read about and even run a demo on several different online forex brokers before going with one.
Jay Moncliff is the founder of [http://www.goforexonline.info]http://www.goforexonline.info; a blog focusing on the latest Forex news, resources and articles. Get detailed
information on [http://www.goforexonline.info]forex
trading
Article Source: http://EzineArticles.com/?expert=Jay_Moncliff http://EzineArticles.com/?Forex-Broker-Involvement-Optional&id=56020
Forex Brokers - Helping to Maximize Your Success
Forex Brokers - Helping to Maximize Your Success
By [http://ezinearticles.com/?expert=Anthony_Trister]Anthony Trister
A Forex broker is a broker dealing in foreign exchange, just like real estate broker who deals in real estate and properties. Simply, a Forex broker is an advisor who advises you about the forex market. However, the Forex market is not the perfect place to play with as a novice and beginner as there are many criticalities involved along with much risk bearing capacities. Novices can very quickly get their fingers badly burnt. But inexperience is not the only reason to consider using a Forex broker to trade in the high-risk international currencies market.
So, the Forex broker is an advisor who advises you about the forex market and allows you to work for 24 hours a day with major currencies like EUR, JPY, GBP, CHF etc against the US dollar on the spot, i.e. according to the current prices on the forex international exchange market. But the level of profits depends only on your abilities as well as your timely decision.
Although the role of the Forex broker is relatively redundant as a result of technological advancement and increased awareness, we cannot completely underestimate his role. The new paradigm shift has had something of a democratizing effect on the financial markets, and in the years that have followed a plethora of banks and brokerages have extended the range of their services to a new market by packaging up their online trading systems for the retail market, enabling the more modest investor to trade from their own computer screen - even on the previously out-of-reach currency markets. This is where the real role of Forex broker starts.
PIP is nothing special but Price Interest Points. In the forex market, currencies are always priced in pairs. The quoted price is the level where we, acting as the market maker, are willing to buy/sell the currency pair. In the wholesale market, currencies are quoted out to four decimal places, with the last placeholder called a point or a pip. A pip in most currencies is one /10,000th of an exchange rate (in USD/JPY, it is one /100th, likewise you can find for others).
Let’s see some more information about Spread. As with all financial products, forex quotes include terms like 'bid' and 'ask”'. The 'bid', in its simplest terms is the price at which a dealer is willing to buy (and clients can sell) the base currency in exchange for the counter currency. The 'ask' is the price at which dealer will sell (and clients can buy) the base currency in exchange for the counter currency. The difference between the bid and the ask price is referred to as the spread. The spread defines the trader’s cost, which can be recovered with a favorable currency move in the market. The value of a pip is determined by the pair of currencies being traded, the rate at which the currency pair is trading and the size of the position being traded.
There are many great Forex brokers, like COESfx, who maintains tight, competitive spreads in the four major currencies against the Dollar, and a total of 17 currency pairs including USD/CAD and AUD/USD. Some of the major features of COESfx are:
Real-time streaming prices
Price certainty on market orders
Competitive pricing
Fixed 3-5 pip spreads
For details, about this forex broker as well as their offerings, please visit: http://www.coesfx.com.
Anthony Trister is a currency trader and is an owner of OneDayTrades which offers free, mechanical forex signals and an automated trading program for those wanting to trade forex. Free access available here: http://www.onedaytrades.com
Article Source: http://EzineArticles.com/?expert=Anthony_Trister http://EzineArticles.com/?Forex-Brokers---Helping-to-Maximize-Your-Success&id=58733
By [http://ezinearticles.com/?expert=Anthony_Trister]Anthony Trister
A Forex broker is a broker dealing in foreign exchange, just like real estate broker who deals in real estate and properties. Simply, a Forex broker is an advisor who advises you about the forex market. However, the Forex market is not the perfect place to play with as a novice and beginner as there are many criticalities involved along with much risk bearing capacities. Novices can very quickly get their fingers badly burnt. But inexperience is not the only reason to consider using a Forex broker to trade in the high-risk international currencies market.
So, the Forex broker is an advisor who advises you about the forex market and allows you to work for 24 hours a day with major currencies like EUR, JPY, GBP, CHF etc against the US dollar on the spot, i.e. according to the current prices on the forex international exchange market. But the level of profits depends only on your abilities as well as your timely decision.
Although the role of the Forex broker is relatively redundant as a result of technological advancement and increased awareness, we cannot completely underestimate his role. The new paradigm shift has had something of a democratizing effect on the financial markets, and in the years that have followed a plethora of banks and brokerages have extended the range of their services to a new market by packaging up their online trading systems for the retail market, enabling the more modest investor to trade from their own computer screen - even on the previously out-of-reach currency markets. This is where the real role of Forex broker starts.
PIP is nothing special but Price Interest Points. In the forex market, currencies are always priced in pairs. The quoted price is the level where we, acting as the market maker, are willing to buy/sell the currency pair. In the wholesale market, currencies are quoted out to four decimal places, with the last placeholder called a point or a pip. A pip in most currencies is one /10,000th of an exchange rate (in USD/JPY, it is one /100th, likewise you can find for others).
Let’s see some more information about Spread. As with all financial products, forex quotes include terms like 'bid' and 'ask”'. The 'bid', in its simplest terms is the price at which a dealer is willing to buy (and clients can sell) the base currency in exchange for the counter currency. The 'ask' is the price at which dealer will sell (and clients can buy) the base currency in exchange for the counter currency. The difference between the bid and the ask price is referred to as the spread. The spread defines the trader’s cost, which can be recovered with a favorable currency move in the market. The value of a pip is determined by the pair of currencies being traded, the rate at which the currency pair is trading and the size of the position being traded.
There are many great Forex brokers, like COESfx, who maintains tight, competitive spreads in the four major currencies against the Dollar, and a total of 17 currency pairs including USD/CAD and AUD/USD. Some of the major features of COESfx are:
Real-time streaming prices
Price certainty on market orders
Competitive pricing
Fixed 3-5 pip spreads
For details, about this forex broker as well as their offerings, please visit: http://www.coesfx.com.
