Forex

Forex

Forex/Trading is a topic that's been done - redone - washed - repeated for a long time now. While I'd like to NOT reinvent the wheel - some of that will get done in this section. So let's get into it a bit.

INTRODUCTION

I'm a regular person that loves information technology (IT). I've been doing this for years. I got into trading as a means of potentially getting out of the "hand to mouth" that most middle-class Jamaicans go through. What I've found is that it is possible to make money in forex - but it takes time and discipline. Time is the main thing I don't have due to work (IT obligations).

With that said - I think I've gone through enough to help others on their own trading path. What payment do I want for the information? None. Just use my affiliate links to sign up with the brokers or services I've listed - that's all I ask.

Why am I not rich out of forex yet? Long story. Let's make it short-ish.

• 2017 - Just heard about trading - tried services and tested brokers.
• 2018 - Learning how to trade. Having some success.
• 2019 - Best trades. Great success. Father passed away.
• 2020 - No trading due to mentality. COVID.
• 2021 - No trading. Started dabbling and re-learning.
• 2022 - Working out the kinks, but actually started back.

That's where it is now. I've given myself until the end of 2023 to get things going. If I can't be very profitable out of trading - I'll put it down at that point and focus on IT solely. The information will remain and will always be free. I do believe that the things I'll show here can help you on your own trading journey - but until I am able to invest the time fully - I won't be able to do more than break even. My work schedule is that hectic.

DISCLAIMER

Do not take any information here as financial advice. Blah. Blah. Blah. If you're here then you want to find out some info - and I'll give it. It's not to be considered as a "holy grail" or anything like that. It's just my point of view on the whole financial market system and how to make money from it.

I'm going to be blunt in some areas and more detailed in others. I apologize in advance.

Jamaica Forex Banking Update – 2021-05-18 and 2022-10-01

As of the first date above - it came to my attention that BNS / Scotiabank Jamaica is no longer allowing transactions to or from Forex brokers. They are explicitly blocking transactions done – tested and confirmed after finding out.

JN credit cards and NCB debit cards are confirmed working. Uncertain if BNS credit cards will work.

Tested in October of 2022. JN Visa Credit Cards no longer work for broker deposits. Uncertain if Sagicor works, but confirmed that both credit and debit cards from NCB are functional.

Wire transfers TO your local account will not have any restrictions.

While it’s known that Forex has gotten more difficult to partake in, this comes as a bit of a shock to me.

This will be updated as I receive more data. There are other banks, but I don’t have accounts everywhere so I can’t test them all. Once I get more confirmed details I’ll update this post or create a new one with full details.

WHAT IS FOREX?

Here's the TLDR.

• Forex is putting a dollar value to the rise/fall of currency pairs.
• Forex isn't for everyone.
• Some of the details here reinvents the wheel.
• Go to BabyPips and study - and watch the videos in the YouTube link.

Here's the links.

cTrader Forex Info - https://www.youtube.com/watch?v=PKkNjY2oorU

BabyPips Course - https://www.babypips.com/learn/forex

HotForex Webinars - https://www.youtube.com/user/HotForexBroker/videos

OANDA Forex Market Hours - https://www.oanda.com/forex-trading/analysis/market-hours

OANDA Currency Strength - https://www.oanda.com/forex-trading/analysis/currency-heatmap

Investing.com Economic Calendar - https://www.investing.com/economic-calendar/

FXStreet Economic Calendar - https://www.fxstreet.com/economic-calendar

MyFXBook Economic Calendar - https://www.myfxbook.com/forex-economic-calendar

ForexFactory - https://www.forexfactory.com/

Forexlive - http://www.forexlive.com/

Longer Version

Information about Forex can be found on INVESTOPEDIA. A very good site for quite a lot of info. I’ve butchered the information that I recall from my own research and added it here. For something more comprehensive please see the linked articles.

https://www.investopedia.com/articles/forex/11/why-trade-forex.asp

https://www.investopedia.com/terms/b/brettonwoodsagreement.asp

The term FOR EX is a shortened form of Foreign Exchange. If you’ve been to a bank or other place and traded in your home currency for some other currency that’s Forex. If you’ve received money from overseas that was in another currency, and it had to be converted to your home currency – that’s Forex.

