By Jason Fielder

Managed Money is a much more common phenomenon in other areas of investing than Forex, but some companies offer this service, as well. Managed money is any means of investment where the investor decides to place their money in an investment fund that is handled by a professional or professional company instead of making their own choices in investments.

In theory, by having a professional handle the account you are more likely to see better profits result.

One of the best examples of managed money is a mutual fund. While managed money is much less common in the Forex, some professional firms still offer it. Most of the time the firm will have an account in your name, and then they will make all the trades for you.

They can do this through various agreements, basically a limited power of attorney that lets them trade that money in that account for you.

The investment firm makes a small amount of money on the bid/ask spread (this is normal for managed Forex accounts) and then most take a certain percentage of the profit made at the end of each month, anywhere from 15-40%.

This does give the company incentive to make sure you do well, since the more profit you make, the bigger a cut they get. The reverse is also true: if you don”t make any profit, neither do they.

Most of these firms will have their own policies and paperwork to fill out in order to set up a Forex managed money account. Accounts should be available via Internet so the investor can see what trades are being made and what the results and account balance is. You should also receive the traditional paper statements via snail mail.

All accounts should also have some sort of stop loss to make sure that even if they take a beating, you”re not in danger of losing all your money.

If you decide to use a Forex managed money account, you will not be able to trade yourself off that account. The entire point of having your money managed is trusting professionals to make the right transactions in order to gain you a larger profit than you would be capable of managing on your own.

Most of these accounts will have a minimum amount of deposit, often times at the $10,000 range or even higher. You will have to check out each individual investment firm to figure out what the minimum amounts are.

Managed money is one way to go, but it’’s still no guarantee of profit. If this is the direction you want to go, make sure to do your homework to end up with a reputable investing firm you can trust. Otherwise, look for a trading system that works and see if you can do it yourself. Everyone who trades profitably needs a successful system, so if they”re just following a system - why not do it yourself?

Then you can keep that extra 30% profit, not too shabby at all!

About The Author

And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/

From Jason Fielder - Founder, ForexImpact.com

By Ian Armstrong

There are a lot of advantages to trading currency on the foreign exchange market that stock market trading doesn”t have. Here are a few.

A twenty-four hour market - Foreign exchange markets are open to do business around the clock. Small investors who are starting out doing trades in their spare time can benefit from this, since they don”t need to juggle their schedules around opportunities to trade. This means that if you choose Forex, you can schedule trading when it works for you. It doesn”t matter if you”re a night owl who wants to trade at one in the morning. There’’s a bank open in Tokyo.

Low cost of transaction - Since Forex brokers don”t work on commission, and no hidden fees are lurking in the fine print, you won”t pay a lot to trade. Broker fees are directly build into the trade as the bid/ask spread. This spread is the difference between the buying price and selling price of the currency, and it’’s expressed in what are called pips.

Leverage/margin - Trading on margin means that Forex traders have greater leverage in trading. It also offers the ability to make a very high profit on only a small investment. If you find a broker allowing a margin of a hundred to one, you can buy a hundred thousand dollars in currency with only a thousand dollar deposit. Remember that this leverage goes both ways and can lead to large losses if you”re not careful.

Fast trade execution/high liquidity - If you”re trading in currencies, that means you”re trading in cash - the single most liquid investment there is. Trades can be executed almost instantly, and there’’s no need to sit around waiting for yours to go through.

Difficult to influence - The foreign exchange market is so large that it’’s almost impossible for a single person, bank, fund, or even a government to influence it for any length of time. The stock market, on the other hand, can be influenced by things as small as a television analyst’’s negative forecast.

Small sample size - Stock trading means that you have thousands of options, including international companies, large and small companies, and newly issued IPOs. It’’s difficult to follow everything. In Forex trading, on the other hand, there are seven major currencies to follow. That means you can devote plenty of time to each. In fact, there are a number of successful Forex traders who don”t even trade in all seven currencies. You can just pick three or four and stick to them without a problem.

No bear markets - Because it’’s possible to trade short or long, you can make money whether the prices are up or down. You just have to make the right guess.

About The Author

Ian Armstrong is an avid Forex enthusiast.

Visit http://www.forexshortcuts.com for an inside look at what successful traders do, as well as objective, results-based reviews of the more popular FX trading systems.