Anthony Trister is a currency trader and is an owner of OneDayTrades which offers free, mechanical forex signals and an automated trading program for those wanting to trade forex. Free access available here: http://www.onedaytrades.com
Article Source: http://EzineArticles.com/?expert=Anthony_Trister http://EzineArticles.com/?Forex-Brokers---Helping-to-Maximize-Your-Success&id=58733
Forex Brokers - Helping to Maximize Your Success
Forex Brokers - Helping to Maximize Your Success
By [http://ezinearticles.com/?expert=Anthony_Trister]Anthony Trister
A Forex broker is a broker dealing in foreign exchange, just like real estate broker who deals in real estate and properties. Simply, a Forex broker is an advisor who advises you about the forex market. However, the Forex market is not the perfect place to play with as a novice and beginner as there are many criticalities involved along with much risk bearing capacities. Novices can very quickly get their fingers badly burnt. But inexperience is not the only reason to consider using a Forex broker to trade in the high-risk international currencies market.
So, the Forex broker is an advisor who advises you about the forex market and allows you to work for 24 hours a day with major currencies like EUR, JPY, GBP, CHF etc against the US dollar on the spot, i.e. according to the current prices on the forex international exchange market. But the level of profits depends only on your abilities as well as your timely decision.
Although the role of the Forex broker is relatively redundant as a result of technological advancement and increased awareness, we cannot completely underestimate his role. The new paradigm shift has had something of a democratizing effect on the financial markets, and in the years that have followed a plethora of banks and brokerages have extended the range of their services to a new market by packaging up their online trading systems for the retail market, enabling the more modest investor to trade from their own computer screen - even on the previously out-of-reach currency markets. This is where the real role of Forex broker starts.
PIP is nothing special but Price Interest Points. In the forex market, currencies are always priced in pairs. The quoted price is the level where we, acting as the market maker, are willing to buy/sell the currency pair. In the wholesale market, currencies are quoted out to four decimal places, with the last placeholder called a point or a pip. A pip in most currencies is one /10,000th of an exchange rate (in USD/JPY, it is one /100th, likewise you can find for others).
Let’s see some more information about Spread. As with all financial products, forex quotes include terms like 'bid' and 'ask”'. The 'bid', in its simplest terms is the price at which a dealer is willing to buy (and clients can sell) the base currency in exchange for the counter currency. The 'ask' is the price at which dealer will sell (and clients can buy) the base currency in exchange for the counter currency. The difference between the bid and the ask price is referred to as the spread. The spread defines the trader’s cost, which can be recovered with a favorable currency move in the market. The value of a pip is determined by the pair of currencies being traded, the rate at which the currency pair is trading and the size of the position being traded.
There are many great Forex brokers, like COESfx, who maintains tight, competitive spreads in the four major currencies against the Dollar, and a total of 17 currency pairs including USD/CAD and AUD/USD. Some of the major features of COESfx are:
Real-time streaming prices
Price certainty on market orders
Competitive pricing
Fixed 3-5 pip spreads
For details, about this forex broker as well as their offerings, please visit: http://www.coesfx.com.
Anthony Trister is a currency trader and is an owner of OneDayTrades which offers free, mechanical forex signals and an automated trading program for those wanting to trade forex. Free access available here: http://www.onedaytrades.com
Article Source: http://EzineArticles.com/?expert=Anthony_Trister http://EzineArticles.com/?Forex-Brokers---Helping-to-Maximize-Your-Success&id=58733
By [http://ezinearticles.com/?expert=Anthony_Trister]Anthony Trister
A Forex broker is a broker dealing in foreign exchange, just like real estate broker who deals in real estate and properties. Simply, a Forex broker is an advisor who advises you about the forex market. However, the Forex market is not the perfect place to play with as a novice and beginner as there are many criticalities involved along with much risk bearing capacities. Novices can very quickly get their fingers badly burnt. But inexperience is not the only reason to consider using a Forex broker to trade in the high-risk international currencies market.
So, the Forex broker is an advisor who advises you about the forex market and allows you to work for 24 hours a day with major currencies like EUR, JPY, GBP, CHF etc against the US dollar on the spot, i.e. according to the current prices on the forex international exchange market. But the level of profits depends only on your abilities as well as your timely decision.
Although the role of the Forex broker is relatively redundant as a result of technological advancement and increased awareness, we cannot completely underestimate his role. The new paradigm shift has had something of a democratizing effect on the financial markets, and in the years that have followed a plethora of banks and brokerages have extended the range of their services to a new market by packaging up their online trading systems for the retail market, enabling the more modest investor to trade from their own computer screen - even on the previously out-of-reach currency markets. This is where the real role of Forex broker starts.
PIP is nothing special but Price Interest Points. In the forex market, currencies are always priced in pairs. The quoted price is the level where we, acting as the market maker, are willing to buy/sell the currency pair. In the wholesale market, currencies are quoted out to four decimal places, with the last placeholder called a point or a pip. A pip in most currencies is one /10,000th of an exchange rate (in USD/JPY, it is one /100th, likewise you can find for others).
Let’s see some more information about Spread. As with all financial products, forex quotes include terms like 'bid' and 'ask”'. The 'bid', in its simplest terms is the price at which a dealer is willing to buy (and clients can sell) the base currency in exchange for the counter currency. The 'ask' is the price at which dealer will sell (and clients can buy) the base currency in exchange for the counter currency. The difference between the bid and the ask price is referred to as the spread. The spread defines the trader’s cost, which can be recovered with a favorable currency move in the market. The value of a pip is determined by the pair of currencies being traded, the rate at which the currency pair is trading and the size of the position being traded.
There are many great Forex brokers, like COESfx, who maintains tight, competitive spreads in the four major currencies against the Dollar, and a total of 17 currency pairs including USD/CAD and AUD/USD. Some of the major features of COESfx are:
Real-time streaming prices
Price certainty on market orders
Competitive pricing
Fixed 3-5 pip spreads
For details, about this forex broker as well as their offerings, please visit: http://www.coesfx.com.
Anthony Trister is a currency trader and is an owner of OneDayTrades which offers free, mechanical forex signals and an automated trading program for those wanting to trade forex. Free access available here: http://www.onedaytrades.com
Article Source: http://EzineArticles.com/?expert=Anthony_Trister http://EzineArticles.com/?Forex-Brokers---Helping-to-Maximize-Your-Success&id=58733
Why Forex Traders Plan To Fail Before They Even Place Their First Trade & How You Can Know It & ...
Why Forex Traders Plan To Fail Before They Even Place Their First Trade & How You Can Know It & ...
