Update from June 2009: I like a new tool called IvyBot which is an automatic Forex AutoBot. It combines four Forex auto-robots into one. Read about it and try it out at: IvyBot – four Forex professional trading robots into one pacakage – An active Forex trader’s review.

—- Original Post Below —-

If you are looking to make some easy money online Forex trading is a great option to take advantage of. Currency trading is no longer something that you have to be an expert to take part in. There are plenty of places online where you can start taking part in Forex trading. eToro is a great place to get your feet wet in the trading market.

What is Forex trading?

Forex trading is a foreign exchange market where various nation’s currencies are traded for one another. An amazing $1.9 trillion dollars are traded over the Forex market everyday. That is over three times the aggregate amount that is traded on the US Equity and Treasury markets. That means that there is so much more opportunity to make money in the Forex market than in other exchanges.

The Forex market has no physical home so exchanges come through constantly. Global banks, corporations and individuals all trade on the Forex market all throughout the day and night. That means that no matter where you live or happen to be at, as long as you have computer access you can trade on the Forex market. The Forex market is up 24 hours a day.

Originally the only way to tap into foreign exchange was through large banks that carried out many transactions in different currencies. Over time, as the Internet became more popular and accessible, trading options on the foreign market began to open up. Now importers, exporters, international portfolio manages, multinational corporations, day traders, long term holders and anyone that happens to want to trade on the Forex market can do so.

How does currency exchange work?

Rates for different currencies will be posted no matter what platform you decide to use. All of the currencies will be listed in pairs, like EUR/JPY (Euro vs. Japanese Yen). The rate will tell you how many Japanese Yen are needed to buy one Euro. You will need to be aware of what is happening in the world news. For example, if you here a strong economic report come out of Europe, the Euro will increase in value. That means that you should buy Japanese Yen with your Euro. When the rate of the Euro does rise, you them back. Of course, these is just a theory on how to work the Forex market. In fact, you may find that when you are practicing things will be different. In the beginning you may be overwhelmed by the technical jargon. Over time you will get used to the terms and understand what they mean.

So what is eToro?

eToro is one of the many tools that you can use to get started trading in the Forex market with. There are plenty of other websites that you can sue that offer the same services. eToro and other Forex trading websites are very easy to use. However, you may be able to find the same financial services that eToro offers through local financial planners. In short, any currency trading is just like any other trading. You are just exchanging one currency for another one. The eToro website provides a platform that you can use to exchange one currency for another one.

How is eToro different?

eToro is different from other site in many ways. First of all you will be able to trade with as little as $25 with high risk level. The minimum deposit that you need to make is $50. However, if you deposit it during any promotions, you might be bale to get extra money added into your account. You can also ask your friends to refer you. If you want me to refer you we can both get money. Just send me a line.

eToro stands out from some of the other Forex trading site because of its visualization options. Your trades are displayed in a manner that makes it very easy for new traders and expert traders to see exactly what is going on.

Another great tool that eToro offers is practice demos. You can start off in demo mode and get used to trading. Start off with $2000 in demo money. If you lose it all, don’t worry. All you have to do is ask the helpdesk to refill your account.

Another great feature of eToro is that is offers a community orientated approach. You will be able to take to e-traders from around the world in chat rooms. I found myself in the chat room getting advice and information from other day traders. There are also many other Forex tools that don’t use chat features. You can be sitting at home in Canada or the U.S and check out how the market in Sydney is doing.

When eToro is in expert mode you also can view “History”, which means you can see all of the trades that you have ever made. Having the historical data on hand is helpful because it can provide information about trends in the market. There is also a news option that keeps you up to date on current economical news that may affect your trading.

eToro also has a display chart that will show you how each pair of currency is doing from 1 hour to 30 days. There is also an Easy Deposits feature. You can use major credit cards or paypal to deposit money into your eToro account and start trading. You will be able to compete with other traders for real money as well. If you are looking to try out your luck, this can be a good first step.

eToro also has a very good support staff. They provide helpful and useful information. Last but not least, eToro’s fees is very competitive. You only have to spend a minimal amount for each trade.

Is eToro a scam?

This is a question that I’ve been asked a few times. While I was skeptical in the beginning and hesitant to enroll, I am so glad I did. eToro is not a scam. It is a legitimate website for Forex trading. You can make money day trading and get all the information you need to beginning taking advantage of the Forex market. If you have any doubts about eToro visiting the website and reading more about it will surely make you feel much better.

How to start using eToro

Before you embark on actual Forex market trading you should practice. Start off with Demo trading to get a feel for it. You can set up a demo account and start getting familiar with the speed and movement of the market. While in demo mode you will be able to place stop-loss orders and protect your positions.

