Tuesday, October 9, 2007
PIPS
The term used in the currency market to characterize the smallest incremental move an exchange rate can make. The value of a pip depends on the currency pair. One pip/basis point equals for instance 0.0001 for EUR/USD, GBP/USD and USD/CHF, and 0.01 for USD/JPY.
HEDGING
The practice of undertaking an investment activity in order to protect against loss in another. An example of this is selling short to nullify a previous purchase, or buying long to offset a previous short sale.
Multi Pair Chart
The multi pair chart indicator allows putting multiple currency pairs on a host currency chart and draw the difference between the these currencies (the added pairs and the host pair)
The multi pair chart is an indicator which represents more than one pair symbol, it creates further correlations between the pairs through hedging. It simulates the expected relations between more than one symbol to be more useful and to facilitate the trading process.
you can learn more on :http://forexgen.com/trading-tools/multi-pair-chart.html
The multi pair chart is an indicator which represents more than one pair symbol, it creates further correlations between the pairs through hedging. It simulates the expected relations between more than one symbol to be more useful and to facilitate the trading process.
you can learn more on :http://forexgen.com/trading-tools/multi-pair-chart.html
lot
The most common increment of currencies is the Pip. If the EUR/USD moves from 1.2250 to 1.2251, that is ONE PIP. A pip is the last decimal place of a quotation. The Pip is how you measure your profit or loss.
As each currency has its own value, it is necessary to calculate the value of a pip for that particular currency. In currencies where the US Dollar is quoted first, the calculation would be as follows.
Let’s take USD/JPY rate at 119.80 (notice this currency pair only goes to two decimal places, most of the other currencies have four decimal places)
In the case of USD/JPY, 1 pip would be .01
you can learn more about lots on : www.forexgen.com
As each currency has its own value, it is necessary to calculate the value of a pip for that particular currency. In currencies where the US Dollar is quoted first, the calculation would be as follows.
Let’s take USD/JPY rate at 119.80 (notice this currency pair only goes to two decimal places, most of the other currencies have four decimal places)
In the case of USD/JPY, 1 pip would be .01
you can learn more about lots on : www.forexgen.com
Order Types
There are some basic order types that all brokers provide and some others that sound weird. The basic ones are:
Market order:
A market order is an order to buy or sell at the current market price. For example, EUR/USD is currently trading at 1.2140. If you wanted to buy at this exact price, you would click buy and your trading platform would instantly execute a buy order at that exact price. If you ever shop on Amazon.com, it's (kinda) like using their 1-Click ordering. You like the current price, you click once and it's yours! The only difference is you are buying or selling one currency against another currency instead of buying Britney Spears CDs.
Limit order:
A limit order is an order placed to buy or sell at a certain price. The order essentially contains two variables, price and duration. For example, EUR/USD is currently trading at 1.2050. You want to go long if the price reaches 1.2070. You can either sit in front of your monitor and wait for it to hit 1.2070 (at which point you would click a buy market order), or you can set a buy limit order at 1.2070 (then you could walk away from your computer to attend your ballroom dancing class). If the price goes up to 1.2070, your trading platform will automatically execute a buy order at that exact price. You specify the price at which you wish to buy/sell a certain currency pair and also specify how long you want the order to remain active (GTC or GFD).
Stop-loss order:
A stop-loss order is a limit order linked to an open trade for the purpose of preventing additional losses if price goes against you. A stop-loss order remains in effect until the position is liquidated or you cancel the stop-loss order. For example, you went long (buy) EUR/USD at 1.2230. To limit your maximum loss, you set a stop-loss order at 1.2200. This means if you were dead wrong and EUR/USD drops to 1.2200 instead of moving up, your trading platform would automatically execute a sell order at 1.2200 and close out your position for a 30 pip loss (eww!). Stop-losses are extremely useful if you don't want to sit in front of your monitor all day worried that you will lose all your money. You can simply set a stop-loss order on any open positions so you won't miss your basket weaving class.
you can learn more about types of order on : http://forexgen.com/level-1-forex-intro./order-types.html
Market order:
A market order is an order to buy or sell at the current market price. For example, EUR/USD is currently trading at 1.2140. If you wanted to buy at this exact price, you would click buy and your trading platform would instantly execute a buy order at that exact price. If you ever shop on Amazon.com, it's (kinda) like using their 1-Click ordering. You like the current price, you click once and it's yours! The only difference is you are buying or selling one currency against another currency instead of buying Britney Spears CDs.
Limit order:
A limit order is an order placed to buy or sell at a certain price. The order essentially contains two variables, price and duration. For example, EUR/USD is currently trading at 1.2050. You want to go long if the price reaches 1.2070. You can either sit in front of your monitor and wait for it to hit 1.2070 (at which point you would click a buy market order), or you can set a buy limit order at 1.2070 (then you could walk away from your computer to attend your ballroom dancing class). If the price goes up to 1.2070, your trading platform will automatically execute a buy order at that exact price. You specify the price at which you wish to buy/sell a certain currency pair and also specify how long you want the order to remain active (GTC or GFD).