By [http://ezinearticles.com/?expert=Ryan_Sheehy]Ryan Sheehy
Have you heard the wise saying that a trader who fails to plan, plans to fail? I have, and I was once that trader! However, did you know that even though traders who have constructed a plan, which incorporates their trading stategy (their "edge"), they have a plan that is likely to fail?
If we look at all traders who participate in the market: we have one group that fails to plan and therefore plans to fail; another group whose plan is failed; and a third group who properly plans and therefore does not fail.
Is it any wonder that the success rate for forex traders is so slim?
Well it doesn't have to be.
Here's a list of reasons why those whose plan is destined for failure fail:
1. They become emotionally attached to their ideas about how the market should be with minimal or inadequate testing;
2. They fall in love with their back-tested net profit results without fully understanding other key statistical data;
3. They don't admit they're plan is wrong.
Let's explore each point in a little more detail.
1. Becoming emotionally attached to your ideas without adequate results
Most new traders when they realize the importance of obtaining a trading plan and sticking to that plan immediately begin to use the knowledge they have been taught and haphazardly throw it all together into what they deem their "trading plan".
When they are questioned on whether they have a trading plan most of these traders answer with an unequivocal "Yes!".
Most of these traders are destined for failure because their strategy is untested. They rely on blind faith to guide them through the trading jungle to make their untold millions. Would you walk from one length of the Amazon jungle to the other blind-folded? Of course not! You'll have to watch out for all the snakes, tarantulas, and other creepy things that go bump in the night, so why would you approach trading in the same fashion? I mean all you're really doing is placing the blind-fold on your capital!
Why do traders do this?
Because it's easy. That's right... it's easy. They don't need to learn a computer language to type their system into some piece of software that will take them the better part of 6 months to a year to learn, and they don't have to spend any money on buying historical data. Therefore it's easy and it's cheap and it also conserves time!
So does success meet lazy people like this?
Not many! However I will admit that it does meet a fortunate few - only those lucky enough to start their trading during roaring markets where even a monkey can make money! To repeat again: don't wear the blind-fold. Your success may be great at the start, but given time and trades, you'll be the one out of the game - having depleted all your capital.
So what do you do if you KNOW that your method is untested?
If you have the time, the money and the learning capacity I would strongly encourage you to purchase some back-testing software (such as [http://www.wealth-lab.com]Wealth-Lab Developer), acquire some [http://www.currencysecrets.com/data.php]forex data, ask heaps of questions on the Wealth-Lab forum on how to code your ideas and within 3-6 months you'll be safely coding your own forex system and testing adequately.
If you do not have the time, the money nor the learning capacity I would strongly suggest that you manually write down your system into clearly defined steps that you MUST follow. Then, after opening a DEMO forex account you would trade your system according to the rules you have set out. Trading your rules until about 20 trades have been completed.
After traders obtain their results from their testing period they unfortunately look at only one figure and make a rash conclusion about the system based on that one performance figure, namely, the net profit. This then leads us into the next problem of why traders plans are failed prior to placing their first live trade...
2. They fall in love with the net profit result and no longer question it any further!
The net profit is only one statistic among thousands, however, to keep things simple we will look at the top 3 results that you need to make sure you fully understand.
Here are the other statistical pieces of data that you should look at when your system has completed its testing period:
I. How many trades did it have? If you have made a nice profit, but have only had 3 trades during the testing period you do not have a sufficient sample space to arrive at any safe conclusions. Can you imagine what would happen to Neil Armstrong if NASA had only done 3 computations on how they would arrive on the moon??!! If it's not good for NASA then it's probably not good for you either, however, as NASA do zillions of computations you would only need to conduct about 20 trades as the bare minimum before you can arrive at any safe conclusions;
II. What was your money management procedure during the testing phase? This is by far the most important point, however, you need to make sure your system is properly working prior to even embarking on this difficult area (hence the reason why it is a CLOSE second to the above point). Be sure you fully understand what I am about to explain (read it several times to absorb it if need be)...
If you test a method whereby you rely on a percentage amount of capital on a trade you can be biasing your results!
How?
Let us look at the following comparison sheet where we plot 21 trades with their pip return (we'll assume that each pip = US$1), and compare the returns against using 10 contracts per trade, 10% capital per trade, or 2% risk per trade... [http://www.currencysecrets.com/images/trade_sheet.gif ]Example Trade Sheet
Now as you can see from the results they can easily be doctored according to the different type of money management technique you use and what variable you decide to use it on (i.e. who is to say that we not use 20 contracts per trade, or 20% capital, or 5% risk per trade - all of these would inflate the net return figures).
It is best when you trade to stay at a fixed quantity. If you use any results that require a percentage calculation of the equity balance prior to the trade quantity being calculated you will BIAS the last trades more than the trades at the start. Hence, using a fixed quantity throughout the entire sample is one of the true indications of whether your system is profitable or not.
III. What was the drawdown? This is the largest peak to trough distance on your equity curve. In other words, if you were to enter in on the day the equity curve made a peak, how much would you have lost if you bailed out at the lowest point? To test this manually you would obtain an equity curve peak trace how far the equity curve goes down until it moves higher that the peak you started from - the lowest point made between these two points will be your trough figure which you will then subtract from your starting peak figure. The figure with the largest % loss would be your drawdown.
You would then need to look at this drawdown figure and determine whether or not it fits your risk profile. Would you be okay mentally if your account was down the drawdown % figure? If not, then you're going to have to re-create another system. As a rule I don't like systems that generate more than 30% drawdown.
One other statistic that incorporates drawdown that I like to check to determine whether the system is profitable or not is the recovery factor. The recovery factor divides the net profit by the drawdown (without the negative sign). As an example, if the net profit were $5,659 and the drawdown were -$3,542 dividing the net profit by the drawdown would result in a recovery factor of 1.597 (get rid of the minus sign). I generally prefer systems to have this statistic above 3.
So even though we have created our system that fits our personality and risk tolerance level well trades can still fail by not heeding the third and final statement...
3. Don't fall in love with the system
Most traders once they have designed a system cannot believe that their system is making a loss, or worse yet, a loss greater than the system's historical drawdown.
So, to combat this they dig their head in the sand hoping that the problem will go away. Just as trades fall in love with their position, at their own peril, falling in love with their system is also to their detriment.
Treat this as a business with your system as one of your salesmen. If the salesman is costing more than he is bringing in then you need to fire him and find another one.
How do you know if your system is no good?
