Monday, February 29, 2016

How Do People Make Money In Forex Trading

If you are relatively new to the foreign currency exchange market, you might wonder how do forex traders earn profit just by exchanging one currency into another. Most people with no definite background in forex trading often have no clear understanding on how do traders make money through currency trading. Luckily, we’ve created this article, to further explain how the foreign currency exchange market works. 

In the forex market, you exchange your money for a different currency, in hopes that the traded currency will rise in value. If the odds go in your favor, and the new currency you’ve just traded increases in value, you’ll technically have more money once you’ve traded back your money to your initial currency.

I’ll give you a clear example of how can a trader earn profit from currency trading. For example, you currently own US$450 and in anticipation that the Euro will rise against the dollar, you decided to trade your USD for 500 euros. After a week, the EUR/USD exchange rate really went up from 0.90 to 1.0, which means that the USD that you previously owned has really increased in value. At this very moment, you could trade your 500 euros for US$500, resulting in a profit of 50 US dollars!

See how simple it is to earn profit in forex? 

However, you should also consider the risks associated with forex trading. Say for example, the transaction went the other way and the USD weakened against the Euro. Instead of enjoying a good amount of profit, you will be left grieving because of your losses.

With the proper understanding of the forex market and what is forex, you could also be successful in forex trading! Our educational blogs are always here, ready to educate you in times of need :)

See who the best forex brokers are, visit to find out!

Thursday, February 25, 2016

Reading a Forex Quote

If you are relatively new to the foreign currency exchange market, reading a forex quote might be one of the few things you’re struggling with. You might be unsure of what do they mean and might feel confused whenever you encounter them. But worry not, in this article, we will teach you how to properly read forex quotes.

In the forex market, each currency quote is quoted in the pair. Some examples of currency pairs are EUR/USD or USD/JPY. Currencies are quoted in pair simply because, in the forex market, buying one currency means you’re selling a different one also. For example the EUR/USD currency pair means that you have to pay a certain amount of USD in order to buy one EUR.

Let’s make an example:

If, for example, the USD/CAD = 1.36, it means that if you want to buy 1 US dollars, you will need to pay 1.36 Canadian dollars to do so. On the other hand, if you decided to sell your USD, you will receive 1.36 Canadian dollars.

The currency on the left side of the pair is called the “base currency”, while the currency on the right side of the pair is called as the “quote” or “counter currency”.

Learn more about the forex market and further understand what is forex by referring to our educational blogs and articles. See who the best forex brokers are, visit to find out!

Thursday, February 18, 2016

Risks of Margin Trading

Margin trading is a technique that most traders use to control bigger market positions that is greater than the amount of their initial investment. Through the use of leverage, the trader is able to amplify their investments, and take advantage of a bigger capital.

Say for example, the trader currently has an amount of $100 in his trading account. If his broker provides a leverage of 1:400, then he would be able to amplify his initial capital of $100 for up to 400x! Basically speaking, with that kind of leverage, the trader would be able to buy securities worth up to ($100 x 400) = $40,000! 

However, despite all of the attractive advantages margin trading offers, it also carries a significant amount of risk. Trading on a margin definite does amplify your total trading investments, but so does your losses and, when not observed properly, might even leave you on a negative balance.

So before you dive into margin trading, make sure that you fully understand all the advantages and the risks that are associated with it, so that you won’t end up having a negative account balance. Even if you think that you are ready with margin trading, you should only expose yourself with the amount you can afford to lose.

Equip yourself with all the necessary knowledge you need to reach success in forex trading by reading our educational blogs. Find out who the best forex brokers are, visit to find out!

Friday, February 12, 2016

What is Short Covering

In our previous article, we have discussed about what ‘short selling’ is and how can it help you gain profit from the forex market. Today we’ll talk about a new, but very related forex term – short covering.

First of all, what is short covering? Short covering is the act of purchasing back borrowed stock in order to cover existing short positions. Short covering basically refers to the act of buying the exact same security that was borrowed and was initially sold short. 

What Does Short Covering Do For You

With the right knowledge and strategy, short selling can be a profitable strategy to use in financial markets. It works by profiting from the possibility of an impending decline in the security’s price, taking advantage of the difference in the short-sale price and the current price when it was short-covered.

For example, you borrowed 100 shares of Apple in hopes of an upcoming decline in the company’s stock price. You decided to sell the stocks you borrowed for its current price of $10 per share because you believe that the stock’s price will go down soon enough. Soon thereafter, the company released a brand new iPhone, but it didn’t pique the interest of the target market. Because of that, the stock price goes down from $10 to $5 per share. After hearing the news, you decided to buy back 100 shares of Apple for $5 per share in order to purchase back the borrowed stocks that was initially sold for $10 per share (this act is called short covering). After the short covering – you’ll realize that you’ve just made a profit of $500 – excluding the commission and transaction fee.

By properly understanding the world of forex trading and understanding what is forex, earning a substantial amount of profit will be an effortless task for you. Refer to our educational blogs for more information about the foreign exchange market.

Visit to see who the best forex brokers are!

Wednesday, February 10, 2016

What is Lot?

In our previous articles, we’ve discussed some of the most encountered and complicated forex trading terms. Today, we’ll now discuss the term “lot” and how it is used in forex trading.

First of all, what does the term “lot” stands for? Lot refers to a bundle of units in trade. It talks about the size of the trade that you are making.