By Gerald Greene

Forex currency trading is heavily advertised on the Internet. Some ads make it sound easy to make money by trading forex. However, like any activity that requires skill and judgement in order to be successful you had best prepare yourself before engaging in trading for real money.

The words forex currency trading are a bit redundant as forex stands for forex exchange and of course currencies are foreign exchange. Still many forex traders use the term forex currency trading when speaking of their trading activities so I suppose that the term is quite acceptable.

When trading forex you are always trading a currency pair. For example, you might be buying the Euro and at the same time selling US dollars. You have a pair of currencies. Or you might be buying Yen and selling US Dollars.

Or it could be that you live in London and are taking a trip to Japan. At some point along the way you are probably going to want to sell some British Pounds and buy Japanese Yen so that you will have the needed local currency for your trip.

In this way many travelers are involved in the foreign exchange market without even realizing it. Many billions of currencies change hands daily by international travelers selling their local currency for the currency that they will require at their destination. And again, each transaction involves a pair of currencies.

Trillions of dollar are exchanged daily as part of normal international business. For example, an English exporter may be sending goods to Japan and wishes to be paid in British Pounds. The Japanese importer will be required to sell Yen and buy Pounds to pay for the goods.

Interest rate differentials between currencies have a role to play in the demand for a currency as well. In general, speculative money will move towards currencies that offer higher interest rates on deposits. That is when the currency is expected to retain its value. It’’s no fun to get the interest return but more than give the return up due to a weakening of the currency. This has been happening with the US Dollar over the past few years.

Forex currency trading is by far the largest financial market in the world with trillions of Dollars, Yen, Pounds, and other currencies changing hands daily. All of this activity opens up trading opportunities for the forex trader as the markets are always moving as they respond to the supply and demand factors surrounding each currency. It is the currencies volatility and the financial leverage offered when trading forex that makes forex trading so interesting and so potentially interesting as a speculative trading medium.

In recent years the Internet has played a large role in making forex currency trading popular. The forex trader or forex trader wannabe can now trade currencies from his home or office computer and receive the charting services and information flows, for free, that used to be reserved for the big players or for those willing and able to pay hundreds, even thousands, of dollars a month for similar services.

Forex currency trading is not for everyone as it is a risk management business. If you don”t manage the risk well you are going to lose money at forex trading. However, for those traders who have risk capital and are good at evaluating risk and profit potential prior to entering a trade the forex market offers returns that can be much higher than any other.

Since forex trading involves money at every step of the way it has a huge attraction to traders who can afford to take the risk in an effort to get over sized returns. But remember to prepare yourself and learn as much as you can about forex before placing your money at risk.

About The Author

Gerald “Taipan” Greene is a retired forex trader and portfolio manager who worked in Asia for over 20 years. The nickname was acquired in Hong Kong and is now used for a number of financial related blogs. One of them is at http://www.forex-trading-guru.com

By Jason Fielder

If you”ve looked around for strategies on trading in the Forex market, there’’s no doubt you”ve run across a lot of ads talking about the power of a black box system. Some sound intriguing, others sound way too good to be true. So what’’s the truth behind these black box systems?

First of all, I”m going to start by saying that not every black box system is bad. Some are extremely effective depending on what the market is doing, and some systems are designed pretty well to deal with the changes in the Forex market. That being said, there are several things that you”ll need to consider and watch out for before deciding on whether or not to trust your real money to one of these black box systems.

A black box system is one that has been worked on by statisticians and traders to figure out that mathematical formula that is going to help them make the right trade and predict where the market is going to go. If it works, the profits can be great.

But there are several things to look out for, including:
1. The system’’s past track record
2. Is there a money back guarantee?
3. Does the system require a large up front payment?
4. Is it designed for all three market movements, or just one?

The Triad strategy for Forex trading takes into account that the market only moves three ways: trending, counter-trending, and breakout, and this system has a strategy for all three. Some black boxes may have a great trading strategy for a trending market, but what happens when the market counter-trends? Or the black box may have a great breakout strategy, but the market is rarely in a breakout, so how is that going to perform the majority of the time?

These are all extremely important questions to consider with any black box, as it is YOUR real hard earned money that will be at risk.

