|
|
|
|
E-currency Trading - An alternative to Futures & Forex TradingI find it amazing that nearly everyday I receive something online or offline that is the greatest break-through in Trading. You know the stuff. This system or that method has been thoroughly tested and back-tested in every conceivable fashion and is wildly successful. Some work for a period of time but most do not. The decades old statistical fact still remains, 90+% of Futures Traders will lose all of their trading capital within their first year of trading. Now there is a new and promising alternative. Enter e-Currency Trading. In simple terms e-currency is Internet Money. E-Currency allows the purchase of Internet goods and services at lightning speed and most importantly with a high level of security. Much higher than credit cards, bank transfer etc. The demand for e-currency should only grow as Internet Commerce grows. So what does this have to do with trading? There are literally hundreds of different e-currencies. Each is backed by an underlying Currency or a precious metal. The need arises to exchange between these e-currencies or convert an e-currency to hard cash. Much like the Euro is to the European Union. We can profit from the exchanging process and profit from the fluctuation of the underlying currency value. The same basic strategies apply to e-currency trading as with futures trading. Supply and demand dictates price primarily. You could buy e-currency that has historically performed well (buying the trend) or go the opposite way and buy those that are under-performing, looking for a turn-around. You can even chart them if you like. Leverage, that double-edged sword that Futures Traders are so familiar with is also present in e-Currency Trading. You can borrow against your portfolio to buy more e-currency. The compounding affect is almost outrageous. Some would argue that you never have to pay back the leverage. I contend that it is paid back if you closed your e-Currency account, because your final balance would be less the amount leveraged. The point here is the leverage in futures trading is often times the demise of a well intended trader versus the leverage afforded an e- currency trader combined with the daily compounding affect creates portfolio growth at a phenomenal rate. It is not uncommon to see portfolio growth of 20 to 40% per month. Futures Trading and e-Currency Trading have a common downside. The learning curve is huge and can be frustrating and costly. Each has unique terminology, which is impossible to work around until you have a good understanding of the meaning. Thankfully in this world of information, we are able to find resources online and offline that shorten that curve. How much it is shortened is dependent on how much time you want to dedicate. Industry experts have debated for years the optimum amount one should fund their futures trading account with. The obvious moving target is enough capital to withstand the drawdown periods. Many factors go into this but I have seen numbers range anywhere from $10,000 to $50,000 and up. If this is the case then there is little doubt why most futures traders lose as most are willing to fund only the amount required to cover Margin or the Brokers account minimum usually a few thousand dollars. One of the biggest reasons for small business failure is being under capitalized, the same holds true in futures trading. E-Currency Trading is different in that the experts recommend starting with a few hundred dollars and let the system build your account. Whatever route you choose, only trade with risk capital.
E-Currency Trading certainly has advantages over traditional
futures trading and may well be worth your serious
consideration. Internet Commerce is in the Billions and is
forecast to triple over the next 10 years. Many are seeing E-
currency Trading as a ground floor opportunity with huge growth
potential. Merv Thompson Author and operator of www.futures- brokers-review.com a website providing tools, resourses and reviews for todays trader. Additional information on e-currency trading can be found at e- Currency Info
FOREX-Euro falls on bank sector jitters, Aussie sags - Mon, 06 Sep 2010 23:53:19 -0700 FOREX-Euro falls on bank sector jitters, RBA eyed - Mon, 06 Sep 2010 21:35:00 -0700 Forex Strategy Outlook: Breakout Strategies Favored on Indecisive Currency Price Action - Mon, 06 Sep 2010 07:04:00 -0700 FOREX-Euro hits 3-week high, pares gains; sterling falls - Mon, 06 Sep 2010 08:21:40 -0700 Forex: USD/JPY trading flat between 84.25 and 84.50 - Sun, 05 Sep 2010 23:59:08 -0700 |
|
|
|
RELATED ARTICLES
Calculating FOREX Profits and Losses FOREX currencies are traded in much smaller divisions than cash. Whereas the smallest division in US cash is the penny ($0.01), US currency can be traded on the FOREX in divisions of $0.0001. This smallest division is called the pip (short for Price Interest Point - sometimes just called 'points'). Since currencies are traded in large lots of (say) $100,000 - small movements in value can generate substantial profits and losses. In a lot of US$100,000 one pip is worth $10 so an increase in 40 pips (4/10 of one cent) can generate a profit or loss of $400. FOREX Brokers Most FOREX traders use a broker to handle their transactions. What exactly is a broker? Strictly speaking, a broker is an individual or a company that buys and sells orders according the investor's decisions. Brokers earn money by charging a commission or a fee for their services. FOREX Signals One of the disadvantages of FOREX trading is the time investment needed to monitor the markets for advantageous entry and exit points. It's possible to sit in front of a computer monitor for hours watching the markets. FOREX Trading Strategies To be a successful FOREX trader you need a trading strategy. There is no one set strategy that is good for all traders; rather, each trader needs to develop his or her individual approach to the FOREX. Some traders rely solely on technical analysis while others prefer fundamental analysis, but many successful FOREX traders use a combination of both to get a broad overview of the market and for plotting entry and exit points. FOREX Training Knowledge is the key to successful FOREX trading. The knowledgeable trader has greater awareness of how the market moves and more chances of making profitable transactions. Without knowledge you are shooting in the dark. You may succeed on a few deals but the odds are that you are going to lose in the long run. FOREX versus Stocks Stocks have been a popular investment for hundreds of years. Companies issue stocks to raise capital for expansion and new projects, and each share of the stock represents a partial ownership in the company. How to Read FOREX Quotes Currency prices are determined by a number of factors, the most important of which are economic and political conditions in the issuing country. Political stability, inflation, and interest rates are all factored into the price of any currency. In addition, governments can try to control the price of their currency by either flooding the market (to lower the price) or buying extensively (to raise the price). Introduction to Fundamental Analysis FOREX traders almost always rely on analysis to make plan their trading strategies. There are two basic types of FOREX analysis - technical and fundamental. This article will look at fundamental analysis and how it used in FOREX trading. Risks of FOREX Trading Despite the claims you may see on some FOREX web sites, FOREX is not risk-free. You are trading with substantial sums of money and there is always a possibility that trades will go against you. There are several trading tools, however, that can minimize your risk, and with caution, and above all education, the FOREX trader can learn how to trade profitably and while minimizing losses. Trading Currencies on Margin The key to FOREX popularity is margin. Without margin, the FOREX would be beyond the reach of the average investor. So, what exactly is margin and how does it work? |
| Forex Trading Home | Site Map |
| © 2006-2010 ForexTradingGuide | Online Forex Trading |