An accurate example of this is when you’re buying a pack of biscuit in a grocery store. A pack of biscuit contains 10 pieces of biscuits. Buying a pack of biscuit. If you’re buying a pack of biscuit, you are essentially buying 1 lot. It would be impossible for you to buy 5 pieces of biscuits, you have to buy them as a pack.

It would, however, be possible for you to buy more than 10 biscuits, but you have to buy them in multiples of 10. So, if you want to buy 20 pieces of biscuits, you have to buy 2 packs (lots) of biscuits to do so.

The pack of biscuit is an example of a lot. In the forex market, lot refers to how many units of currency are being involved in a trade.

In foreign exchange markets, the standard size for a lot is 100,000 units. There are also other types of lots – mini, micro and nano – which are 10,000, 1,000 and 100 units respectively.

When trading a micro lot, the smallest trade size you can make is always in multiples of 1,000. That means you can trade 1,000, 2,000, 3,000 units as long as it is in multiples of 1,000. Each 1,000 units is equivalent to 1 micro lot.

Familiarize yourself with more forex trading terms and learn “what is forex” by visiting our educational blogs. See who the best forex brokers are, visit to find out! :)

Friday, February 5, 2016

Trading Principles: Continuation

Prior to this article, we have discussed about the different trading principles you need to achieve success in forex trading. This article will further tackle the mentioned topic and will discuss about other trading principles of a successful forex trader.

Achieving success in forex trading doesn’t come that easy. Following a set of trading principles will increase your chances of success in forex trading.

Do Not Trade Without A Reason

Do not trade simply because you are bored or have nothing else to do. It might sound a bit strange, but some traders are guilty of doing this. You should only trade if you think the time is right, and when there are existing factors to justify such actions.

Work and Think By Yourself

Getting useful insights from other traders might be helpful in achieving trading success, but you should not solely rely on them if you want to be successful in trading. In forex trading, it is important to develop your own strategies and make your own decisions.

Trade Only When You Are Confident About It

It is always better to wait for the right moment, than open a trade when you are unsure of the situation. If you are not confident of what will be the outcome, you should not take the risk. Missing a few pips is better than losing a large amount of money due to rash action.

Limit Your Risks

Use only a reasonable amount of money in trading. Don’t use excessive amount of money, which will put your family’s budget at risk.

Know Your Limits

As stated in the first part of this article, you should not let your emotions control your trading strategy. Trading in forex might be addictive, especially if you’re constantly making a substantial amount of profit. However, you should never let it ruin your trading logic, know when to stop and close your trades.

We’re hoping that these trading principles will bring further success in your trading journey.

Read more educational blogs about the stock market and have a better understanding on what is forex by reading our educational blogs. Visit to find out who the best forex brokers are!

Wednesday, February 3, 2016

What is Market Trend?

We’ve discussed about few of the most basic forex terms in our previous articles. Today we’ll talk about a trading term that would be useful in your trading journey. In this article, you’ll get a further understanding of what market trends are and how big is its impact to your trading success. 

As a start, we first need to learn what market trend is. Market trends talks about the general movement of a financial market. Most people associated with stock market try to identify the direction of the market’s current movement and tries to predict how long the current movement or “trend” will carry on.

Accurately determining and predicting market trends will have a huge impact on deciding which type of investments should you buy and sell.

The process of identifying market trends will greatly rely on the concept of efficient market hypothesis. Basically, this concept includes understanding that financial markets provide the necessary tools to figure out how to buy and sell, since it’s feasible to investigate the factors that led to the current market condition.

By taking efficient market hypothesis into consideration, it is possible to analyze the reason that led to the present market condition, figure out which factors are likely to affect the market and what can happen to change its current trend in the future, and possibly predict how a security will perform in the future, based on the current indicators.

Understanding market trend is very important if you want to be successful in forex trading. Equip yourself with all the essential information and insights by reading our forex educational blogs. Doing so will get you prepared in your online trading journey.

Learn who the best forex brokers are, visit WibestBroker and see the list of the most popular and top rated forex brokers.

Monday, February 1, 2016

Identifying the Risks in Forex Trading: CHOOSING THE RIGHT BROKER

Foreign currency exchange, or widely known as forex trading, is an act of exchanging one currency to another in an effort of making a considerable amount of profit. Forex trading not only became a profitable method of investment, but also it easily became one of the best ways of making money at home. By trading foreign currencies through the Internet, apparently an individual can make money regardless of when and where they are. 

Despite all the advantages and benefits that the forex market has over other financial markets and investment forms, there is still a considerable amount of risks involved in trading foreign currencies. A successful forex trader is fully aware of these risks, and knows how to avoid or significantly reduce them. However, if you’re just beginning to trade in forex, you might be clueless about these risks. Just keep on reading this article and we’ll discuss about these risks.

Can Your Broker Make You Lose Money

There are two popular types of broker – the market maker and the ECN broker. Commonly, a market maker will encourage their clients to trade on a margin and set stop loss orders – which will enable the market makers to close out trades almost at will during busy markets at prices they have set. If the market maker does not offset the position of the trader, the loss generated when a stop loss is triggered will become the gain of the market maker. Often not considered as a scam, but they basically trick newbie and uninformed traders.

To avoid such risks, you must choose a broker that will not trade against you – such as an ECN broker. An ECN broker is similar to an interbank broker. They don’t trade against you, so manipulating the price is very unnecessary.

To further reduce the risks associated with forex trading, you must get more familiar with forex trading by reading our forex-related articles :)

Identify who the best forex brokers are, visit to find out!