In addition, try to do some research and make sure that the system has an actual record of profit. If it doesn”t, that should throw up some immediate red flags. Systems that have large up front fees with no money-back guarantees are also usually ones that you will want to avoid.

The last major thing to be wary of is over optimization. This is when all the data and successful signals are optimized to the point that instead of having a pattern that predicts the future, you have “curve fitting” where you make a line going through all the profitable points without developing an actual projection. This makes it look like a slam dunk because it includes a “successful” past, but it has no ability to predict the future and therefore doesn”t give you any advantage.

In the end black boxes are like anything else: there’’s no Holy Grail, but there are solid systems and programs that can help traders make more off the Forex market. As always, look for a proven system that has a history of profitable trades, and when you find it, don”t be afraid to act!

About The Author

And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/

From Jason Fielder - Founder, ForexImpact.com

By Jason Fielder

Momentum is one of the major factors for professional Forex traders in deciding when to enter and exit the market. Momentum in the Forex market is the same basic concept as momentum in the real world: it’’s the perceived strength of a movement, whether that’’s upward or downward.

A great allegorical example of this is in the pro sports world. Take for an example two NFL football teams. Suppose you have two separate 10-6 football teams that look even on paper, but one team has lost 3 of their last 4, while the other team has won 7 straight games.

So which team would you bet on? If your answer wasn”t the one professional NFL team that won 7 straight, don”t get into sports gambling. The two teams may both be the same on the surface, but one team is definitely hot while the other team is very cold.

What’’s the difference between the two? They”re both 10-6 commodities, but one appears strong RIGHT NOW! The other looks like it was strong, but is now extremely weak. The Forex is a particularly fluid market, which can make momentum all the more important. What a Forex currency pair is doing now, at this very moment, gives you some information on how that currency pair is doing and how it should be perceived.

Momentum is very much taken into consideration by technical traders, many of whom believe that momentum can be as accurate an indicator of a currency pair as the actual price itself. Many different indicators are designed to help a Forex trader detect patterns of momentum.

For Forex traders, there are several ways to measure momentum using technical analysis, and often this is where you will see moving averages and other technical tools. Technical analysis is meant to find the momentum because once you can see where the market’’s force is pushing, you know where to make your entry and how to watch out for your exit.

This isn”t anything complicated. Momentum is the same concept whether you”re making a bet with a buddy on tonight’’s football game, or the big stack at a poker table bullying everyone around after two monster hands. Momentum affects everything, and the Forex market is no exception.

Understanding the importance of momentum the same way that professional Forex traders do is one of the most important steps to raking in the profits on your own trades.

About The Author

And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/

From Jason Fielder - Founder, ForexImpact.com

By Ian Armstrong

When you forecast Forex prices for the future, you use moving averages as a charting tools that will help in your predictions. There are several different kinds of moving averages.

Simple Moving Averages

You calculate a simple moving average (also known as SMA) by dividing the total of the past chosen period closing prices by the number of periods. Moving averages work on delay because you use price information from past periods to try and determine events for subsequent ones. It’’s important to note here that past trends do not guarantee future trends, however.

When the periods you use to calculate your moving average are smaller lengths of time, your chart will be “choppier” versus if you use bigger periods of time; with this, the chart will be less uneven. However, if you use larger periods of time, your moving averages will also be less reactive to price changes. This is especially true with simple moving averages, because contributions to moving averages are the same for all individual periods.

One moving average is quite useless as a tool. If you want to find the price trends in the Forex market, you”ll need to plot a series of moving averages instead.

Exponential Moving Averages (EMA)

Although simple moving averages are good tools to quickly establish the Forex market trends, they can be very susceptible to fluctuations and also rely on older as well as newer prices; this makes them less accurate. When you do a technical analysis, you”ll need to base forecasts on the most recent prices you have available to you. This means that you”ll need to base your forecast on what traders in the market are doing right now, not on what they were doing yesterday, last week or last month.

Exponential moving averages weight recent currency quotes to greater emphasis earlier currency quotes.

For example, if the daily closing prices for the pair GBP/USD are:

Day1 1.9722
Day2 1.9727 (1.9650)
Day3 1.9737
Day4 1.9742
Day5 1.9747

This means 1.9735 is the simple moving average with a five-period one-day chart as the example. This is higher than the price on the first day, and suggests that the pair GBP/USD will be going up. If on day two this figure is 1.9650, this may indicate an interest rate change by the Bank of England. The simple moving average here would be 1.9720, which indicates a downward trend for the currency pair GBP/USD. (However, the price then increased consistently from day two through day five.)