As a rule I look at the historical drawdown of my system and add 10%. As an example, if my system had historical drawdown of 20% once the system reached 20% x 1.1 = 22% I would stop trading this system and move onto another. And sometimes you can still trade the same system, just with different variables, or a minor tweak.
Be sure that you fully understand the implications presented to you in this article. Trading is a business, therefore conduct it like one, as it is one of the most difficult endeavors you could ever undertake.
Ryan Sheehy is the author of [http://www.currencysecrets.com]Currency Secrets.com and [http://www.forexzoo.com]Forex Zoo
Article Source: http://EzineArticles.com/?expert=Ryan_Sheehy http://EzineArticles.com/?Why-Forex-Traders-Plan-To-Fail-Before-They-Even-Place-Their-First-Trade-and-How-You-Can-Know-It-and-...&id=6916
By [http://ezinearticles.com/?expert=Ryan_Sheehy]Ryan Sheehy
Have you heard the wise saying that a trader who fails to plan, plans to fail? I have, and I was once that trader! However, did you know that even though traders who have constructed a plan, which incorporates their trading stategy (their "edge"), they have a plan that is likely to fail?
If we look at all traders who participate in the market: we have one group that fails to plan and therefore plans to fail; another group whose plan is failed; and a third group who properly plans and therefore does not fail.
Is it any wonder that the success rate for forex traders is so slim?
Well it doesn't have to be.
Here's a list of reasons why those whose plan is destined for failure fail:
1. They become emotionally attached to their ideas about how the market should be with minimal or inadequate testing;
2. They fall in love with their back-tested net profit results without fully understanding other key statistical data;
3. They don't admit they're plan is wrong.
Let's explore each point in a little more detail.
1. Becoming emotionally attached to your ideas without adequate results
Most new traders when they realize the importance of obtaining a trading plan and sticking to that plan immediately begin to use the knowledge they have been taught and haphazardly throw it all together into what they deem their "trading plan".
When they are questioned on whether they have a trading plan most of these traders answer with an unequivocal "Yes!".
Most of these traders are destined for failure because their strategy is untested. They rely on blind faith to guide them through the trading jungle to make their untold millions. Would you walk from one length of the Amazon jungle to the other blind-folded? Of course not! You'll have to watch out for all the snakes, tarantulas, and other creepy things that go bump in the night, so why would you approach trading in the same fashion? I mean all you're really doing is placing the blind-fold on your capital!
Why do traders do this?
Because it's easy. That's right... it's easy. They don't need to learn a computer language to type their system into some piece of software that will take them the better part of 6 months to a year to learn, and they don't have to spend any money on buying historical data. Therefore it's easy and it's cheap and it also conserves time!
So does success meet lazy people like this?
Not many! However I will admit that it does meet a fortunate few - only those lucky enough to start their trading during roaring markets where even a monkey can make money! To repeat again: don't wear the blind-fold. Your success may be great at the start, but given time and trades, you'll be the one out of the game - having depleted all your capital.
So what do you do if you KNOW that your method is untested?
If you have the time, the money and the learning capacity I would strongly encourage you to purchase some back-testing software (such as [http://www.wealth-lab.com]Wealth-Lab Developer), acquire some [http://www.currencysecrets.com/data.php]forex data, ask heaps of questions on the Wealth-Lab forum on how to code your ideas and within 3-6 months you'll be safely coding your own forex system and testing adequately.
If you do not have the time, the money nor the learning capacity I would strongly suggest that you manually write down your system into clearly defined steps that you MUST follow. Then, after opening a DEMO forex account you would trade your system according to the rules you have set out. Trading your rules until about 20 trades have been completed.
After traders obtain their results from their testing period they unfortunately look at only one figure and make a rash conclusion about the system based on that one performance figure, namely, the net profit. This then leads us into the next problem of why traders plans are failed prior to placing their first live trade...
2. They fall in love with the net profit result and no longer question it any further!
The net profit is only one statistic among thousands, however, to keep things simple we will look at the top 3 results that you need to make sure you fully understand.
Here are the other statistical pieces of data that you should look at when your system has completed its testing period:
I. How many trades did it have? If you have made a nice profit, but have only had 3 trades during the testing period you do not have a sufficient sample space to arrive at any safe conclusions. Can you imagine what would happen to Neil Armstrong if NASA had only done 3 computations on how they would arrive on the moon??!! If it's not good for NASA then it's probably not good for you either, however, as NASA do zillions of computations you would only need to conduct about 20 trades as the bare minimum before you can arrive at any safe conclusions;
II. What was your money management procedure during the testing phase? This is by far the most important point, however, you need to make sure your system is properly working prior to even embarking on this difficult area (hence the reason why it is a CLOSE second to the above point). Be sure you fully understand what I am about to explain (read it several times to absorb it if need be)...
If you test a method whereby you rely on a percentage amount of capital on a trade you can be biasing your results!
How?
Let us look at the following comparison sheet where we plot 21 trades with their pip return (we'll assume that each pip = US$1), and compare the returns against using 10 contracts per trade, 10% capital per trade, or 2% risk per trade... [http://www.currencysecrets.com/images/trade_sheet.gif ]Example Trade Sheet
Now as you can see from the results they can easily be doctored according to the different type of money management technique you use and what variable you decide to use it on (i.e. who is to say that we not use 20 contracts per trade, or 20% capital, or 5% risk per trade - all of these would inflate the net return figures).
It is best when you trade to stay at a fixed quantity. If you use any results that require a percentage calculation of the equity balance prior to the trade quantity being calculated you will BIAS the last trades more than the trades at the start. Hence, using a fixed quantity throughout the entire sample is one of the true indications of whether your system is profitable or not.
III. What was the drawdown? This is the largest peak to trough distance on your equity curve. In other words, if you were to enter in on the day the equity curve made a peak, how much would you have lost if you bailed out at the lowest point? To test this manually you would obtain an equity curve peak trace how far the equity curve goes down until it moves higher that the peak you started from - the lowest point made between these two points will be your trough figure which you will then subtract from your starting peak figure. The figure with the largest % loss would be your drawdown.
You would then need to look at this drawdown figure and determine whether or not it fits your risk profile. Would you be okay mentally if your account was down the drawdown % figure? If not, then you're going to have to re-create another system. As a rule I don't like systems that generate more than 30% drawdown.
