Forex overview

Let's first understand some basics about forex trading. Forex stands for For(eign) Ex(change). Trading in forex means that you are buying and selling currencies of other countries with your own country's currency OR with foreign currencies that you possess.
Before going any further, you must first check with your own country's rules and regulations about individuals trading in the currency market, as opposed to trading in shares and stocks of companies. This is a significant difference. If you are not allowed you may be in for penalties, which could also include imprisonment in some countries. Therefore it is essential you find out your actual position by checking with a legal practitioner or a bank in your country.

Just as you trade in the stock market, buying and selling stocks and shares, based on your need for cash, or the reverse, and sell when you think that the company you invested in is not doing well enough, or the economy is going through a bad time - say, unemployment is high, inflation is high, interest rates have been raised, imports are up, exports are down, there is political instability, and much more - then you would have to take a position to sell or not to sell. If you think you can hold on, which depends upon your sustainable cash reserve, you can either buy additional shares of the same company based on your judgment or instinct that things will get better. In that case you may be able to profit in the long run. There is however no guarantee.

Forex trading also takes place in the same manner as described above, except that instead of dealing with stocks and shares, you are dealing with cash and in foreign currency. Foreign exchange trading is subject to the same conditions of demand and supply. There is one further important thing to be noted is that in forex trades, the players are big boys; Governments are the foremost and by far the largest players since they are dealing with the big bully strength of their country, banks, financial institutions who again have a very good backing in terms of reserves and can thus afford to drop a little and make it up later.

Knowing about country's currency

In dealing in foreign currency, you need to know quite a bit about the country's currency you are trading in, that is, either buying or selling that country's currency. You need to know something about that country's political situation, its economic profile, whether it is a poor country or a rich country, or whether it is a country which has potential and has moved to recognize that potential by setting up an policy framework to support that. You can find about a country by visiting a number of sites that are available about the country's performance. You can visit the International Monetary Fund website, or the Asian Development Bank website, in the event you are thinking of dealing with those countries. These institutions carry a wealth of information about the world economy in general, and also focused reports on various countries. Research is important. Please bear this in mind.

You can enter the market either through your bank, in case you are allowed to, and if not, through an investment fund which deals with currency markets, or offers a mix of stocks and currency trades. If you wish to trade on your own, then there are a large number of automated software available on the internet which you could look at.

Forex automated software

The automated software available is priced, and gives you a band and time frame during which time your bid is valid. If no offer is made, or an offer is not taken, then the quote automatically expires at the end of the time frame.

In choosing software for forex trades, you must bear in mind a number of points, which require very serious consideration:

1. Is that software so automated that it is not updated or revised when you are putting in a bid, when changes have taken place in the marketplace due to some problems in that country in which you are bidding?
2. Does the software alert you to significant movements in prices of the currencies ? Note that currency trades take place to nearly 4-9 decimal places, because of the huge amounts involved.
3. Does the software seller have a really good research team in place who track the world economy, the developments in the world which can sway the market? Sway here means that there is a steep decline or a sharp appreciation. Normally, if the market is doing a ‘pendulum' swing, it is better to be cautious and careful.
4. What is the minimum amount you can bid, and what would be the margin money you would have to provide.
5. What are the flexibilities that are available to you? This means can you simultaneously place a different bid for a different currency, so that you can possibly cover a loss, with a gain on the other currency.

Let us be clear about one thing. Everyone would claim his software is best. So, how to judge?
There are a number of ways you can find out. Most of these software offer a free trial period. You can use that trial period to see whether you are getting your money's worth or not. Start small. Play it for about a week. If you are updated from time to time about the trades you made, and you start receiving currency market reports, which sound logical to you, and is in line with what you have heard, seen or read, then try it.
If you are not satisfied, or you are losing, withdraw. DON'T LOSE MONEY.
You could ask your banker to recommend particular automated software for you. They are in the market for a long time, and they would certainly be using one, which may have been tailored to their needs. But the forex dealer, an employee of theirs, would certainly know which one is really good for you. You could also ask your investment banker, or investment broker. They would know the real people who have used the software and therefore you get a first hand report.

Here are some automated systems that you can check out:

Forex Autopilot
Forex Killer
Forex Assassin
Forex Range Trader
Forex Autopilot System
5EMAs Forex Trading System
Stealth Forex Trading System

Here are 10 most popular automated trading software's, all of them except the last one has 8 weeks money back guaranty, so try it, learn it, smell it see whether it makes money for you or not and if you don't like it you will get your money back during these 8 weeks.

There are ways for you to learn how to judge and play the market. There are websites which offer free training on a simulated 'real time' basis. Learn by using those tips and tricks. It is better to spend a little more today and learn, rather than losing a lot of money at once.

The moral of the story is "Look before you jump".