FOREX TRADING FOR DUMMIES – Automated Forex Trading

Stock Trading For Dummies – Overview

Stock trading for dummies recommends that you understand the following salient points about stock trading to be used as a very simple primer and certainly not an in-depth study of stock trading:

1. Stop/Loss
2. MIP
3. Equities
4. Alternative Mutual Funds
5. Bonds
6. Dollar Cost Averaging

Stop/Loss
In essence this is a controlling automatic limit that you can put on stocks. For instance you may wish to put in a Stop/Loss for 10% of what you paid for a stock, so that should it reach a 10% loss your broker will automatically sell it for you. The reason that it is called a stop/loss is that it will stop losses from occurring quickly while you are asleep or on vacation for example.

MIP
Stock trading for dummies highly recommends this particular investment tip. It stands for Monthly Income Plan, and what it means is that as an investment plan it doles out a monthly amount of income. Obviously it is perfect for senior investors, who ordinarily would have no monthly income except perhaps a Social Security check.

Equities
Granted you may have equity in a house which means the difference between what it would sell for as opposed to the money you owe on the home, but in stock trading for dummies, it means a type of investment strategy that uses only equity securities. What happens in this particular case is that one company invests in a particular stock that has actually been issued by yet another company.

Alternative Mutual Funds
Hedge-like mutual funds will adopt alternative strategies. The reason they are called alternative mutual funds is that to invest in actual mutual funds, one needs to be an accredited investor. These mutual funds on the other hand mimic mutual funds in process except that these funds are less volatile.

Bonds
Investing in bonds is often suggested as an investment strategy because they are generally a low risk method considered as most stable to diversify one’s portfolio, thus is recommended for stock trading for dummies. Of course the crux of the matter is, as it always has been, is knowing which types of bonds to invest in and when to do so.

Dollar Cost Averaging
Put quite simply in the description of online or penny stock trading for dummies, it is the systematic investment of a specific amount of money invested at regular intervals and this is ordinarily done in this manner for a long period of time. Ordinarily this is a plan that will go on for 5 to maybe 10 years.

Read other posts:

• Forex For Dummies
• Currency Trading For Dummies
  
• Day Trading For Dummies
• Trading Options For Dummies

Currency Trading For Dummies Guides and Terms

The trading of currency is referred to as Forex. In essence it is a cash market where investors can speculate on changes in foreign currencies or the exchange rates of them. Here some currency trading for dummies guides:

No Physical Exchange
Because it has no structured physical exchange per se, it basically operates on a 24-hour basis since there are markets throughout the world, such as Tokyo, Great Britain, New York and such. Because these are not physically close to each other, when one market opens, such as the US, another is closing elsewhere, but still there is currency trading taking place. Thus currency trading for dummies stresses that because it is an ongoing exchange of currency there are constant changes that you will need to be aware of.

How It Operates
You should know, for example, that the Forex market is considered an over the counter market. Forex dealers and large banks are interconnected via the phone, fax and of course the internet, and that is the actual “market” as it were. Prior to 1971 the foreign currency market was traded only through large banks in large chunks. Forex now functions quite differently.

Composition
It is now comprised of hedge fund holders, long-term holders, day traders, large multinational corporations, international portfolio managers as well as exporters and importers, all of which can use this Forex market to pay for services as well as goods, and make transactions that involve hedging with regard to currency movements. As you can see Forex is important to the entire world of business. You will also learn that as a day trader, you do not need large sums of money to invest in Forex. This makes the Forex market entirely different than dealing in stocks and bonds.

Advantages
Trading in Forex will give you many advantages. If you wish to learn about currency trading for dummies, you should know that one of the tremendous advantages to the Forex market is that it is extremely liquid. You can always quickly sell or buy any particular currency, and Forex has one of the largest trading volumes available. Because global developments influence the currency trading of Forex, this means that its movements are often predictable, thus this is how money is made.

Also, you will learn that Forex does not have broker’s commissions associated with it; instead brokers make their money on the spread. Interestingly enough too, there need not be a huge capital outlay when dealing with Forex. Finally, one of the most important facts about currency trading for dummies is that many investors make their living in front of their computer performing currency trading.

With currency trading for dummies, you should understand that if you’ve dealt with buying stock before, and been totally bewildered by such terms as uptick rules, and the restricted inaccessibility of stocks and bonds, you would find that dealing with currency trading is much simpler by virtue of the fact that it is so accessible and thus liquid.

PIPs
When dealing with currency trading for dummies, you should know that Percentage In Point, or PIP is how money is made, and this is because money is quoted in mathematics that goes to the fourth decimal point, or 1/100^th of 1%. Understanding the dynamic of currency trading is important. When you see a quote of EUR/USD what is actually happening is that Euros are being traded for United States dollars. This would be referred to as short euro and long dollars.

Alternative Terms
Of interest to currency trading for dummies, are the cute little nicknames and alternative terms earned by different currencies. For instance, the US dollar may be referred to as a buck or a greenback, the alternative for the British pound is cable or sterling, the Swiss franc the swissie, the Canadian dollar is called the loonie, and the kiwi is the alternative name for the New Zealand dollar.

Read other posts:

• Forex For Dummies
• Day Trading For Dummies
• Stock Trading For Dummies
• Trading Options For Dummies