One other statistic that incorporates drawdown that I like to check to determine whether the system is profitable or not is the recovery factor. The recovery factor divides the net profit by the drawdown (without the negative sign). As an example, if the net profit were $5,659 and the drawdown were -$3,542 dividing the net profit by the drawdown would result in a recovery factor of 1.597 (get rid of the minus sign). I generally prefer systems to have this statistic above 3.
So even though we have created our system that fits our personality and risk tolerance level well trades can still fail by not heeding the third and final statement...
3. Don't fall in love with the system
Most traders once they have designed a system cannot believe that their system is making a loss, or worse yet, a loss greater than the system's historical drawdown.
So, to combat this they dig their head in the sand hoping that the problem will go away. Just as trades fall in love with their position, at their own peril, falling in love with their system is also to their detriment.
Treat this as a business with your system as one of your salesmen. If the salesman is costing more than he is bringing in then you need to fire him and find another one.
How do you know if your system is no good?
As a rule I look at the historical drawdown of my system and add 10%. As an example, if my system had historical drawdown of 20% once the system reached 20% x 1.1 = 22% I would stop trading this system and move onto another. And sometimes you can still trade the same system, just with different variables, or a minor tweak.
Be sure that you fully understand the implications presented to you in this article. Trading is a business, therefore conduct it like one, as it is one of the most difficult endeavors you could ever undertake.
Ryan Sheehy is the author of [http://www.currencysecrets.com]Currency Secrets.com and [http://www.forexzoo.com]Forex Zoo
Article Source: http://EzineArticles.com/?expert=Ryan_Sheehy http://EzineArticles.com/?Why-Forex-Traders-Plan-To-Fail-Before-They-Even-Place-Their-First-Trade-and-How-You-Can-Know-It-and-...&id=6916
9 Tips For Becoming a Profitable Forex Trader
9 Tips For Becoming a Profitable Forex Trader
By [http://ezinearticles.com/?expert=Jeff_Wilde]Jeff Wilde
Regardless of your trading style; day trading, swing trading, or position trading there is a simple step by step plan you can use to improve your odds for success.
1. Start by paper trading until you can be consistently profitable on paper. I would also recommend doing a lot of practice trading with a real-time demo account. This is the next best thing to real trading without risking money.
2. Regardless of how much money you have, start trading with a small amount of money and work up over time. You need to make all your mistakes with the smallest amount of money. Trust me, it will be a lot less painful!
3. If you are a day trader, avoid the very small time-frames like 1 or 2 minute as you get a lot of signals which can lead to over trading. These fast time-frames are full of market noise and insignificant price activity.
4. Make sure that all your entry criteria are met for the trade setup. Don't jump the gun until everything is in place.
5. If there are no clear signals in the market, then do nothing. Forcing trades almost always ends up with losses.
6. Always place your protective stop immediately after entering the trade!
7. In your studies you will be exposed to many techniques. You will improve your results by concentrating on only one or two strategies. Get real good and consistently profitable with them first.
8. Don't watch too many currencies at one time. This leads to too much confusion and indecision about which trade to take. I wouls stick to two or three of the major currency pairs.
9. Win, lose or draw don’t deviate from your strategies or change things.
These 9 points may seem very simple, but they are actually very hard to carry out as they require a lot of focus and discipline. Stick to them and you will trade better than the majority of forex traders out there.
Dr. Jeffrey Wilde, a trading veteran with 16 years of experience is a trading coach to over 3500 traders in 63 countries. His new blog http://www.askjeffwilde.com offers free trading articles, tips and advice. He also teaches a variety of courses found at http://www.win-at-trading.com and http://www.fastforexprofits.com
Article Source: http://EzineArticles.com/?expert=Jeff_Wilde http://EzineArticles.com/?9-Tips-For-Becoming-a-Profitable-Forex-Trader&id=6494
By [http://ezinearticles.com/?expert=Jeff_Wilde]Jeff Wilde
Regardless of your trading style; day trading, swing trading, or position trading there is a simple step by step plan you can use to improve your odds for success.
1. Start by paper trading until you can be consistently profitable on paper. I would also recommend doing a lot of practice trading with a real-time demo account. This is the next best thing to real trading without risking money.
2. Regardless of how much money you have, start trading with a small amount of money and work up over time. You need to make all your mistakes with the smallest amount of money. Trust me, it will be a lot less painful!
3. If you are a day trader, avoid the very small time-frames like 1 or 2 minute as you get a lot of signals which can lead to over trading. These fast time-frames are full of market noise and insignificant price activity.
4. Make sure that all your entry criteria are met for the trade setup. Don't jump the gun until everything is in place.
5. If there are no clear signals in the market, then do nothing. Forcing trades almost always ends up with losses.
6. Always place your protective stop immediately after entering the trade!
7. In your studies you will be exposed to many techniques. You will improve your results by concentrating on only one or two strategies. Get real good and consistently profitable with them first.
8. Don't watch too many currencies at one time. This leads to too much confusion and indecision about which trade to take. I wouls stick to two or three of the major currency pairs.
9. Win, lose or draw don’t deviate from your strategies or change things.
These 9 points may seem very simple, but they are actually very hard to carry out as they require a lot of focus and discipline. Stick to them and you will trade better than the majority of forex traders out there.
Dr. Jeffrey Wilde, a trading veteran with 16 years of experience is a trading coach to over 3500 traders in 63 countries. His new blog http://www.askjeffwilde.com offers free trading articles, tips and advice. He also teaches a variety of courses found at http://www.win-at-trading.com and http://www.fastforexprofits.com
Article Source: http://EzineArticles.com/?expert=Jeff_Wilde http://EzineArticles.com/?9-Tips-For-Becoming-a-Profitable-Forex-Trader&id=6494
Internet and Computer Systems in the FOREX Business
Internet and Computer Systems in the FOREX Business
By [http://ezinearticles.com/?expert=Eric_Cooper]Eric Cooper
With every passing year the interest in electronic trading is bigger, more especially trading shares and currency through Internet. A new profession came forward – this of the currency dealer. The appearance of this profession was caused by the full force of development of Internet, which enabled the exchange business to be carried over at home or at the office. The electronic platforms offered by banks and investment brokers enables all of us to go in the sea of the financial markets and to start living a difference and unknown by this moment way of life.
