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2. Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Earlier today, Merrill Lynch reported 7.9 billion losses for the third quarter, exceeding the 5 billion estimate made earlier this month. The larger-than-expected writedown promoted investors to reduce demand for carry trades, boosting the yen against high yielding currencies. The yen is trading around the 114 level against the dollar on Wednesday.ECB board member Gonzalez said today “a mechanical increase in inflation above 2% is not sufficient reason to change our assessment of risks to price stability.” He said the central bank will ignore an inflation rise if it is driven by oil price surge recently, indicating the central bank would not rush to lift rate. The ECB is expected to keep its interest rates at 4.00% unchanged till the end of this year.German IFO survey for October is due early tomorrow morning.
The headline is seen to fall slightly from 104.2 to 103.8. The current conditions index is expected to change from 109.9 to 109.4. The expectations index is expected to change from 98.7 to 98.4.EURUSD will face interim resistance at 1.4280, followed by 1.43 and 1.4340. Additional ceilings will emerge at 1.4370, backed by 1.44. Support starts at 1.4230, backed by 1.42, 1.4170 and 1.4150. Subsequent floors are eyed at 1.41. GBPUSD encounters interim resistance at 2.0540, backed by 2.06 and 2.0650. Subsequent ceilings will emerge at 2.0680, followed by 2.07 and 2.0720. On the downside, support begins at 2.05, followed by 2.0470 and 2.0450. Additional floors are eyed at 2.0430, backed by 2.04 and 2.0350.USDJPY encounters interim resistance at 114.30, backed by 114.50 and 114.80. Subsequent ceilings will emerge at 115, followed by 115.20 and 115.50. On the downside, support begins at 114 and 113.80, followed by 113.50. Additional floors are eyed at 113.20, backed by 113 and 112.70.
Making money in the Forex market might appear a cake walk to outsiders.
Does this mean that it is easy as pie to make money on the Forex market? Absolutely not! Since we now know that it is not as easy as it seems to make money on the Forex market, why do some traders succeed while others fail? That is not an easy question to answer. Something does set apart the profitable traders. They do not follow the crowd. These traders think independently from the crowd. How long does it take to see consistent profitable results in the Forex market? This, too, is not an easy question to answer. It varies from person to person. One thing is for sure - this cannot be done in a short time frame. It is a process that could take years to see desired profits.
Here are a few things to consider if you decide to trade in the Forex market that may hasten the process of realizing a profit: have a trading system in place, education, use money management, be aware of psychological issues and have the proper discipline to follow your trading system as well as your trading plan. Benefits of Online Forex Trading Thanks to the Internet being available to almost everyone, the Forex market may be accessed with ease. Computers are now able to make complex charts that are very beneficial when you go to trade in the Forex market. Forex traders can do business 24 hours a day no matter what their geographical location may be. Daily transactions in the Forex market have increased to two trillion USD. It is quite easy to open a forex trading account. There are even free practice accounts that can be set up which allow you to test your skills before you make any transactions with real money. Traders can trade with different currencies in different markets at the same time and not have a problem doing it.
Online forex trading touts a lot of liquidity and flexibility. The trader can trade and access quotes in real time when he deals with online forex transactions. A very important benefit is that forex trading has virtually eliminated the bears and bulls of the trade. This is the only trade market that does not have these elements. There are no commissions, exchange fees or any other hidden costs involved with online forex trading. The trade is done very quickly and there is no delay of any kind. It literally takes just seconds to execute a trade or fill or confirm the same. Small traders have more leverage in the Forex market. There are indeed many benefits to online forex trading, but you also have to look at the other side of the coin. Online forex trading is risky. You should not invest any more money than you are willing to lose. Remember, it takes education, patience and practice to become good at forex trading.
1. Short Gbp/Usd @ 2.0515 or better
2. Short Gbp/jpy @ 235.68 or better
I will not give stop loss or take profit since that is on the money management side. Manage it well and with a good system you can gain.
Here are the following important events in the forex world that have already elapsed in the month of october and the rest that are going to happen.. and new readers pls check out over forex ebooks section
|3 Wednesday||RBA Interest Rates Decision. (09.30 Local Time).|
|4 Thursday||BOE MPC announces interest rates decision. 13.00 CET.|
ECB Governing Council meeting. Interest rates decision at 13.45 CET. News conference at 14.30 CET.
|5 Friday||US Employment situation. 14.30 CET.|
US Consumer Credit. 19.00 CET.
|8 Monday||US, CA and JP market holiday.|
|9 Tuesday||US FOMC Minutes. 20.00 CET.|
|10 Wednesday||BOJ starts two-day monetary policy meeting. (to oct 11).|
Discussion group on Euorpean monetary policy. 20.15 CET.
US Whole sale Trade. 16.00 CET.
|11 Thursday||BOJ monetary policy meeting (final day). Release of monthly economic report. 08.00 CET, BOJ Governor Fukui to holds news conference at 08.30 CET.|
ECB publishes its monthly bulletin. 10.00 CET.
ECB Pres Trichet and Bank of Russia Chairman Ignatyev news conference. 11.15 CET.
The European Commission issues its quarterly growth forecast for the euro zone.
US International Trade. 14.30 CET.
|12 Friday||US PPI and Retail Sales. 14.30 CET.|
Fed Chairman Bernanke speaks on "John Taylor's Contributions to Economics". 15.10 CET.
|15 Monday||Fed Chairman Bernanke speaks before the Economic Club of New York.|
|16 Tuesday||BOC Key interest rates policy announcement. 13.00 CET.|
US Industrial Production. 15.15 CET.
|17 Wednesday||BOE to publish minutes of its oct 3-4 MPC meeting.|
US PPI and Housing Starts. 14.30 CET.
US Beige Book. 20.00 CET.
|18 Thursday||BOC releases Monthly Policy report. 16.30 CET. News conference at 17.15 CET.|
US Leading indicators. 16.00 CET.
|25 Thursday||RBNZ Official Cash Ratio (OCR) announcement.|
ECB Governing Council meeting. No interest rates announcements scheduled.
US Durable Goods Orders. 14.30 CET.
