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Informative Articles

Avoiding Forex-Related Frauds & Scams
A lot of people have been ‘burnt' from scam operations on the Internet. Their sites may look so perfectly legitimate that you doubt whether they would have gone through all that trouble building a trading platform just to steal your money....

Fear And The Profitable Forex Trader.
Forex trading is one of the most looked for occupations for many people these days. Around the world people is getting tired of fixed working hours and tight cubicles that limit their aspirations of a more relaxed and satisfying working life. ...

How Does FOREX Compare to Other Investment Markets?
Commission-free trading: In the equities and futures markets, individuals generally place their orders with a broker, who in turn routes the order to a market maker or exchange where the order is actually executed. As a result, two parties...

The Money Jar Trap
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Trends and Profitable Trading In The Forex Markets.
The basis behind using technical analysis is to find trends when looking at the forex charts and be aware of when they first develop so you can ride the trend until it ends. The foreign exchange market is a very strong trending market, lots of ups...

 
Three Important Forex Concepts For New Traders.

As you enter the world of Forex you will find yourself learning and using many new concepts that you may not have used or heard before.

Three of this important concepts that you must understand are what "Pips" are, What "Volume" is and what you do when "Buying" and "Selling Short". They may look more like four concepts but Buying and Selling are like the two faces on the same coin so we can consider them as a single concept.

Lets first introduce what Pips are. Maybe you have heard or read already how many pips a day you can make using some trading system. In short, currency pairs prices will go out to 4 significant digits. For example; if one currency pair is trading for 1.3451 then an increase to 1.3452 would be a "one-pip" increase in the price of this particular currency. This is an increase of one hundredth of a percent of the value of the currency pair you are trading. And depending the type of account you have, regular or mini, each pip will have a value of $10 or $1. So if you make 10 pips a day with a regular account you would have made $100 and with a mini-account $10.

Now we can talk about the Volume; trading Volume is a quantity that tells traders how much money is being traded at one particular moment. And the forex market is known by its high volume of trading during most of the time markets are open. Some times there can be spikes in the volume during some type of

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news breaks and during the time New York stock exchange is open. The volume of transactions in Forex, even in a slow day, will always be much higher than the volume traded in other large exchanges at their full capacity.

Now maybe the most obvious of the concepts. Buying refers to the acquisition of a particular currency pair to open a trade. Selling short refers to the selling of a particular currency to open a trade. When you Buy, you are expecting the price of the currency pair to increase with time, i.e., you buy cheap to sell high. In the case of Selling short, it looks a bit more complicated. Here the way to make money is to initially sell a currency pair that you think will lose value in a given period of time and then, once it happened, you will buy it back at the new price but now you can sell it at the previous greater price the currency had when you opened the trade, so you earn the difference in prices. I know it seems kind of tricky, but once you are in front of your trading station it will look much simpler.

Understand well these three concepts and you will start with solid steps you trading career.

About the author:

Adrian Pablo is a freelance writer with articles published in a number of places. Get a free report on Fibonacci Trading and learn more about the world of trading , visit:

http://www.1-forex.com