There are a few basic things you should know before you try your hand at Forex trading. First of all, when you are reading currencies, it is important to note that the first currency is the “base currency”. Generally the base currency will be the U.S. Dollar. The U.S. Dollar is the currency that most traders trade against another currency. That makes the U.S. Dollar the “counter currency”. All of the currencies are listed in pairs. The first currency in the pair is the counter currency and the second one is the base currency. So if you see USD/JPY equals to 2.5, one U.S. Dollar can buy 2.5 JPY. If a quote increases, the base currency has gone up in value and the counter currency has decreased in value.

What makes the Forex market different?

The Forex market is a great market to trade on for a number of reasons. First of all the Forex market is geographically dispersed in a way that allows people to trade 24 hours a day five days a week. It also has a low margin of profit because it is not a market of fixed income. The variety of traders on the market makes it possible to see good returns in a short amount of time.

There are also various levels of access in the Forex market. In a stock market everyone has to access stocks at the same price. Forex markets allow larger investors to invest more and smaller investors are able to put up smaller amounts. This adds extreme diversity to Forex markets. Huge international banks trade on the Forex market but so do small time beginning traders. About 53% of transactions are carried out by top-tier inter-bank market. The rest of the trading is carried out by other, smaller traders.

What makes the Forex market better than others?

In Forex markets you can trade on spreads as low as 1-2 pips. On some sites you will pay commissions on bids but other sites don’t charge on bids. You can enter bids at various prices. There are fixed environments for trades and variable ones. Offering more stability for traders.

Terms you should know about the Forex market

There are a number of terms you should know before trading on the Forex market. Ask Price is the price that traders can buy base currencies at. The quote will be displayed at the right side of the currencies. The price displayed in the Ask Quote is what you choose to buy currencies when you think they will increase.

Another term to know is Base Currency. When two currencies are paired together the first one is the base currency. Bear is a term used to describe a market in a downturn with declining prices. Bid Prices refers to the price that the trader can sell the base currency at. So if you are betting on a currency to decrease you could choose to sell it at the displayed bid quote for USD.

Other helpful terms you should know include Bull, Buy Price, Counter Currency, Currency Pair and Cross Rate. When you are trading on the Forex market you want to be on top of the terms that are being used.

A market that looks optimistic and has a potentially rising prices it is called a Bull market. Cable is also often called Sterling. It is used by dealers to refer to currency pairs. Counter Currency refers to the second currency in currency pairs. The value of the counter currency is determined against the base currency’s value.

What sets eToro apart from other Forex trading sites?

eToro is a ser friendly platform for Forex trading. You won’t have to sort through tough information that takes an expert in Forex trading to understand. eToro lets users focus in on trading instead of studying up on trading. You will be able to spend time making important trade decisions opposed to sorting through information you don’t understand. The easy to access tools and community involvement that eToro offers everything you need to trade.

eToro is an innovative Forex trading site that stays on top of the online Forex revolution. When new developments comes on the Forex market eToro will bring them to you. You will also not have to worry about commissions. Many Forex trading websites charge commissions for bids the initial margin requirement is just $50 and you will be able to take advantage of bottom low spreads.

Using stop orders

Whenever you are trading on any market platform there are risks. In the Forex markets on important risk management tool is a stop order. A stop order allows you to close a position if prices sift negatively. Stop orders are based on their price, and are not enacted immediately. That means that the stop order will only go through when the current bid or offer get to a stated stop price. The trader is the one that sets the trade price. So that means that you can set things up so that a currency is only sold if it slips to a certain point. This can be a great tool for protection against losses in the Forex market. Stop orders that sell the quoted bid deal have to be set at a price that is in excess of the current bid. The trader has to the power to cancel the stop order. If the trader never cancels the stop order then it is good and will operate everyday until it is filled unless the trader cancels it.

The way that stop orders work is like this. If a trader thinks that the British pound is going to strengthen against the U.S. dollar, they may buy a mini contract at 1.8333. Any weakening of the British pound will cause the trader to lose money. A loss limit of up ot $65 can be set. Every small price fluctuation of the mini contract is worth $1. The stop order that the trader would enter would be 1.8268. That means the is the GBP/USD bit happens to fall below 1.8268, the stop order will be filled.

When a trader wishes to buy at a price that is less than the current offer, a limit order is used. You can set a limit order that will only go through when the current bid or offer reaches a particular price. Limit orders must be set at a price that is less than the current offer. In order to sell the limit order on the quoted bid, the price has to more than the current bid. Just like stop orders, you can set limit orders and they are in effect until you cancel them or they go through.