US New Home Sales. 16.00 CET.
|26 Friday||US Consumer Sentiment. 16.00 CET.|
|30 Tuesday||US Consumer Confidence. 16.00 CET.|
|31 Wednesday||Norwegian central bank’s interest rates decision. 14.00 CET. News Conference at 14.45 CET.|
US Fed FOMC interest Rates decision. 20.15 CET.
Its article time again. Worked on this for a while.
I compiled the most frequently asked questions with regard to the Forex market. Here it is. feel free to put it on your blog or site but just make sure you mention where you got it from.
MOST FAQ about the FOREX MARKET
With over $1.4 Trillion traded daily, the Forex market stands out as the largest financial market in the world currently. Still, it is an unfamiliar territory to many common people and amateur investors. If you are a fresher or a pro and would like to refresh your knowledge on the Forex market, you are on the right page. In this article, I will cover the most commonly asked questions related to the Forex market. For free ebooks and guides on getting started with Forex trading, Go here! And also check on the same site, the article “Why Forex?” (Its in the blog archive and gives you some awesome reasons why you really must invest in the forex market) And to enlighten yourself on the FAQ regarding the Forex market, please continue reading this article.
How does this market differ from other markets?
It differs from other markets like stock market in the simple fact that its not regulated by a central governing body. There exists no clearinghouses to guarantee the trades and there is also no arbitration panel to resolve and decide upon disputes. Credit agreements are what the trading is based on. So, truthfully speaking, business in the largest liquid market depends simply on a metaphorical handshake.
This might seem out of the world or plain weird to investors used to structured exchanges like the NYSE or CME. But this arrangement actually works out pretty well in practice as investors and brokers must compete and co-operate with each other at the same time.
The FX market is so different from other markets in some ways that are sure to raise eyebrows. If you feel that the EUR/USD is going to spiral downwards in near future? Feel free to short the pair at will( Selling short is the opposite of going long. That is, short sellers make money if the stock goes down in price. This is an advanced trading strategy with many unique risks and pitfalls. Novice investors are advised to avoid short sales.)
There is no limit to the size of the position you can gain. Theoretically speaking, you could sell $100 million of currency if you had the capital to do so. If you could some how manage to gain information on the immediate future of a particular currency, you could well be a millionaire in no time. The Fact is European economic data, such as German employment figures, are often leaked days before they are officially released.
Before we leave you with the wrong impression that Forex or Foreign exchange is the Wild West of finance, we must also note that this is the most liquid market in the world. Forex is a 24 Hours trading opportunity. It’s not going be like you wait for the Forex shop down the street to open. As a Forex Trader, you get the opportunity to trade 24 hours from Sunday 5:00 pm (ET) to Friday 4:30 pm.
This means you can do trading upon your convenience and based on your schedule. It also provides you the opportunity to act immediately upon golden breaking news from the market.
Where is the commission in FX?
Investors in stock market, futures or options generally use a broker who acts as an agent in the subsequent transactions. The broker does an exchange based on the investor’s instructions. For this, he gets paid a commission.
However, the Forex market doesn’t have commissions. It is a principals only market.
Forex firms are dealers, and not brokers. This is a very critical distinction that all investors must understand. Commission is not charged by them. They make their profits through the bid-ask spread (The amount by which the ask price exceeds the bid. This is essentially the difference in price between the highest price that a buyer is willing to pay for an asset and the lowest price for which a seller is willing to sell it. For example, if the bid price is $20 and the ask price is $21 then the "bid-ask spread" is $1.
What is a pip?
Pip is an abbreviation used for “Percentage in Profit” It is the smallest increment of trade in the Forex market. In the Forex market,prices are stated to the fourth decimal point. For eg: a Cadbury bar that costed $2.70 in your nearby supermarket will be quoted as $2.7000 in the Forex market. A change in the fourth decimal of that will be a pip.
We can simply put it that it is 1/100th of 1% or 0.0001 %
What are you really selling or buying in the currency market?
Simply “NOTHING”. The Foreign exchange or Forex market is merely a speculative market. There is no physical exchanging of currencies there. All the trades are present as computer entries and netted out based on the market prices.
For accounts that are denominated in dollars, all the profits and losses would be calculated in dollars and recorded on the traders account in dollars.
Which currencies are traded?
Some mind blowing and exotic options would be the Thai bath or the Czech koruna , but the majority of trading in the Forex market is based on the seven most liquid currency pairs.
and the three commodity pairs:
These currency pairs, along with their various combinations (such as EUR/JPY, GBP/JPY and EUR/GBP) account for more than 95% of all speculative trading in the Forex market..
Every field possesses its own jargon and the Forex market is no different as such.
Here are some terms which are worthwhile learning.
Unpredictability is an integral part of the foreign exchange market (FOREX)
So whenever you need to check the latest currency values be it USD value today or latest GBP/USD value, you can check here. The latest values are in the table and the ticker. Any more currency requests that you would like us to keep a track on will be added.
And yeah, read this article
The major currencies pared their gains versus the dollar in the Tuesday session as the upcoming G7 Finance Minister’s meeting looms. Traders pushed the Aussie beneath the 0.90-level to 0.8825 and the sterling below the 2.03-mark. With growing unease over whether the G7 communiqué will address concerns about recent dollar and yen weakness, both currencies regained footing amid unwinding of heavy shorts.
The greenback kicked off the New York session initially weaker on the heels of soft US economic data. The reports included a record net overall capital outflows (TIC) in August at $163.0 billion, compared with a $94.3 billion inflow a month prior. The new private capital outflow component hit a record $141.9 billion versus an inflow of $56.0 billion from July. Industrial output for September was in line with consensus estimates at 0.1%, down slightly from August at 0.2%. Capacity utilization was down marginally at 82.1% versus 82.2% from July. Meanwhile, the NAHB housing market index continued to suggest deteriorating conditions, falling by more than estimates to 18 for October versus 20 in September. The decline marked the fifth consecutive month the index has fallen, hitting its lowest level since initiation in 1985.
Fed Chairman Bernanke provided few clues into the FOMC policy decision at the end of the month, sounding an upbeat tone on credit conditions and saying the improvement bolsters the scope for achieving moderate growth with price stability. He reiterated uncertainties looming over the housing market, saying conditions in the mortgage markets remain difficult. Bernanke was optimistic on growth, saying some of the solid momentum from Q2 seems to have carried over into Q3. Although we expect another 25-basis point rate cut from the FOMC this year, we look for the Fed to stand pat at the end of this month, instead opting to ease at the December 11th meeting.