What you need to do, then, is to use exponential moving averages that place more emphasis on recent prices. The exponential moving average, in other words, gives more emphasis to what the market is doing now instead of yesterday, the day before or last month.

In the example just given above, day two’’s closing prices are at 1.9650, which means that the exponential moving average would have a weighting factor of 0.1, while 1.9726 would have a weighting factor of 0.2. (More recent prices are given higher weighting factors.)

You don”t need to do actual exponential moving averages calculations, because your charting software can do this once you plug the numbers in.

About The Author

Ian Armstrong is an avid Forex enthusiast.

If you”re eager to get started with forex, you only need two things - a good platform and a proven trading system. See Ian’’s top-picks for both of these at http://www.forexshortcuts.com/getstarted.php

By Ian Armstrong

When you analyze Forex, you want to try and predict which way the market is going to move. If your predictions are right, you”ll profit, but if you aren”t right, you”ll lose your money. You can do a Forex analysis in two ways. One is technical analysis and the other is fundamental analysis.

Technical analysis means that you examine currency prices over a period of time so that you can try and tell what trends and patterns there are. As an example, let’’s say that the value of one currency has been steadily growing over several weeks. It’’s likely that this trend is going to continue into the future at least for the short term. When you are doing technical analysis, identifying a trend is the most important aspect of this. If you can correctly identify a trend and then trade so that you dovetail with that trend, your trades are likely to be profitable. In addition, the earlier you identify a trend, the more likely you are to have profitable trades.

Fundamental analysis means that you take into account the economic social and political forces influencing the value of a particular currency within a given country. If the country’’s economy is strong, and if the country has a stable government, the country’’s currency is likely to be valuable and will likely rise against the currencies out countries whose economies are weaker.

Currently, as of early 2008, Zimbabwe is a country with a very weak economy. This is largely due to a very unstable and corrupt government. Currently, farmland is being stolen and currency reserves plundered by Zimbabwe’’s corrupt government officials. Inaddition, Zimbabwe’’s inflation is now over 1000%. This means that the currency loses more than 90% of its value every year. At present, Zimbabwe’’s currency is literally worth less than the paper it is printed on.

Even in countries that have stable and healthy economies, however, a particular reserve bank’’s actions (such as the Bank of England in the UK or the Federal Reserve in the US) can influence a country’’s currency value.

For best results, you need to use both technical analysis and fundamental analysis when you trade in Forex.

As an example, let’’s say the chart the value of the UK pound (GBP) against the US dollar during October through November 2007, and you just use technical analysis. You would have noticed that for several consecutive days, Pounds Sterling was going up against the US dollar buy a round 100 pigs every day. On November 8, 2007, you see that the Forex quote is GBP/USD = 2.1104/2.1109. Your instincts tell you that by the end of the trading day, this should have gone up to about: GBP/USD = 2.1204/2.1209. You decide to buy one standard lot at a rate of 1 GBP = 2.1109 USD, = 47373 GBP. As before, you expect the GBP to go up by 100 pips; this will mean that you can sell your 47373 GBP for 2.1204 USD each, which gives you $100,450, or a $450 profit for the days trade.

However, when you check the day’’s trading a few hours later, you see that it has moved against you, so that the Forex quote is now 2.0906/2.0911. You decide to get out so that you can cut your losses; you sell your 47373 GBP for 2.0906 USD each = $99,294. Now, instead of making $450, you have lost $706. What has happened here? On the first Thursday of every month, the Bank of England sets the UK base interest rate.

So, on Thursday, November 8, 2007, the Bank of England was to increase the UK base interest rate. This meant that UK inflation rates were lower so that the value of Pounds Sterling went up.

However, what the Bank of England did instead was to leave the UK interest rate on hold. This caused the GBP to fall in value instead of rising as expected.

About The Author

Ian Armstrong is an avid Forex enthusiast.

Some of the most popular trading systems have been objectively reviewed - based on actual performance - at http://www.forexshortcuts.com/trading-systems.php