Synthetic indices are financial instruments created using mathematical formulas, simulating price dynamics and market volatility. Unlike traditional indices, which derive value from actual assets like stocks, synthetic indices are based on random number generation or other predetermined formulas.

Their design ensures a level of market volatility that mirrors real financial markets, giving traders an environment to hone their strategies without the direct impact of actual market events.

A great benefit is that you can trade these markets 24-7.

Quite simply, it’s the global market that allows the exchange of one currency for another. If you’ve ever traveled to another country, you usually had to find a currency exchange booth at the airport, and then exchange the money you have in your wallet into the currency of the country you are visiting.

It’s these changes in the exchanges rates that allow you to make money in the foreign exchange market.

The foreign exchange market, which is usually known as “forex” or “FX,” is the largest financial market in the world.

The forex market is open 24 hours a day and 5 days a week, only closing down during the weekend.

The day starts when traders wake up in Sydney then moves to Tokyo, London, Frankfurt and finally, New York, before trading starts all over again in Sydney!

The simple answer is MONEY. Because you’re not buying anything physical, forex trading can be confusing. In forex trading, when you buy, say, the US dollars, you are basically buying a “share” in the USA economy.

You are betting that the USA economy is doing well, and will even get better as time goes. Once you sell those “shares” back to the market, hopefully, you will end up with a profit.

In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country’s economy, compared to other countries’ economies.

By the time you understand these Free Trading Ingredients, you’ll be eager to start trading.

Majors

The currencies included in the chart above are called the “majors” because they are the most widely traded ones.

We’d also like to let you know that “buck” isn’t the only nickname for USD.

Be your own trader.

In other words: Don’t follow someone else’s trading advice blindly!

Just because someone may be doing well with their method, it doesn’t mean it will work for you.

We’re all in different situations in life, and we all have different market views, thought processes, risk tolerance levels, and market experience.

Have your own personalized trading plan and update it as you learn from the market.

Developing a Trading Plan and sticking to it are the two main ingredients of trading discipline.

But trading discipline isn’t enough. Even solid trading discipline isn’t enough.

We want to be successful traders!

And having brick solid trading discipline is the most important characteristic of successful traders.

A trading plan defines what is supposed to be done, why, when, and how.

It covers your trader personality, personal expectations, risk management rules, and trading system(s).

When followed, a trading plan will help limit trading mistakes and minimize your losses.

After all, “If you fail to plan, then you’ve already planned to fail.”

A trading plan removes any bad decision making in the heat of the moment.

Your emotions can consume you when money is on the line, causing you to make irrational decisions. You don’t want that to happen.

The best way to prevent it from happening is to minimize (notice we did not say eliminate) thinking by having a plan for every potential market action.

With the right trading plan, every action is spelled out, so that in the heat of the moment you don’t have to make any rash decisions.

You just simply stick to your trading plan.

A trading plan will make trading simpler than it would be if you traded without one.

Think of when you use a GPS.

You enter where you want to go. It then figures out where you currently are and then shows you how to get to where you want to go.

You’re able to constantly check on your GPS to see if you’re still on the right track.

When you make a wrong turn, it knows how to adjust, and it points you back in the right direction.

A trading plan is your trading GPS. It will show you where you currently are as a trader and help you get to your destination: consistent profitability.

You’re trying to get to this Promised Land called “Consistent Profits,” but since you have no way of knowing whether you’re headed in the right direction, you’ll most likely end up blowing out your account.

With a trading plan, you’re able to know if you’re headed in the right direction. 

You’ll have a framework to measure your trading performance. And just like a GPS, you’re able to monitor this continually.

This allows you trade with less emotion and stress.

Without a trading plan, this would be nearly impossible.

Most importantly, if you suck at trading (and you certainly will in the beginning), you will know it is down to one of only two reasons: either there’s a problem in your trading plan or you are not sticking to your trading plan.

If you’re trading without a plan, it’s impossible to know what you’re doing right from wrong.

“If you fail to plan, then you’ve already planned to fail.”

Obviously, a trading plan doesn’t guarantee success, but a good plan that is followed will help you stay in the game longer than traders who don’t have a trading plan.

SURVIVAL is better than failure and it should be your first goal as a newbie trader.

Remember, 90% of new traders don’t make it.

You want to be part of that special “10%” that does make it.