The sterling pulled back sharply after several failed attempts this week to break above the upper channel line near 2.0450. Cable now trades near the base of the channel around the 2.03-level, with the trendline support hovering around 2.230.
Economic data released from the UK revealed mixed inflation readings, with September CPI slightly lower than expected at 0.1% m/m and 1.8% y/y. The retail price index was also lower than expected at 3.9% y/y and 0.3% m/m while the core RPI was unchanged at 2.8% y/y and 0.3% m/m.
With increases in inflation contained at this point, we continue to anticipate the next BoE rate move to be an ease to alleviate tightening credit conditions in the UK. Traders will look ahead to UK August unemployment rate, September claimant count and the minutes from the Bank of England monetary policy meeting.
Articles original source
Glossary of Forex Terminology — find out what the various terms and acronyms in Forex books and analysis mean. Prepare yourself for learning Forex strategies.
Currency Trading Vehicles — how the currency trading is performed in Forex market? This ebook will describe the Forex vehicles for you.
Avoiding Mistakes In Forex Trading — sometimes Forex trading isnt that easy and people make mistakes. Read this ebook to learn how to avoid the most frequent of them.
Cooking In The Forex — become a real «chef» in your daily Forex trading. Be the one who trades and win, not the one who is manipulated by the market.
Day Trading The Forex Market — day trading is the most popular trend in the Forex trading. You trade inside the day, trying to capture the short-term market movements and you gain profit everyday.
Forex Market Conditions — Forex market is an ever-changing entity. Read this Forex ebook for better understanding of that conditions apply to the foreign exchange market.
Guide To Effective Day Trading — a handy guide for those beginning traders that lean to the intraday trading but failed to develop their own successful strategy yet.
Lifestyles of the Rich and Pipped — trading the Forex market leads to the changed lifestyle. The resulting lifestyle is both the reason and the consequence of the successful trading. Try to develop it early in your quest for Forex profits.
The 10 Keys To Successful Forex Trading — an easy way to finalize your basic Forex knowledge is to read these 10 keys to the successful Forex trading ebook.
Study Book For Successful Forex Dealing — an indepth study of all the traits that lead the successful and profitable Forex trading.
A Quick Guide To Trading Forex — not enough time for the big and smart books? Try reading the quick guide to Forex presented in this Forex ebook.
Forex Online Manual For Successful Trading — its always handy to keep some manual like this ready when you want to remember something about Forex or deal with some newly encountered market situation.
FX Power Trading Course — a power trading course on the Forex trading that will help you to transform from the green beginner into a professional with a Forex strategy.
Forex Trading Course — a common Forex course that are abundantly available on-line. Nevertheless it helps.
Forex For Everyone — some say Forex market cant be conquered by every trader wannabe. This book says the otherwise — Forex is for everyone.
Forex Trader E-book — when the book is written by someone with a great experience in Forex trading you not only learn from it but gain a real pleasure from diving into the Forex atmosphere.
FX Wizard — get ready for some Forex magic in this ebook. The Forex wizard strategy is here to help you with the systems and strategies that can be applied in the market immediately.
Trading For A Living In The Forex Market — after you become consistently profitable in your daily Forex trading the next step is to turn the currency market in your profession and live with it. This book will help you with this final transformation.
Forex Trade Book — the titles says it all. If you think that your knowledge on the Forex isnt enough (and I advise you to think that way forever), reading this book will get you closer to the profitable trading by one step.
Forex scalping is “the word” these days! It offers to give you handsome profits with out much of a risk. So lets get started in this article. We are going to cover the facts related to forex scalping for beginners.
Forex Scalping works this way. You look to make a neat profit by making small regular trading within a set time frame. I would put it in a more simple way. You make very small trades, therefore risking a small amount of money ( Of course when you profit as well, you a gain a small amount). You make plenty of such small transactions within a day. So you actually hope that little drops of water will make a mighty ocean. The fact of the matter is that it has never worked and never will.
Because Forex scalping is simply based on an incorrect belief or logic or whatever you want to call it. Infact, I am going to show you in the article why forex scalping can be the easiest way to lose your money in forex trading. Read on!!
Let us first take a look at the market and how they move.
We have approximately Trillions of dollars traded in the market daily by millions of traders. So, it will be ridiculous for us to assume that we can predict what this vast mass of traders will do in a short period of time
Let me direct you towards a Fact:
“All short-term volatility is random.”
Yes, that means prices can go up and down ( up or down? No one can predict). Infact , Neither Support and resistance levels are valid nor any of the technical indicators you have. All will fail in this random environment.
“I have seen successful track records though!”
Sure you have – and they are sold by vendors with a vested interest.
There are loads of them and they are all designed to bring forex scalping to beginners - for a few hundred bucks you get rich, Ha Ha ! that’s Laughable to me!
Please Consider a reality check!
These vendors make the much promising forex scalping systems. Hey , why don’t you guys do forex scalping instead of making these systems. They know it wont work. Hence, lure the unsuspecting ones in to forex scalping
What will be shown to you by them are amazing track records with neat profits with draw downs being a rarity and almost non-existent. A little of your common sense coming in to play will tell you that its too good to be true. And when you get an intuition like that, it probably is “TOO GOOD TO BE TRUE”
Many traders fall in the scheme, lose big time and still wonder “WHY?” or worse “WHY ME”
Take a closer look at the forex scaling track records, you will see the words “hindsight” or “simulation” written all over the track record as a disclaimer.
What does this imply?
That the track record is done in hindsight and simulated, knowing the closing prices!
How hard is that?
Any eight year old kid could do that and so could anyone who can read and write and you can to – My friends, these track records are useless and not even worth the paper they are written on.
Of course , you can try looking for an authentic track record. Take my word that it will take you a long time. I never found one in my life. SO if you do come across one, sure let me know.
The fact is forex scalping for beginners takes advantage of innocent and gullible investors who think making a profit is that easy and they don’t stop to think how authentic these systems are or what logic is in scalping?
