We all speculate! Don’t kid yourself if you think otherwise. If you can get this basic element of truth, the central core of any business, you would have been many miles ahead of your peers. So let’s begin a basic understanding of margin and margin calls which are at the heart of a successful trading business.
A margin is like going to a T-shirt wholesaler in Chinatown and making a 10% deposit on 100 dozens of T-shirts to be sold at a sports parade because you anticipate a large crowd and a good sale will line your pocket with huge profit. You go to the parade expecting a fortune and hoping to make a few bucks on a 10% deposit with the T-shirt supplier. You’ve never really done this before but you’ve heard stories of other successful hawkers and street vendors.
Your only capital is the deposit you made with the supplier and a quick profit forecast turned ugly because of poor weather, vandals who damaged your goods or city seizure because you had no license to hawk your wares. In any case, you lost and did not make a profit but your supplier does not care. He calls for his balance and threatens to seize your building, damage your credit, something you need to be a viable businessman. Simplistic as this analogy is, in Forex trading things are no different. It follows the same logic I just referenced above. So what is a margin and margin calls? [click to continue…]
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The Chinese have a saying or proverb, he who chases after two rabbits ends up losing both. How does this relate to you as a trader? You are about to discover the key ingredient that has made successful traders extremely wealthy. But what does it have to do with placing orders? After all, you want to make money and placing your trading orders is all that counts, you think. But wait, a study was conducted not too long ago to find out the main reason why most inexperienced traders fail to place successful trades, revealed a shocking statistic. It was revealed that young traders like you are often distracted by multiple trading positions and that lack of a single minded focus was the greatest culprit. 
Judging by the email and comments I’ve received both in public and in private, it looks like most of you are more interested in Forex trading. So, the next five posts will be on Forex trading, a basic guide for beginners. This is going to be an introduction to currency trading, written in simple language to help you get a grip of the elementary aspects of this business.
Forex trading also known as currency trading or foreign exchange trading is the active buying and selling of any government issued currency. For instance in the United States of America has the US dollar. In Canada, they have the Canadian dollar. Continental Europe has the Euro. Great Britain has the British Pounds and so on and so forth. You get the point? Countries trade their currency for another in the same fashion as buying consumer goods from one another. In essence, currencies can be classified as commodities. It was once a closed game between bankers and financial institutions until recently while making money like bandits. Sometimes they lost too, but nothing compares to tons of money they made at the expense of ignorant masses.
Not to bust anyone’s chops, but seriously do you really think that making money in commodities, equities and forex trading involves just an ebook and a trading software totaling less than $100? Are you serious or just kidding yourself? Think again! Statistics show that most a well educated and resourceful trader is more positioned to make money trading than a drive-by trader armed with just a bootleg software. If your goal is to make real money and not kid around then continue reading because you are about to find out the baby steps you need to make money.