The development of the computer technologies, the program security and the telecommunications, as the same as the grown experience, raises the qualification level of the brokers. It it’s turn this raises the belief of the brokers in their own abilities to benefit and to lower the risk while operating. That’s why the higher level of the trading qualification leads to a higher level of trade amount.
The introducing of automated dealing systems at the eighties, as the same as co-coordinating systems in the beginning of the internet trading at the end of the nineties, entirely changes the standard methods of currency trading. The dealing systems are online computer systems which integrate the banks in a united net while the co-coordinating systems become electronic brokers. The dealing systems are more reliable and much more effective which enables the dealers to realize a bigger number of concurrent transactions. Moreover, they are safer as far as the dealers can observe the executors of the transactions. Thanks to their reliability, speed and safety, the dealing systems are playing cardinal role in the expansion of the currency business.
The using of computers is taking a substantial role at many stages in the realizing of the currency business. In addition to the dealing systems the co-coordinating systems connect together the dealers all over the world in this way building up an electronic brokers market. The new office systems are ensuring a full account report, filling vouchers, keeping secretary work, procedures of lowering the risk and they account the expense for their acquisition. The present-day program products afford an opportunity to be generated all types of graphics, adding theoretically well-grounded technical indicators and favour the dealer for lon lasting using with comparatively low expense.
The using of Internet makes the financial information about the currency markets, currency indexes and prognoses about the rate of exchange, easy accessible all over the world. Now there are many websites with financial information. A big role in the currency trading has the rate exchange. The speed of the electronic post makes it possible getting these prognoses in a moment. If you take out a subscription to such a service, you can get prognoses of rate-exchange by electronic post every day. Such a service you can find at the following address: http://www.iforex.org
Eric Cooper is moderator of Internet Forex Club which provide to it’s members useful forex forecasting and trade recommendation service. You can join the site at the following URL: http://www.iforex.org
Article Source: http://EzineArticles.com/?expert=Eric_Cooper http://EzineArticles.com/?Internet-and-Computer-Systems-in-the-FOREX-Business&id=5435
By [http://ezinearticles.com/?expert=Eric_Cooper]Eric Cooper
With every passing year the interest in electronic trading is bigger, more especially trading shares and currency through Internet. A new profession came forward – this of the currency dealer. The appearance of this profession was caused by the full force of development of Internet, which enabled the exchange business to be carried over at home or at the office. The electronic platforms offered by banks and investment brokers enables all of us to go in the sea of the financial markets and to start living a difference and unknown by this moment way of life.
The development of the computer technologies, the program security and the telecommunications, as the same as the grown experience, raises the qualification level of the brokers. It it’s turn this raises the belief of the brokers in their own abilities to benefit and to lower the risk while operating. That’s why the higher level of the trading qualification leads to a higher level of trade amount.
The introducing of automated dealing systems at the eighties, as the same as co-coordinating systems in the beginning of the internet trading at the end of the nineties, entirely changes the standard methods of currency trading. The dealing systems are online computer systems which integrate the banks in a united net while the co-coordinating systems become electronic brokers. The dealing systems are more reliable and much more effective which enables the dealers to realize a bigger number of concurrent transactions. Moreover, they are safer as far as the dealers can observe the executors of the transactions. Thanks to their reliability, speed and safety, the dealing systems are playing cardinal role in the expansion of the currency business.
The using of computers is taking a substantial role at many stages in the realizing of the currency business. In addition to the dealing systems the co-coordinating systems connect together the dealers all over the world in this way building up an electronic brokers market. The new office systems are ensuring a full account report, filling vouchers, keeping secretary work, procedures of lowering the risk and they account the expense for their acquisition. The present-day program products afford an opportunity to be generated all types of graphics, adding theoretically well-grounded technical indicators and favour the dealer for lon lasting using with comparatively low expense.
The using of Internet makes the financial information about the currency markets, currency indexes and prognoses about the rate of exchange, easy accessible all over the world. Now there are many websites with financial information. A big role in the currency trading has the rate exchange. The speed of the electronic post makes it possible getting these prognoses in a moment. If you take out a subscription to such a service, you can get prognoses of rate-exchange by electronic post every day. Such a service you can find at the following address: http://www.iforex.org
Eric Cooper is moderator of Internet Forex Club which provide to it’s members useful forex forecasting and trade recommendation service. You can join the site at the following URL: http://www.iforex.org
Article Source: http://EzineArticles.com/?expert=Eric_Cooper http://EzineArticles.com/?Internet-and-Computer-Systems-in-the-FOREX-Business&id=5435
5 Questions You Need To Have Answered Before You Back-Test Your Forex System
5 Questions You Need To Have Answered Before You Back-Test Your Forex System
By [http://ezinearticles.com/?expert=Ryan_Sheehy]Ryan Sheehy
As 90-95% of new forex traders lose money within the first 3-6 months this article helps to guide new forex traders by asking 5 questions that the forex trader needs to know prior to back-testing their forex system.
Let us jump right in...
1. What data type are you using (or going to use)?
I know this sounds strange, especially if you have experience from another market such as stocks as their generally is only one type of data source available. However, in the forex market you can have up to 4 different data types: bid, ask, mid and indicative. Each have their own little nuances.
If you would like to know more about the data types then visit the article written about the perils of [http://www.currencysecrets.com/articles/indicative.php]indicative prices. As this will save me from having to repeat the information again and boring those who've already read it.
So, if you know you have indicative prices then you know you're in for some good results! However, if you have any of the other three you need to be careful on how stop and limit orders are placed.
As an example: If we had bid price history and we were looking to place a buy entry stop at 0830 EST according to the day's high, then we know that the bid price will not accurately reflect what the actual price of our order should be. You would have noticed that if you placed a buy entry stop at the exact same price as that of the day's high you would have entered prematurely - you would have entered 4 or 5 pips before the high or the low of the day was touched (the exact same amount as the spread your broker offers!).
This leads me into the next most important question...
2. What spread is your broker offering on the currencies you are bask-testing?
You need to know this as this can help you set your slippage settings on each currency.
As our example in question 1 pointed out. We found that our buy at the day's high method did not exactly work because we bought at the BID PRICE high, not the ASK PRICE high - the price that we need when we place our order TO BUY.
Therefore, we enter in a slippage setting representing the spread that would be exhibited by this trade on this currency.
But knowing at what price to buy is only half the problem... how do we know what quantity to buy?