If You Want to Win
You need to have odds in your favour. That simply means that you need to trade within longer time frames. That rules forex scalping out
If you are just a beginner at forex trading and looking to make a plunge in the forex market, Make a detailed study on the market. Follow the market for few months before investing your hard money in it. You can find some great ebooks here to get you started.Do avoid the scheming companies wanting you to try forex scalping for the much-promised handsome profits, which will never materialize and do visit my blog for more articles and updates.
Well, its just over 5 days since i started this blog and we have hit 100 unique visitors till now.
Thank you all for this support and suggestions and comments are always welcome.
One generous reader was kind enough to email me with regards to the forex scalping article
and show me that indeed forex scalping does work
Anyways,.. just makes me think that yeah may be forex scalping does work. But its not appreciated by many brokers.
Check with your broker if he lets you forex scalping before you plan to try it out.
Im going to add a few more ebooks in the forex ebooks section.. and working on an article for now.
Im busy tomorrow so you guys will see the article most probably day after
Dukascopy, Interbank forex broker provides best spreads, highest liquidity and marketplace for electronic forex trading.
I am working on making a little collection of decent ebooks on forex trading.
I will get them posted on the blog soon.
So keep checking back for updates!! and yeah bookmark US
You might have pondered over this question and asked yourself a zillion times. WHY FOREX?
In spite of ‘N’ number of businesses that may attract you with promised profits, why should you opt for investing in Forex. Here I am going to list out the reasons why and it just might compel you to invest some money in it to Forex Trading.
LARGEST FINANCIAL MARKET
With $1.5 Trillion(yes, you read it right, its $1.5 Trillion) being traded daily, Foreign Exchange (Forex) has become the largest financial market since the past 3 decades and its domination has only increased if anything.
Forex Trading was left to the professionals till recently. However, now even average investors are willing to invest in it having witnessed its amazing capacity. This explains the sudden surge in the Forex market.
LEVERAGE in FOREIGN EXCHANGE TRADING(FOREX)
Frankly speaking, no business gives you a leverage as that of Foreign Exchange or Forex (FX) for short. No hidden formulas, no confusing strategies or no professional knowledge required, all you need is a decent application of technical analysis along with a logical money strategy.
Ofcourse, leverage can be as harmful as beneficial. No hindrance on risk management means this high leverage can lead to potential high losses or high gains.
TRADING 24 HOURS on FOREX
Forex is a 24 Hours trading opportunity. Its not going be like you wait for the forex shop to open. As a Forex Trader, you get the opportunity to trade 24 hours from Sunday 5:00 pm (ET) to Friday 4:30 pm.
This means you can do trading upon your convenience and based on your schedule. It also provides you the opportunity to act immediately upon golden breaking news from the market.
NO COMMISION FOR FOREX
There is no commission charged towards your profits on Forex. You are allowed to keep 100% of the profits that you make by trading on Forex Market. Thus, this makes Forex Market an attractive and lucrative field of business especially to those who would deal on a regular basis.
HIGH LEVELS OF LIQUIDITY OF FOREX
Another crowd puller is the high liquidity factor of Forex. With about 90% of all currency transactions comprising of 7 major currency pairs, this leads to these currency having price stability, smooth trends and high levels of liquidity. The liquidity is mainly coming from the banks that offer cash flow to the average investors, organizations and market professionals.
STEADY TRADING PROSPECTS
The Forex market is never stagnant, its always on the move. As Forex trading involves buying and selling of currencies, traders can most easily operate in a rising or falling market. This is due to the simple fact that there are always trading prospects whether a currency is rising or falling as its co-related to other currencies. Hence it does not matter whether the market is rising or falling, there are always opportunities for successful trading. All you need is to have a good trading strategy.
With an amazing speed, even large transactions are conducted in a matter of seconds.
Along with these major advantages, there are other pluses like the large profits the Forex Trading promises. It is very much possible for an amateur investor to gain decent profits provided he has made a good study of the market prior to investing. This article was originally written for Currency Trading Made Easy.
You can distribute this article freely as long as you include the original source and this message.
For other free e-books including a beginners guide for newbies in forex, refer previous posts.
25 RULES OF FOREX TRADING DISCIPLINE: by Douglas E. Zalesky
Many people are already starting to pay attention to the newest online trend: E-gold investing.
E-gold investing is a all about a system that allows you to profit from the money that is being traded everyday on the internet. What you're doing when you are trading e-gold (or e-currencies) is that you are providing the backup for internet money. Let me go back a bit. What exactly do I mean by "backup for internet money"?
There is a cashflow of all of the money that is being moved throughout the internet every day. However, this money has to have, for every dollar that is being backed up, a physical backup of that dollar must exist.
This is a very superficial explanation about how the dxgold system works, but to be honest, to profit from it, you don't have to understand exactly how it works to profit from it. If I were to put the e-gold training courses into a metaphor I would say it's very much like driving a car. You don't need to know how it works in order to use it properly.
What you do need to know is the egold exchange process and every step of the way. This may sound complex, but once you get to know it, it becomes a daily routine that takes about five minutes just to check up on.
Investing in e-gold is something that I could describe as a great investing strategy, if you are investing in the long run.
It isn't as fast as a rising stock in wall street, it isn't something that will double your profits in a couple of days, but it is something you can expect to generate a good income from. And the important keyword in that past sentence would be to Expect, because this is a safe long term strategy that is guaranteed to make a profit for you.
This is why I personally think it is plain silly not to learn this currency trading system. You even know how much money you will make each day in advance.
For some it may be tough, but saving a couple of hundred dollars and investing in e-gold can be a very wise decision. As many people have experienced already, it can even turn into a "hands off" second income without the 8 to 5 job.
E-gold is all about discipline. Is about the discipline of having your money work for you and letting it grow, without getting an urge of a shopping spree and taking your money out of your account.
If you think you can wait for a few months and are interested in getting a second income, then the e-gold system could be a good fit for you.
The simultaneous transaction of one currency for another.
An informal network of trading relationships between the world's major banks and other market participants, sometimes referred to as the 'interbank market'. The foreign exchange market has no central clearing house or exchange and is considered an over-the-counter (OTC) market.
The market for buying and selling currencies at the current market rate.
