Understand Forex Leverage

By Ahmad Hassam

Whats so special about Forex Leverage? Another feature of forex markets that differentiates it from other financial markets is the astronomical level of leverage that is commonplace in the forex world.

Leverage is used to amplify or magnify the equity in your trading account. The usual level of leverage offered by forex brokers is 100:1. Some Forex brokers can offer up to 400:1 leverage on the average retail trading account. The implications of this are mind boggling. No other financial market offers even close to this level of leverage. This means that $1 in a traders forex account can control up to $400 in a currency trade.

Leverage is type of financial magnification by definition. Forex leverage can both be a very positive feature as well as a very negative one. Forex leverage is a double edged sword. It is true that high leverage magnifies profits. However, it also magnifies losses equally.

Used with a great deal of caution, however, high leverage of the magnitude found in forex trading can offer tremendous possibilities to the upside as well as the downside. However often, this high level of leverage summarily wipes out otherwise healthy trading accounts.

If you have been trading stocks than you already know that stock brokers only offer leverage ratio of 2:1 on margin accounts. The futures market is better. FCMs (Futures Commission Merchants) offer leverage of 10:1 to futures traders. But in case of forex trading, common leverage ratios offered by forex brokers range from 50:1 on the low side all the way up to 400:1 on the high side. Even on the low side, as compared to the amount of leverage available in other financial markets, the sheer magnitude of forex leverage far eclipses whatever leverage is available in other markets.

In practical terms, what this means to a forex trader is that a standard lot of $100,000 for example can be traded in EUR/USD currency pair with only $250 in trading account margin. Of course, this is assuming that 400:1 leverage is utilized.

In other words, for every $1, you as a forex trader are in fact controlling a whopping $400. In this particular example, $250 in your forex trading account can control a trade of $100,000 using 400:1 leverage.

Some brokers even advertise that you can open a trading account with $50. With $50 you can trade a mini lot of $10,000 using a 200:1 leverage ratio. The fact that a small amount of money can control a large amount of money in forex trading can certainly serve to magnify potential profits. Can you handle this much leverage while trading? The amount of risk involved in using this high level of leverage is also equally magnified, however on the flip side of the coin.

High leverage trading is aggressive trading that is both characterized by high risk and high reward potential. Therefore, it is advisable to use caution when trading with the substantial leverage common in forex trading.

Dont get hoodwinked by the forex broker advertisements. Too much leverage is dangerous. Even a small movement in the market can be magnified many times by using leverage making large profits for you when the market moves in your favor. Now this is the positive side. You need leverage in forex markets because the size of the currency pair movements is too small. So you need to magnify it with leverage. However, when the market moves even a small amount against your position, your whole trading account can get wiped out. This is the dark side of using too high a leverage.

What is the safe level of leverage that you can use in your trading? In the beginning, dont use more than 5:1 leverage in your trading. With experience, you can increase that level to 10:1 or 20:1 but this much leverage would always be sufficient for you. - 23222

About the Author:

Mr. Ahmad Hassam is a Harvard University Graduate. He is interested in day trading stocks and currencies. Try 1500 Pips a day Forex Signals. Discover a revolutionary Forex Robot Trading System!

Work Out Your Foreclosure And Keep Your Home

By Doc Schmyz

The last thing anyone wants to loose is your house. Unfortunately even though we know this fact, sometimes we tend to take our mortgage payments for granted and end up loosing our homes. When a borrower fails to pay his or her mortgage for a number of payments (usually 5 or 6) the lender will issue a foreclosure by selling the house or repossessing it.

More often than not lenders often lead their borrowers to believe that they don't have other options available. There are other alternatives that homeowners can use to keep their house off the auction block.

These are some of the options that homeowners can use.

Short stop

You can get a short refinance for the foreclosure of your property. If you don't want a new loan to cover an existing one, you can ask the help of a friend. A borrower's friend or relative can buy or pay off the mortgage.

Negotiate a payment plan

You (the homeowner) agree to pay a portion of the amount and agree to pay the rest in the following months. The homeowner also shows proof of their income and pays a down payment. This is a much easier way and most lenders agree to this plan.

Change the plans

In some cases a temporary change in the terms of the loan can be given when properly negotiated. These changes include but are not limited to, amortization extension and reduction of interest rate.

Third party sale

The property on foreclosure is sold to a third party. The proceeds will go to the mortgage lender as a settlement for the debt.

Friendly third party sale

The third party who buys the property sells it on foreclosure to clean the deed of other holders. Then the property is sold back to the borrower.