3. What margin does your broker offer?
If we know at what price to buy our currency at we need to inform our broker on what quantity to buy to fulfill the order. We only know what quantity to buy by the margin that the brokerage firm offers.
Most brokerage firms offer 100:1 leverage, however, some firms offer mini accounts with 200:1 leverage, others only 50:1 leverage.
Find out the margin required.
4. What restrictions does your broker impose?
Now, I don't just mean margin and spread restrictions as I have mentioned above. These are important in their own right, what you need to find out are the details.
This is probably the most important question of all as the fine line between success and failure can be found in the details. Now you can have this questioned by one of two ways:
1. You can find out through experience (generally the most expensive way unless done through the demo account!); or
2. You ask your broker (the cheapest and best way).
Why is this so important? I hear you ask. Well let's say you have a system that trades any gaps that might form on Sunday at 1700 EST, but your broker does not open until 1730 EST. You either need to factor this restriction in to your system, or move onto another system completely. Or, you may have a system that has 10 pip stops, but you find out that your broker will only let you place 15 pip stops from your initial entry price. Once again you will need to change your system to see whether it still performs well, or throw out your system (or change your broker)!
In fact one of the most devastating restrictions imposed by FXCM is that they do not accept stop entry orders if price never happens to trade at your entry stop price! FXCM will honor and "take the loss" of your OPEN stop positions, but if the liquidity is not there and price has shot straight through your stop price then you will miss out. This can have disastrous effects on your system results as you are left wondering on trades where you made good returns - "Would FXCM have got me in?". You may want to [http://www.currencysecrets.com/articles/fxcm.php]read of some of the quirks I use when placing entry stop orders on FXCM that could be of huge benefit to you to help you possibly get around this problem.
The restrictions by your broker are only half your systems' success, you also need to find out about another more important restriction... yourself. This leads me to the final point...
5. What restrictions do you have?
This is a vitally important question. Most people test their systems and fall in love with the results but find when they trade their system they have lost their account and that most of the best signals occurred while they were sound asleep!
As the forex market is a 24 hour market, you need to put into place restrictions in your system that will be realisticly conducted by you during the course of a normal trading day. There is no use operating a trailing stop method that changes your stop points during times when you are asleep and cannot possibly do so.
I hope this article has made you aware of some of the important things that need to be known prior to testing your system.
Article written by Ryan Sheehy from [http://www.currencysecrets.com]Currency Secrets.com. Where you will find reviews on forex data vendors, signal providers, brokers, and popular forex resources, along with more quality articles... all for f*ree!
Article Source: http://EzineArticles.com/?expert=Ryan_Sheehy http://EzineArticles.com/?5-Questions-You-Need-To-Have-Answered-Before-You-Back-Test-Your-Forex-System&id=1290
By [http://ezinearticles.com/?expert=Ryan_Sheehy]Ryan Sheehy
As 90-95% of new forex traders lose money within the first 3-6 months this article helps to guide new forex traders by asking 5 questions that the forex trader needs to know prior to back-testing their forex system.
Let us jump right in...
1. What data type are you using (or going to use)?
I know this sounds strange, especially if you have experience from another market such as stocks as their generally is only one type of data source available. However, in the forex market you can have up to 4 different data types: bid, ask, mid and indicative. Each have their own little nuances.
If you would like to know more about the data types then visit the article written about the perils of [http://www.currencysecrets.com/articles/indicative.php]indicative prices. As this will save me from having to repeat the information again and boring those who've already read it.
So, if you know you have indicative prices then you know you're in for some good results! However, if you have any of the other three you need to be careful on how stop and limit orders are placed.
As an example: If we had bid price history and we were looking to place a buy entry stop at 0830 EST according to the day's high, then we know that the bid price will not accurately reflect what the actual price of our order should be. You would have noticed that if you placed a buy entry stop at the exact same price as that of the day's high you would have entered prematurely - you would have entered 4 or 5 pips before the high or the low of the day was touched (the exact same amount as the spread your broker offers!).
This leads me into the next most important question...
2. What spread is your broker offering on the currencies you are bask-testing?
You need to know this as this can help you set your slippage settings on each currency.
As our example in question 1 pointed out. We found that our buy at the day's high method did not exactly work because we bought at the BID PRICE high, not the ASK PRICE high - the price that we need when we place our order TO BUY.
Therefore, we enter in a slippage setting representing the spread that would be exhibited by this trade on this currency.
But knowing at what price to buy is only half the problem... how do we know what quantity to buy?
3. What margin does your broker offer?
If we know at what price to buy our currency at we need to inform our broker on what quantity to buy to fulfill the order. We only know what quantity to buy by the margin that the brokerage firm offers.
Most brokerage firms offer 100:1 leverage, however, some firms offer mini accounts with 200:1 leverage, others only 50:1 leverage.
Find out the margin required.
4. What restrictions does your broker impose?
Now, I don't just mean margin and spread restrictions as I have mentioned above. These are important in their own right, what you need to find out are the details.
This is probably the most important question of all as the fine line between success and failure can be found in the details. Now you can have this questioned by one of two ways:
1. You can find out through experience (generally the most expensive way unless done through the demo account!); or
2. You ask your broker (the cheapest and best way).
Why is this so important? I hear you ask. Well let's say you have a system that trades any gaps that might form on Sunday at 1700 EST, but your broker does not open until 1730 EST. You either need to factor this restriction in to your system, or move onto another system completely. Or, you may have a system that has 10 pip stops, but you find out that your broker will only let you place 15 pip stops from your initial entry price. Once again you will need to change your system to see whether it still performs well, or throw out your system (or change your broker)!
In fact one of the most devastating restrictions imposed by FXCM is that they do not accept stop entry orders if price never happens to trade at your entry stop price! FXCM will honor and "take the loss" of your OPEN stop positions, but if the liquidity is not there and price has shot straight through your stop price then you will miss out. This can have disastrous effects on your system results as you are left wondering on trades where you made good returns - "Would FXCM have got me in?". You may want to [http://www.currencysecrets.com/articles/fxcm.php]read of some of the quirks I use when placing entry stop orders on FXCM that could be of huge benefit to you to help you possibly get around this problem.
The restrictions by your broker are only half your systems' success, you also need to find out about another more important restriction... yourself. This leads me to the final point...
5. What restrictions do you have?
This is a vitally important question. Most people test their systems and fall in love with the results but find when they trade their system they have lost their account and that most of the best signals occurred while they were sound asleep!