A spot transaction is generally due for settlement within two business days (the value date). The cost of rolling over a transaction is based on the interest rate differential between the two currencies in a transaction. If you are long (bought) the currency with a higher rate of interest you will earn interest. If you are short (sold) the currency with a higher rate of interest you will pay interest. Most brokers will automatically roll over your open positions allowing you to hold your position indefinitely.
The value of one currency expressed in terms of another. For example, if EUR/USD is 1.3200, 1 Euro is worth US$1.3200.
The two currencies that make up an exchange rate. When one is bought, the other is sold, and vice versa.
The first currency in the pair. Also the currency your account is denominated in.
The second currency in the pair. Also known as the terms currency.
USD = US Dollar
EUR = Euro
JPY = Japanese Yen
GBP = British Pound
CHF = Swiss Franc
CAD = Canadian Dollar
AUD = Australian Dollar
NZD = New Zealand Dollar
For a full list, see ISO Currency Codes
EUR/USD = "Euro"
USD/JPY = "Dollar Yen"
GBP/USD = "Cable" or "Sterling"
USD/CHF = "Swissy"
USD/CAD = "Dollar Canada" (CAD referred to as the "Loonie")
AUD/USD = "Aussie Dollar"
NZD/USD = "Kiwi"
Futures Commission Merchant. An individual or organisation licensed by the U.S. Commodities Futures Trading Commission (CFTC) to deal in futures products and accept monies from clients to trade them.
A market maker provides liquidity for a particular currency pair by standing ready to buy or sell that currency by displaying a bid and offer price. Market makers earn their commission from the spread between the bid and offer price.
ECN is an acronym for Electronic Communications Network. A Forex ECN does not operate a dealing desk, but instead provides a marketplace where multiple market makers, banks and traders can enter competing bids and offers into the platform either inside or outside the spread, allowing traders to trade on those prices. Orders are matched to the best available bid/offer price for a small fee or commission.
A dealing desk provides prices and executes trades.
An acronym for 'No Dealing Desk'. A no dealing desk broker acts as an agent, matching up orders to one or more liquidity providers connected to their platform.
One of the participants in a transaction.
The sell quote is displayed on the left and is the price at which you can sell the base currency. It is also referred to as the market maker's bid price. For example, if the EUR/USD quotes 1.3200/03, you can sell 1 Euro at the bid price of US$1.3200.
The buy quote is displayed on the right and is the price at which you can buy the base currency. It is also referred to as the market maker's ask or offer price. For example, if the EUR/USD quotes 1.3200/03, you can buy 1 Euro at the offer price of US$1.3203.
The smallest price increment a currency can make. Also known as points. For example, 1 pip = 0.0001 for EUR/USD, or 0.01 for USD/JPY.
The value of a pip. Pip value can be fixed or variable depending on the currency pair and base currency of your account. e.g. The pip value for EURUSD is always US$10 for standard lots and US$1 for mini-lots. A simple way of calculating pip value is as follows: Divide 1 pip by the exchange rate and multiply it by the lot size to get the base currency pip value. To convert it to your account currency, multiply it by the applicable exchange rate. For example;
EURUSD = 0.0001 / 1.30000 = €0.0000769 * 100,000 = €7.69 * EUR/USD 1.30000 = US$10.00 pip value (fixed)
USDJPY = 0.01 / 120.00 = US$0.0000833 * 100,000 = US$8.33 pip value (variable)
The standard unit size of a transaction. Typically, one "standard" lot is equal to 100,000 units of the base currency, or 10,000 units if it's a "mini" lot, and even 1,000 units if it's a "micro" lot. Some dealers offer the ability to trade in any unit size, down to as little as 1 unit!
The difference between the sell quote and the buy quote or the bid and offer price. For example, if EUR/USD quotes read 1.3200/03, the spread is the difference between 1.3200 and 1.3203, or 3 pips. In order to break even on a trade, a position must move in the direction of the trade by an amount equal to the spread.
Trading with standard lot sizes, generally 100,000 units of the base currency.
Trading with mini lot sizes, generally 10,000 units of the base currency.
Trading with micro lot sizes, generally 1,000 units of the base currency.
The deposit required to open or maintain a position. A 1% margin requirement allows you to control a $100,000 position with a $1,000 margin deposit.
The extent to which you are using borrowed funds to gear your account. Increasing your leverage magnifies both gains and losses. To calculate leverage used, divide total open positions by account equity to get the leverage ratio. e.g. If a trader has $1,000 in his account and opens a $100,000 position, he is leveraging his account by 100 times, i.e. 100:1 leverage. If he opens a $200,000 position with $1,000 in his account, he is leveraging his account by 200 times, i.e. 200:1 leverage.
An order which is executed by dealer intervention.
The order is executed by the broker without dealer intervention or involvement.
The difference between the order price and the executed price.
The extent to which equity is lost in a trading account from a trade or series of trades, measured from peak to subsequent trough, most commonly in percentage terms.
Support is a technical price level where buyers outweigh sellers, causing prices to bounce off a temporary price floor.
Resistance is a technical price level where sellers outweigh buyers, causing prices to bounce off a temporary price ceiling.
Common Order Types
An order to buy or sell at the current market price.
An order to buy or sell at a specified price level.
An order to restrict losses at a specified price level.
An order to buy below the market or sell above the market at a specified level, believing that the price will reverse direction from that point.
An order to buy above the market or sell below the market at a specified level, believing that the price will continue in the same direction.
One Cancels Other. An order whereby if one is executed, the other is cancelled.
Good Till Cancelled. An order stays in the market until it is either filled or cancelled.
Common Trade Types
A position in which the trader attempts to profit from an increase in price. i.e. Buy low, sell high.
A position in which the trader attempts to profit from a decrease in price. i.e. Sell high, buy low.
Common Trading Styles
A style of trading that involves analysing price charts for technical patterns of behaviour.
A style of trading that involves analysing the macroeconomic factors of an economy underpinning the value of a currency and placing trades that support the trader's outlook.
A style of trading that attempts to profit from riding short, medium or long term trends in price.
A style of trading that attempts to profit from buying technical levels of support and selling technical levels of resistance. The upper level of resistance and lower level of support defines the range.