These are just some of the options that borrowers can utilize in attempting to retain their properties. Remember these alternatives are outside the original terms of the agreement. Homeowners may have to negotiate their way with lenders and banks. If borrowers don't want to end up doing any of these alternatives it's best to avoid missing your payments. Preventing home foreclosure is still better than looking for a cure. - 23222

About the Author:

Doc Schmyz has worked with investors all over the US and Canada. He built a free website shares Real estate investing information for all over the US. Find real estate information by state

New to Forex? Read This First...

By Ash Naeck

The word trading is as old as mankind himself and is still present in nowadays world. Although it comes in different forms and processes, trading carries the same principle that it did thousands of years ago, which is the exchange of a particular good for another.

Trading in the older days was referred to as the barter process, where one would exchange some vegetables to get some rice in return. The process of bartering is thought to be the main source from where trading originated.

Nowadays with advancement in technology, trading is done by the use of a piece of paper commonly referred to as money. The process is still the same and the exchange of goods is still processed in the same way with only difference the use of money as the prime medium.

In the era we live today, trading is far more than an exchange of goods and services. Trading has taken new lengths and goes beyond the mere exchange of goods. This century has witnessed the rise of the currency traders. They are the ones, who trade the currencies of other countries through the process of buying and selling.

This fascinating market, where buying or selling the currency of a country against another, is called forex. With a staggering US$3.5 Trillion traded per day, this makes the forex market the biggest existing financial market to date. No other market compares to the currency market and its volatility.

Major corporations such as Banks and Hedge funds play a big role in this market on a daily basis. Those Banks and Hedge Funds are referred to as the "Big Boys". They deal in millions of dollars on every single position they take thus causing a stir in the value of the currency. If you are familiar with the currency quotes, you may have noticed that those values never stay the same throughout the day. They are subject to changes due to the buying and selling that takes place on the currency market. Those changes in price are where the profit is made and losses incurred.

What makes the Forex market even more appealing than the stock and futures market is the fact that it is a 24-hour market which is opened nearly 7 days a week. Trading opens in Sydney, Australia on Monday morning. Then the Tokyo market opens followed by the European market. One hour after the open of the European market the London market becomes active. The UK market is considered to be one of the largest and most active markets in the currency world. Finally we reach the New York market, which is the last market to open each day.

The major pairs which are the EUR/USD, GBP/USD, USD/CHF and USD/JPY are the most traded pair on the market. Next are the YEN pairs namely GBP/JPY and EUR/JPY, the commodity pairs AUD/USD, NZD/USD and USD/CAD which are believed to be the second most traded pairs on the currency market.

My first encounter with forex goes back to when I was in university. I knew nothing about the forex market and the way it operated. I had a mental blockage at a certain point to how the process of buying and selling a currency could actually work. Well after some research, it all made perfect sense. The world of today is not limited to buying/selling goods and services only but had open its doors to the ability to trade in currencies of other countries too.

Forex traders take advantage of buying and selling currencies they believe will appreciate or depreciate respectively. If they know what they are doing most of the time those appreciation and depreciation will turn out into some nice profit. Good traders make a great living through the process of buying and selling on the market.

Participating in this amazing market that is the forex has never been easier. All the tools required are available to individuals like you and me, the only thing needed is some proper education that will help understand this market.

Here is what you will need before starting:

- A computer

- Internet facility

- A starting capital

- A broker

That's it, nothing more nothing less!

It may look simple but before you decide to risk your hard earned money make sure you understand the ins and outs of the forex market. I have been involved with the market for 5 years now and have never closed my doors on learning new things. Education is crucial if you are serious about trading. Some great points to remember is to always be disciplined, humble and ready to learn. Write down your goals on a piece of paper and take the idea of making millions out of your mind, you more than likely will lose money with this particular mindset. Follow your plan this will help you pave your way to success. - 23222

About the Author:

Learn more about Forex Trading. Stop by Ash Naeck's site where you can find out all about the best Forex Educationproviders out there.

What Are Tha Best Techniques To Use In Advertising For A Rental Premise In Order To Attract The Right Tenants

By Connor Sullivan

It is important to utilize the correct techniques to lure occupants as the homeowner will be assured that his house will be given care of and the leased income will be fixed. There are many methods that can be used to attract good tenants and avoid the damaging ones. However, the most common option for people living in Rhode Island is property management Providence. Providence property management is a skilled management corporation that specializes in a wide array of housing needs. If landlords really want to rent out their premises to trustworthy tenants, then there are few basic tips which they must follow.