As the forex market is a 24 hour market, you need to put into place restrictions in your system that will be realisticly conducted by you during the course of a normal trading day. There is no use operating a trailing stop method that changes your stop points during times when you are asleep and cannot possibly do so.
I hope this article has made you aware of some of the important things that need to be known prior to testing your system.
Article written by Ryan Sheehy from [http://www.currencysecrets.com]Currency Secrets.com. Where you will find reviews on forex data vendors, signal providers, brokers, and popular forex resources, along with more quality articles... all for f*ree!
Article Source: http://EzineArticles.com/?expert=Ryan_Sheehy http://EzineArticles.com/?5-Questions-You-Need-To-Have-Answered-Before-You-Back-Test-Your-Forex-System&id=1290
How To Choose Diamond Stud Earrings
How To Choose Diamond Stud Earrings
By [http://ezinearticles.com/?expert=Lauren_Stomel]Lauren Stomel
Diamond beauty versus cost: What is the best combination?
Better quality diamonds are more brilliant and beautiful, but they command higher prices as well. This article explains how to find the best value in diamond stud earrings: the brightest diamond for the lowest cost.
For those who can afford it, we recommend an excellent cut diamond of G-H color and "eye-clean" clarity. This is a moderately priced diamond, but earrings of this quality will produce the same dazzling shower of light as those costing thousands of dollars more.
There are three simple reasons: first, it is the excellent cut that breathes life and sparkle into a diamond. Second, most experts agree that a G-H color appears colorless when mounted, so spending more for D-E-F color diamonds isn't necessary. Third,a diamond of SI2 clarity is "eye-clean", meaning it has no flaws visible to the naked eye, but costs a lot less than the higher clarity grades.
Excellent bargains with only a slight compromise in beauty can be found in the I1 Clarity range as well, as long as the cut is good and the color is in the G-H range.
For those who are on a budget, don't feel embarrassed to buy diamonds of a lower quality. All diamond earrings sparkle when they are worn on a woman's ear, and let's face it: for the same price, many women would rather wear 1 carat studs of a lower quality than 1/2 carat studs of a higher quality.
Fast Fact: there are many good websites to purchase [http://www.diamondstudsonly.com]diamond stud earrings. Our top recommendation, however goes to a specialty site [http://www.diamondstudsonly.com]www.diamondstudsonly.com. They sell the same color, clarity and cut grades for about 25% less than the typical "sale" price in a retail jewelry store (and other internet stores), and they back it up with a price comparison tool that allows you to view prices for earrings of the same quality on many other major internet jewelry sites. You will also have the security of their free insurance against loss of any kind for a full year.
Choosing the right Color:
The finest diamonds are colorless, rare and expensive. On the GIA grading scale, D-F are considered colorless, G-I near colorless and any grade J or below shows an increasingly yellowish tinge. Beyond the preference for a whiter stone, however, the color of a diamond does not affect its brightness or sparkle.
Fast Fact: Most experts agree that, when mounted, diamonds in the "G-H" range appear colorless, and represent a much better value than "D-F" stones which command significantly higher prices.
Choosing the right Clarity:
Diamonds with fewer flaws (inclusions) are rare and therefore more highly prized. In many cases, these flaws don't detract from the beauty of the diamond because they are invisible to the naked eye.
Fast Fact: Any grade "SI2" or above has inclusions that are "eye clean", not visible to the naked eye. An "I1" grade can be an excellent value, particularly if the inclusion is on the outer edge. "I2" grades can still exhibit a fair degree of fire and light. "I3" grade diamonds are noticeably more opaque or dark to the naked eye.
Choosing the right Cut:
By [http://ezinearticles.com/?expert=Lauren_Stomel]Lauren Stomel
Diamond beauty versus cost: What is the best combination?
Better quality diamonds are more brilliant and beautiful, but they command higher prices as well. This article explains how to find the best value in diamond stud earrings: the brightest diamond for the lowest cost.
For those who can afford it, we recommend an excellent cut diamond of G-H color and "eye-clean" clarity. This is a moderately priced diamond, but earrings of this quality will produce the same dazzling shower of light as those costing thousands of dollars more.
There are three simple reasons: first, it is the excellent cut that breathes life and sparkle into a diamond. Second, most experts agree that a G-H color appears colorless when mounted, so spending more for D-E-F color diamonds isn't necessary. Third,a diamond of SI2 clarity is "eye-clean", meaning it has no flaws visible to the naked eye, but costs a lot less than the higher clarity grades.
Excellent bargains with only a slight compromise in beauty can be found in the I1 Clarity range as well, as long as the cut is good and the color is in the G-H range.
For those who are on a budget, don't feel embarrassed to buy diamonds of a lower quality. All diamond earrings sparkle when they are worn on a woman's ear, and let's face it: for the same price, many women would rather wear 1 carat studs of a lower quality than 1/2 carat studs of a higher quality.
Fast Fact: there are many good websites to purchase [http://www.diamondstudsonly.com]diamond stud earrings. Our top recommendation, however goes to a specialty site [http://www.diamondstudsonly.com]www.diamondstudsonly.com. They sell the same color, clarity and cut grades for about 25% less than the typical "sale" price in a retail jewelry store (and other internet stores), and they back it up with a price comparison tool that allows you to view prices for earrings of the same quality on many other major internet jewelry sites. You will also have the security of their free insurance against loss of any kind for a full year.
Choosing the right Color:
The finest diamonds are colorless, rare and expensive. On the GIA grading scale, D-F are considered colorless, G-I near colorless and any grade J or below shows an increasingly yellowish tinge. Beyond the preference for a whiter stone, however, the color of a diamond does not affect its brightness or sparkle.
Fast Fact: Most experts agree that, when mounted, diamonds in the "G-H" range appear colorless, and represent a much better value than "D-F" stones which command significantly higher prices.
Choosing the right Clarity:
Diamonds with fewer flaws (inclusions) are rare and therefore more highly prized. In many cases, these flaws don't detract from the beauty of the diamond because they are invisible to the naked eye.
Fast Fact: Any grade "SI2" or above has inclusions that are "eye clean", not visible to the naked eye. An "I1" grade can be an excellent value, particularly if the inclusion is on the outer edge. "I2" grades can still exhibit a fair degree of fire and light. "I3" grade diamonds are noticeably more opaque or dark to the naked eye.
Choosing the right Cut:
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