A style of trading whereby a trader attempts to profit from fundamental news announcements on a country's economy that may affect the value of a currency, usually seeking short term profit immediately after the announcement is released.
A style of trading that involves frequent trading seeking small gains over a very short period of time. Trades can last from seconds to minutes.
A style of trading that involves multiple trades on an intra-day basis. Trades can last from minutes to hours.
A style of trading that involves seeking to profit from short to medium term swings in trend. Trades can last from hours to days.
A position whereby the trader attempts to profit from holding a currency with a higher interest rate and shorting a currency with a lower interest rate.
A style of trading that involves taking a longer term position that reflects a longer term outlook. Trades can last from weeks to months.
A style of trading that involves the human decision making process for every trade.
A style of trading that involves neither human decision making or involvement, but uses a pre-programmed strategy based on technical or fundamental analysis that automatically places trades via automated trade execution software.
Assume you have a trading account at a broker that requires a 1% margin deposit for every trade. The current quote for EUR/USD is 1.3225/28 and you want to place a market order to buy 1 standard lot of 100,000 Euros at 1.3228, for a total value of US$132,280 (100,000 * $1.3228). The broker requires you to deposit 1% of the total, or $1322.80 to open the trade. At the same time you place a take-profit order at 1.3278, 50 pips above your order price. In taking this trade you expect the Euro to strengthen against the U.S. dollar.
As you expected, the Euro strengthens against the U.S. dollar and you take your profit at 1.3278, closing out the trade. As each pip is worth US$10, your total profit for this trade is $500, for a total return of 38%.
Forex scalping is one of the most popular ways for new traders to get into forex trading and offers the appeal of regular profits and low risk. In this article we are going to cover all the facts related to forex scalping for beginners, so lets get started.
Forex scalping in essence, looks to trade within daily time frames making small regular profits, using tight stops to generate big profits overtime - the big problem is it has never worked and never will.
Because the logic it is based on is simply incorrect and if you read on, we will tell you why and show you the evidence, which shows why one of the best ways to lose money in forex trading is forex scalping.
Let’s take a look at the market first and how they move.
We have trillions of dollars traded daily, by millions of different traders and to say that you can say what this vast mass of traders is going to do in such a short time frame, as a few hours is laughable.
All short term volatility is random.
This means that prices can and do go anywhere in a day – support and resistance levels are not valid, so it doesn’t matter how good your technical indicators are they will fail in this random environment.
I have seen successful track records though!
Sure you have – and their sold by vendors with a vested interest.
There are loads of them and they are all designed to bring forex scalping to beginners - for a few hundred bucks you get rich, sure you do.
Take a reality check!
These vendors make money selling forex scalping systems, NOT trading them - their far too clever for that.
What you will see is an unbelievable track record that shows great profits with little or now drawdown and common sense tells you that if it’s too good to be true and it most are!
Many traders however fall for the ploy and buy the system, lose and wonder why.
If they were to take a closer look at the forex scaling track records presented, they will see the words “hindsight” or “simulation” written all over the track record as a disclaimer.
What does this mean?
Well – the track record is done in hindsight and simulated, knowing the closing prices!
How hard is that?
My eight year old daughter could do that and so could anyone who can read and write and you can to – these track records are totally meaningless and really not worth the paper their written on.
You can of course find a real-time track record but you will spend a long time in your search – I have spent 25 years trying, so if you find one let me know.
The fact is forex scalping for beginners takes advantage of naive and gullible investors who think winning is easy and they don’t stop to think about the reasons these systems cannot and never will work
If You Want to Win
You need to trade the odds and that means using time frames that allow you to get the odds in your favour and this means trading longer term.
If you are a beginner at forex trading and want to get a forex education that will help you win look at forex swing trading or long term trend following here you work with valid data and can get the odds on your side.
Avoid forex scalping and forex day trading and like I said earlier if you find a real time track record let me know.
Ill post a few free ebooks on forex in this post..
so that you can familiarise yourself with the world of Forex
Introduction To Forex
by 1st Forex Trading Academy. This trading course intends to provide to all of the students analytical tools on the trading system and methodologies. In this respect, the purpose of the course is to provide an overview of the many strategies that are being used in Forex market and to discuss the steps and tools that are needed in order to use these strategies successfully.
Another Good free EBOOK
THE SIX FORCES OF FOREX
by Scott Owens. A small e-book covering the basic and the main problems of Forex trading
Ill keep updating..
Pls check back for more updates
- FXTradeStream - Takes signals from emails and executes them in the MetaTrader platform.
- HyperOrder - Takes signals from TradeStation, MetaStock, ESignal or a custom application and sends them to a broker's API including FXCM, EFX Group, MetaTrader, Interactive Brokers and more.
- Neoticker - Create automated systems and execute them into MB Trading, EFX Group, Interactive Brokers or FXCM
- NinjaTrader - Sends signals from TradeStation, ESignal or a custom application into Interactive Brokers, MB Trading or Gain Capital
- SnapDragon - Sends signals from TradeStation to Oanda's API
- Thinking Stuff - Backtest and automate your trading system into Gain Capital and Oanda with the click of a mouse. No programming knowledge required.
- Trade Bolt - Takes signals from TradeStation, ESignal, MetaStock or WealthBuilder and sends them to Interactive Brokers
- TradeBullet - Sends orders from TradeStation, eSignal and custom applications into Interactive Brokers, EFX Group and MB Trading
- TradeCompanion - Automates your trading systems written in TradeStation, Excel, Visual Basic or any other proprietary platform and executes them into the BGCFX trading platform.
- TradeItself - Takes trading signals from emails a
Forex, or foreign exchange trading, is growing by leaps and bounds. It is becoming as popular (if not more) than the stock market, and Forex traders are discovering small fortunes every day! If you're new to Forex, you might find it to be confusing at first. Use the quick beginner's guide to Forex below to learn more about Forex and automated Forex.
What is Forex?
Forex is the act of trading various currencies from around the world. The Forex market started in the 1970s, but has in recent years caught on like wildfire in the stock market world. Forex trading systems record about USD $1.5 trillion in transactions every single day!