It is very important to acknowledge the various techniques in looking for a tenant. There are many methods that landlords can implicate in order to look for the right tenant for their rental premises. Firstly, posting online is a wonderful way to feature the rental premise. There are some websites which charge a little fee for advertising but other classified sites are free and they work excellent as well. It is also necessary to freshen the advertisement occasionally. Another technique that can be utilized to lure tenants is by including photos of the various areas of the home such as the bathroom, kitchen, living room and bedroom. The conditions and the amenities and facilities provided shall also be noted down.

Word of mouth is another wonderful way to let individuals know that there is a home for rent. The word will quickly advance and if the first individual is not concerned about in renting the premise then he may be able to find somebody else who is certainly planning to rent. Landlords can also place signs in their garage so that nearby people and neighbors know that there is a house for rent. There are also possibilities of the neighbors knowing of individuals who are searching for a rental home.

Real estate professionals can also provide good exposure to homeowners but there are advantages and cons of hiring a real estate agent to make a deal for the house. It is possible for such agents to get a tenant easily but at the same time it can be very costly to get the home listed with the professionals. For the aid that professionals offer, they even charge a full month's rent. Posting in magazines is becoming ancient nowadays, but this technique still works. It may also be very costly to advertise in a magazine, but at the same time the landlord will receive plenty of exposure.

It normally takes couple of months before finding the right tenant to rent the premises. Therefore, it is important to stay persistent and keep up with marketing financial plan. After three to four months, if homeowners are still unsuccessful in finding a suitable tenant, then they might consider lowering their rental price as the financial value is a major factor which can affect the value of houses. As it is a great idea to advertise in as many places as attainable, it is also important to avoid advertising at places which will lure damaging tenants. - 23222

About the Author:

Connor R. Sullivan recently met with an expert in property management Providence area to help him find office space in the area. He purchased a second home from Providence property management company to use as an investment.

Position Trading Explained (Part II)

By Ahmad Hassam

A professional currency trader may be confident that the US Dollar is indicating overall weakness and the Euro is indicating overall strength for the coming six months after performing the fundamental analysis on both economies.

Keeping in view the overall strength of Euro and the weakness of US Dollar, the next step for the position trader would be to open a long position in EUR/USD pair. This simultaneously provides the position trader with long Euro position and a short US Dollar position.

This combined trading position fulfills the fundamental outlook of the position trader on both the currencies. So the long term directional bias has been formed by the position trader on the basis of fundamental analysis.

However, pinpointing the best time for the trade entry as well as setting risk managed control strategies is best accomplished by using technical analysis. Position trading depends on using fundamental analysis in identifying a profitable position in the currency market and then using technical analysis in setting up the actual trade.

So the position trading uses fundamental analysis in pairing strength with weakness. Now this concept fits extremely well with the forex markets as all currencies are traded in pairs unlike the stock market or for that matter other financial markets.

Trading forex requires a directional commitment on two currencies for each trade, so position trading is ideal for forex trading. Position trading with the strength/weakness model is the most logical fundamental method for approaching long term forex trading.

Buying one currency because it looks like it will become stronger while simultaneously selling another currency because it looks like it will become weaker is a better way to trade as compared to other financial markets.

What should be your first step to identify a strong/weak pair? Your first step as a position trader should be analyze the Central Bank policy statements, economic growth factors of these countries, global economic news etc to identify the currency with the strongest positive future prospects and the currency with the strongest negative future prospects at a given point in time. You will have to do fundamental research and analysis on all major currency pairs as a position trader.

Suppose you identify AUD and JPY as the strongest gainer currencies in the foreseeable future while CAD and CHF as the strongest loser currencies by performing fundamental analysis. Possible currency pairs for position trading could be long AUD/CAD, long AUD/CHF, short CAD/JPY and short CHF/JPY.

Price action is never ever linear. It is always up and down with minor trends superimposed on major trends. You can enter the trades with the help of technical analysis and hold them as long as they move in the correct direction disregarding minor corrective swings and market noise.

Position trading if done properly can be one of the most effective methods of extracting long term profits from the forex markets. Position trading maybe the most difficult method of approaching forex trading for the beginners! It requires a great deal of patience and faith in ones own analysis to weather the inevitable swings against the trading position. - 23222

About the Author:

Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Try Strignano's Forex Signals free. Discover a revolutionary Forex Robot Trading System!