Limit orders work like this. For example, if the British pound looks like it is going to strengthen against the U.S. dollar, you will buy a mini contract at 1.8333. if the British pound does get stronger, you will earn a profit. If the profit gets to $100 the trade will be closed. Every PIP () of the mini contract is worth $1. The limit order will be set to sell one GBP/USD mini contract at 1.8433. If the bid gets over 1.8433 the limit order will be filled and the position is closed. However, there is no guarantee that the British pound is going to do as well as it is predicted to do. So, in order to stay on the safe side, you can enter a stop order to make sure that the loss is not major.

You can have both a stop order and a limit order in place. This is a way to cap losses but still take advantage of movements in the market. The goal is to earn the most without risking too much. Once one of the orders is filled, whether it be the stop or the limit order, the other order needs to be canceled.

How to Speculate

Most people buy after they do some speculating. If you are waiting for a sure thing, you will not make much progress on the Forex market. Of course you also want ot be sure that you are careful with your speculating. For example, if you have good reason to believe that the Euro is going to strengthen against the U.S. dollar, you would buy one EUR/USD mini contract at 1.2089. The trade will profit is the Euro strengthens to something above the price or the mini contract rate of 1.2089. The risk of speculating can be reduced by using stop orders. For instance, if you only want to risk $75 dollars, you can set up a mini contract at 1.2014. This will ensure that if the EUR/USD bid ever falls to 1.2014 the position will be closed and you won’t lose anymore on it. You can watch the EURO and see if it does start to strengthen. If that happens you have the option of when to take the profit.

When to buy or sell

The Forex market is a great place to trade because you can sell first and buy back at a lower price. You will have to be aware of what is going on with exchange rates of currencies in order to get the most out of the Forex market. Fluctuations will be greatly influenced by world events and other markets. Pay attention so that you can make the best trades possible.

Be aware of risks

It is very important that you realize that there are risks involved with Forex market trading. If you are going to participate in Forex trading you want to be sure that you are financially capable. Substantial losses can occur so never use money that you can not afford to lose. Forex trading is not going to be something that everyone does well at.

Money that you can afford to lose is called risk capital. Only use this money when you are placing orders. Stay conservative when it comes to leverage because it can work for or against you. High leverage can cause you to have big losses. You could even possibly lose your entire initial deposit which is highly undesirable. Prices can never be predicted with complete certainty.

It is also important to be aware that the platform you are using can be unavailable at times. If there is a power failure you will not be able to place any trades. You would not be able to complete orders if there was a major power failure or if you are stuck somewhere that you can not get home from. Keep this in mind when you are placing orders.

Play the Forex market with caution. You want to be as successful as possible. That does not mean that you have to be extremely aggressive. Take your time to learn how Forex markets work and place orders with caution. Forex markets are places that some people get rich. However, most of us will have a much more modest experience.

Forex markets have no middleman involved. That is one of the big advantages of th3e Forex markets. You will not have to spend time going through a stockbroker to get deals done. You will be able to place orders online without the intervention of someone else. Since the exchanges are not centralized orders can be placed throughout the day and night. There are some drawbacks to this approach, such as things can literally change over night in the Forex markets, but there are also major benefits. For one thing, it means that buy/sell programs do not have major control over the Forex market. There is also not the influence of TV analysts to deal with. News programs about stocks are set up to push people into buying certain stock. You will often here analysts urging people to buy stock that is declining. However, with the Forex markets, this does not happen. There are too many currencies for analysts to stay on top of and the market fluctuations constantly. Making is nearly impossible to stay on top of what it happening at every moment.

If you are looking for an exciting way to experience Forex trading, do with eToro. This is a great platform to work from. The simple instructions will help you get started and have you on tack in no time. Start now so you can begin learning how to maneuver your way around the Forex market.

Some of the Perks (not trying to convince you, just what I have noticed):

• Minimum deposit: $50
• Low Spreads from 2 pips (I noticed it has changed tremendously. It was 2 pips or around that initially but its very high now. Do your own research)
• No commissions and swap (They get commission in the form of spreads – pips)
• Webtrader
• Commodities trading (Gold and Silver)
• Demo and real championships with real prices (In demo you will win most of the time. Dont get carried away. Just because you are wining on demo does not mean you will in real trading. Thats the trick)
• Some bonuses are also available:
  • Deposit $200 – $399 receive a bonus of $25
  • Deposit $400 – $900 receive a bonus of $100
  • Deposit $1000 – $4999 receive a bonus of $250 and get a silver account
  • Deposit $5000 – $9999 receive a bonus of $500 and get a gold account
  • Deposit $10000 – $19999 receive a bonus of $1000 and get a gold account
  • Deposit $20000 and more – Not sure how much bonus you will get.

 

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