The goal in Forex trading is to make a profit when currency values increase or decrease within a currency pair. You will trade only when you expect the value of a currency to increase. In a currency pair, when the currency you bought increases, then you must sell the other currency to make a profit. An open trade, or open position, is a type of trade in which you have already purchased or sold a currency pair, but have not yet bought back an equivalent amount.
The five most significant currency pairs in Forex right now are USD/Yen, Euro/Yen, Pound/USD, Swiss franc/USD, and the Euro/USD.
To get started in Forex trading, you will create a Forex account through a Forex broker. Then, you will need to create a Forex trading strategy that works best for you. The strategy you choose should be tested using a practice account if possible before you start investing your real money. This will enable you to become familiar with Forex trading without risk.
Advantages and Disadvantages of Forex Trading
Forex trading offers a number of advantages. It offers more chances to make short-term profits than the stock market because money moves faster in Forex. The trading opens and closes within only a few seconds, so money can be made quickly. Also, Forex trading is easier to monitor than the stock market because you are only keeping up with currencies, not hundreds or thousands of companies.
There are a few disadvantages as well. Forex trading is risky as is the stock market. Because trading occurs so frequently, Forex trading requires constant monitoring throughout the day to enjoy maximum benefits. Those who don't have time to monitor their Forex trading might lose more than they gain.
With a new Forex trading system called automated Forex, you can enjoy the benefits of Forex without continual monitoring. Automated Forex is accomplished through trading software. The software monitors the Forex market for you by receiving Forex signals from trading systems and by using daily charts to analyze trends in Forex 24/7. The creation of automated Forex was based on a manual technique that has been used successfully by trading experts for years.
Automated Forex software is available from a number of companies online and offers you the advantage of around-the-clock trading. With these easy day trade signals, your automated Forex software will be able to trade for you while you're away and while you're sleeping. You never have to do the trading yourself, and you don't have to worry about it constantly when you're away. It's like having an expert advisor system in your own home or office PC.
Forex trading can be lucrative for you if you study the system and find a great strategy. Use online resources and helpful automated Forex tools to get started right away!
Bollinger Bands (BB) is among the most powerful economic indicators in the foreign exchange market. Invented by John Bollinger in 1980's; the bands are simply measuring the highness or the lowness of the current price of an equity or a currency pair relative to previous trades. Technically speaking, that is to measure the standard deviation from the moving average. In order to explore the premise behind the bands, let’s first see the band’s three main components.
1) A middle band represents a 20 period SMA
2) An upper band represents the 2nd standard deviation above the middle band
3) A lower band represents the 2nd standard deviation below the middle band
The rationality behind the Bollinger Bands is that the upper BB would act as a resistance level and the lower BB would act as a support level. When the price of a currency pair touches any of the two bands, it’s highly likely that the pair will retrace toward the moving average in the middle of the bands. This means that BB will perform only at a range bound market and not at a trending market.
1) Traders need to identify a range bound trading market (higher lows and lower highs)
2) When the price of a currency pair hits the upper BB, traders may place a short position after the formation of a bearish candlestick pastern
3) When the price of a currency pair hits the lower BB, traders may place a long position after the formation of a bullish candlestick pattern
4) In the two cases, traders may make their target at the middle BB band
5) Protective stops would be placed at a reasonable distance above the upper band (in the short trade), or below the lower band (in the long trade).
In this article I am going to give you plenty of advice in fact I am going to outline simple things that I changed in order to profit consistently from the Forex market, this small piece of information is worth more than you think.
Do you have a business plan for trading Forex? If not you should, plan where you are and exactly where you want to be in a year. Create a reachable goal and focus on achieving it. Leave all the get rich quick ideas at the door.
Do not system jump. There are literally thousands of good forex systems available yet people are not consistent in there approach in using them. They have a couple of losing trades and start looking for the next system. Do not fall into this horrible rut, I know many traders who have been stuck in this stage for years.
You may be surprised to know that professional traders are not particular about there systems, most of them are so simple you would think they are crazy. I know of a professional trader who uses one moving average and nothing else at all, yet he is very profitable.
Learn the power of compounding your money, small gains consistently in the Forex market equal huge gains over the year by compounding your winnings.
Last but not least, I am sure you are eager to start making money from the forex market if you are not already doing so. This leads many new traders into yet another rut, trading can become peoples lives. They live for trading and yet they are not profitable.
Remember to take time away from trading, do not keep you charts up all the time tempting you to make a trade. Make a time to trade and if you do not find any good trades then wait for the next session. Remember not having a position in the market is sometimes more profitable than having one.
I will start off with a nice intro, a one that will give insight to even a newbie on Forex trading
It would be in your best interest to acclimatize yourself to the basics of Forex Trading before taking the plunge as it possesses huge risks and opportunities as well. Its the largest and most liquid market of the world
A glossary is also provided at the bottom of this article for assistance to newbies
OverviewForeign exchange, forex or just FX are all terms used to describe the trading of the world's many currencies. The forex market is the largest market in the world, with trades amounting to more than USD 1.5 trillion every day. Most forex trading is speculative, with only a few percent of market activity representing governments' and companies' fundamental currency conversion needs.
Unlike trading on the stock market, the forex market is not conducted by a central exchange, but on the “interbank” market, which is thought of as an OTC (over the counter) market. Trading takes place directly between the two counterparts necessary to make a trade, whether over the telephone or on electronic networks all over the world. The main centres for trading are Sydney, Tokyo, London, Frankfurt and New York. This worldwide distribution of trading centres means that the forex market is a 24-hour market.
A currency trade is the simultaneous buying of one currency and selling of another one. The currency combination used in the trade is called a cross (for example, the Euro/US Dollar, or the GB Pound/Japanese Yen.). The most commonly traded currencies are the so-called “majors” – EURUSD , USDJPY , USDCHF and GBPUSD .
The most important forex market is the spot market as it has the largest volume. The market is called the spot market because trades are settled immediately, or “on the spot”. In practice this means two banking days.