Forex is simply the exchange of currencies.

Forex History

Goods Trading

In the past – long ago – people would exchange goods for goods. Carrots for potatoes. Sheep for cows. That kind of thing. Don’t quote me on that kind of exchange though – I’m just giving examples. But goods would spoil over time and would be costly to transport. So humans started placing value on shells and stones. Eventually we got to precious stones and gems – like gold and such – and moved to coins then paper. Coins were easier to carry around and it was easier to do business, but in every age you have persons that want to capitalize on the naivety of others – and both coins and paper were counterfeited. Nowadays there are methods in place to reduce counterfeiting, but humans will be humans.

The Gold Standard

Gold was considered a precious metal that had value. Each country then tied their currency to gold. The USD (United States Dollar) was equivalent to gold by (for example) $1 = 1 ounce of gold. The USD was mostly stable, so the other currencies of the world would use the USD as a base to determine what their dollar/currency was valued at. Faster than measuring gold and doing the checks that way. After the Bretton Woods meeting/agreement in 1944, the gold standard was decided upon. This had persons from 44 countries agreeing on using the gold standard – the USD was pegged to a certain amount of gold and the others would value themselves based on the USD. In 1971 the president of the US (Richard Nixon) announced that they would no longer tie the USD to gold. This then gave rise to a floating exchange rate.

Floating Exchange Rate

Currently most countries are still valuing their currency based on the value to the USD. The difference is that the strength or weakness is based on resources, goods or services that are provided between those countries.

Not For Profit – Sort Of

An example of goods and services – and the currency strength – would be Japan. While China makes a lot of stuff, Japan has a far more friendly relationship with most countries. The Japanese Yen (the Japanese “dollar” – their currency – called the YEN – JPY) has been mostly stable versus the USD for an extended period of time. How can the country that provides electronics and vehicles not have a 1:1 ratio (one-to-one) with another country? Well. Because they want to.

If it became more expensive to do business with Japan, countries would take their business elsewhere. There are established and agreed costs for production of goods and services, and this has caused the Japanese bank (“Bank of Japan” I believe) to monitor the floating exchange rate markets and purposely keep their currency at a certain level versus the USD. So if the JPY is gaining ground on the USD – the bank starts doing things to manipulate the market and keep the rate as stable as possible. No major fluctuations are allowed as it would be very bad for business.

Trading For Profit

We’re not interested in keeping things stable. We’re retail traders. We’re interested in making money off the currency fluctuations. This can be done daily, weekly, monthly yearly and a niche can be found to suit any need. If you’re a long term, short term or medium term trader – something is there for you.

Retail Trading

Persons that are not a bank, hedge fund, large business or otherwise directly involved in the daily market movements are referred to as RETAIL TRADERS. These are persons that speculate on the market and attempt to predict the direction.

Brokers and Leverage

In the past you had to trade from a physical location – call into your broker and set your orders. Now, everything is done electronically using software platforms that link to the brokers.

There are now literally hundreds if not thousands of brokers available to choose from. Each provides you with an option for leverage. Trading requires a lot of money, but leverage helps with that. Leverage can work for and against you – as it increases your earning and your losing potential. The broker also may provide different types of accounts so that you can start with a small balance. A “cent” or “micro” account for example would allow you to trade with as little as USD$10 versus other accounts. Standard accounts with leverage have recommended minimums of USD$300-$500 and accounts with zero leverage would require a minimum of USD$10,000 if I’m not mistaken.

Section Closing

With those things in mind, let’s move on to the more exciting part. Actually setting up and trading. And how to do it and make some profit. If you find that you’re unable to profit on the demo account – don’t move to live. Work on the demo until you’re able to make profits.