Forward OutrightsFor forward outrights, settlement on the value date selected in the trade means that even though the trade itself is carried out immediately, there is a small interest rate calculation left. The interest rate differential doesn't usually affect trade considerations unless you plan on holding a position with a large differential for a long period of time. The interest rate differential varies according to the cross you are trading. On the USDCHF , for example, the interest rate differential is quite small, whereas the differential on NOKJPY is large. This is because if you trade e.g. NOKJPY, you get almost 7% (annual) interest in Norway and close to 0% in Japan. So, if you borrow money in Japan, to finance the trade and buying NOK, you have a positive interest rate differential. This differential has to be calculated and added to your account. You can have both a positive and a negative interest rate differential, so it may work for or against you when you make a trade.
Trading on MarginTrading on margin means that you can buy and sell assets that represent more value than the capital in your account. Forex trading is usually conducted with relatively small margin deposits. This is useful since it permits investors to exploit currency exchange rate fluctuations which tend to be very small. A margin of 1.0% means you can trade up to USD 1,000,000 even though you only have $10,000 in your account. A margin of 1% corresponds to a 100:1 leverage (or 'gearing'). (Because USD 10,000 is 1% of USD 1,000,000.) Using this much leverage enables you to make profits very quickly, but there is also a greater risk of incurring large losses and even being completely wiped out. Therefore, it is inadvisable to maximise your leveraging as the risks can be very high. For more information on the trading conditions of Saxo Bank, go to the Account Summary on your SaxoTrader and open the section entitled "Trading Conditions" found in the top right-hand corner of the Account Summary.
Why trade Forex?
24 hour tradingOne of the major advantages of trading forex is the opportunity to trade 24 hours a day from Sunday evening (20:00 GMT) to Friday evening (22:00 GMT). This gives you a unique opportunity to react instantly to breaking news that is affecting the markets.
Superior liquidityThe forex market is so liquid that there are always buyers and sellers to trade with. The liquidity of this market, especially that of the major currencies, helps ensure price stability and narrow spreads. The liquidity comes mainly from banks that provide liquidity to investors, companies, institutions and other currency market players.
No commissionsThe fact that forex is often traded without commissions makes it very attractive as an investment opportunity for investors who want to deal on a frequent basis.
Trading the “majors” is also cheaper than trading other cross because of the high level of liquidity. For more information on the trading conditions of Saxo Bank, go to the Account Summary on your SaxoTrader and open the section entitled "Trading Conditions" found in the top right-hand corner of the Account Summary.
100:1 LeverageLeverage (gearing) enables you to hold a position worth up to 100 times more than your margin deposit. For example, a USD 10,000 deposit can command positions of up to USD 1,000,000 through leverage. You can leverage the first USD 25,000 of your investment up to 100 times and additional collateral up to 50 times.
Profit potential in falling marketsSince the market is constantly moving, there are always trading opportunities, whether a currency is strengthening or weakening in relation to another currency. When you trade currencies, they literally work against each other. If the EURUSD declines, for example, it is because the U.S. dollar gets stronger against the Euro and vice versa. So, if you think the EURUSD will decline (that is, that the Euro will weaken versus the dollar), you would sell EUR now and then later you buy Euro back at a lower price and take your profits. The opposite trading scenario would occur if the EURUSD appreciates.
Important Forex Trading Terms
SpreadThe spread is the difference between the price that you can sell currency at ( Bid) and the price you can buy currency at (Ask). The spread on majors is usually 3 pips under normal market conditions. For more information on the trading conditions at Saxo Bank, go to the Account Summary on your Client Station and open the section entitled "Trading Conditions" found in the top right-hand corner of the Account Summary.
PipsA pip is the smallest unit by which a cross price quote changes. When trading forex you will often hear that there is a 3-pip spread when you trade the majors. This spread is revealed when you compare the bid and the ask price, for example EURUSD is quoted at a bid price of 0.9875 and an ask price of 0.9878. The difference is USD 0.0003, which is equal to 3 “pips”.
On a contract or position, the value of a pip can easily be calculated. You know that the EURUSD is quoted with four decimals, so all you have to do is cancel out the four zeros on the amount you trade and you will have the va value of one pip. Thus, on a EURUSD 100,000 contract, one pip is USD 10. On a USDJPY 100,000 contract, one pip is equal to 1000 yen, because USDJPY is quoted with only two decimals.
Trading Scenario – Trading Rising PricesIf you believe that the Euro will strengthen against the dollar you'll want to buy Euro now and sell it back later at a higher price.
|• You buy Euro|| We quote EURUSD at Bid 0.9875 and Ask 0.9878, which means that you can sell 1 Euro for 0.9875 USD or buy 1 Euro for 0.9878 USD . |
In this example you buy Euro 100,000, at the quote price of 0.9878 (ask price) per Euro.
|• The market moves in your favor||Later the market turns in favour of the Euro and the EURUSD is now quoted at Bid 0.9894 and Ask 0.9896.|
|• Now you sell your Euro and get the profit||You sell Euro at a Bid price of 0.9894.|
|• The profit is calculated as follows||Sell price-buy price x size of trade |
(0.9894 minus 0.9878) multiplied by 100.000 = USD 140 Profit
(Note that the profit or loss is always expressed in the secondary currency)
Trading Scenario – Trading Falling PricesIf, on the other hand, you believe that the Euro will weaken against the dollar, you'll want to sell EURUSD .
|• You sell Euro||We quote EURUSD at a Bid price of 0.9875 and Ask price of 0.9880 and you decide to sell Euro 100,000 at a Bid price of 0.9875.|
|• The market moves in your favour||The Euro weakens against the dollar and the EURUSD is now quoted at bid 0.9744 and ask 0.9749.|
|• Now you buy back your Euro||You buy EUR at an ask price of 0.9749.|
|• Your Profit/loss is then||Sell price-buy price x size of trade |
(0.9875 minus 0.9749) multiplied by 100.000 = USD 1260 Profit
I just bought a new bracelet. It cost RM890. Its made of Tungsten Carbide. Its big, heavy and all shiny. It is soo shiny, it looks like glass yet it is metal.
This picture is taken with my mobile phone as my digital camera is at my home in KL. It actually look much more impressive than what is in the picture. It is shiny, it is catching and bouncing light from all angle. I really like it when I walk out in public and people are starring at my bracelet. Its not gold, nor it silver but it is shinning a lot more than gold or silver.
Anyone of you would like to see more headover at this website. Maybe you will find a pattern that you like. :)