Stop-loss order:
A stop-loss order is a limit order linked to an open trade for the purpose of preventing additional losses if price goes against you. A stop-loss order remains in effect until the position is liquidated or you cancel the stop-loss order. For example, you went long (buy) EUR/USD at 1.2230. To limit your maximum loss, you set a stop-loss order at 1.2200. This means if you were dead wrong and EUR/USD drops to 1.2200 instead of moving up, your trading platform would automatically execute a sell order at 1.2200 and close out your position for a 30 pip loss (eww!). Stop-losses are extremely useful if you don't want to sit in front of your monitor all day worried that you will lose all your money. You can simply set a stop-loss order on any open positions so you won't miss your basket weaving class.
you can learn more about types of order on : http://forexgen.com/level-1-forex-intro./order-types.html
Wednesday, October 3, 2007
Trading
The Foreign Exchange currency market is known as FX. It is the simultaneous buying of one currency and selling another, currencies are traded and exchanged in pairs. Traders are all unified on one goal, making profit. Profits are produced when the prices move in the trader direction.
In the past, Forex markets were accessed only by larger financial institutes, investment banks, large multinational companies, global money managers, international currency dealers, and liquidity providers. Lately, online trading is offering trading platforms for each individual who wants to trade currencies in order to gain profit.
In the past, Forex markets were accessed only by larger financial institutes, investment banks, large multinational companies, global money managers, international currency dealers, and liquidity providers. Lately, online trading is offering trading platforms for each individual who wants to trade currencies in order to gain profit.
Divergence Trading
What if there was a low risk way to sell near the top or buy near the bottom of a trend?
What if you were already in a long position and you could know ahead of time the perfect place to exit instead of watching all your unrealized gains vanish before your eyes because your trade reverses direction?
What if you believe a currency pair will continue to fall but would like to go short at a better price or a less risky entry?
Well there is a way. It’s called divergence trading.
Divergence is basically price action measured in relationship to an oscillator indicator. It doesn't really matter what type of oscillator you use. You can use RSI, Stochastic, MACD, CCI, etc. etc. The great thing about divergences is that you can use them as a leading indicator and after some practice, it’s not too difficult to spot.
When traded properly, you can be consistently profitable with divergences. The best thing about divergences is that since you’re usually buying near the bottom or selling near the top, your risk on your trades are very small relative to your potential reward. Cha ching!
Higher Highs and Lower Lows
Just think “higher highs” and “lower lows”.
If price is making highs, the oscillator should also be making higher highs. If price is making lower lows, the oscillator should also be making lower lows.
If they are NOT, that means price and the oscillator are diverging from each other. Hence the term, divergence.
There are TWO types of divergence:
1-Regular .
2-Hidden .
you can learn more about the two types on :
http://forexgen.com/level-6-strategies/divergence-trading.html
What if you were already in a long position and you could know ahead of time the perfect place to exit instead of watching all your unrealized gains vanish before your eyes because your trade reverses direction?
What if you believe a currency pair will continue to fall but would like to go short at a better price or a less risky entry?
Well there is a way. It’s called divergence trading.
Divergence is basically price action measured in relationship to an oscillator indicator. It doesn't really matter what type of oscillator you use. You can use RSI, Stochastic, MACD, CCI, etc. etc. The great thing about divergences is that you can use them as a leading indicator and after some practice, it’s not too difficult to spot.
When traded properly, you can be consistently profitable with divergences. The best thing about divergences is that since you’re usually buying near the bottom or selling near the top, your risk on your trades are very small relative to your potential reward. Cha ching!
Higher Highs and Lower Lows
Just think “higher highs” and “lower lows”.
If price is making highs, the oscillator should also be making higher highs. If price is making lower lows, the oscillator should also be making lower lows.
If they are NOT, that means price and the oscillator are diverging from each other. Hence the term, divergence.
There are TWO types of divergence:
1-Regular .
2-Hidden .
you can learn more about the two types on :
http://forexgen.com/level-6-strategies/divergence-trading.html
How Leverage Affects Transaction Costs
Besides amplifying your losses, leverage also has another way of killing you. It’s a much slower kind of death, though, kinda like being constantly exposed to high levels of radiation. Most traders don’t see it coming and by the time they notice it, they’re dead.
This killer I’m talking about is the associated transaction cost of using high leverage.
Not only does leverage amplify your losses, it also amplifies your transaction costs as a percentage of your account.
Let’s say you open a mini account with $500. You buy five mini $10k lots of GBP/USD which has a 5 pip spread. Your true leverage is 100:1 ($50,000 total mini lots / $500 account). But check this….you paid $25 in transaction costs (($1/pip x 5 pip spread) x 2 lots)). That is 5% of your account! With one trade, and the market not even moving yet, you’re already down 5%! If your trades lose, your account balance shrinks. As your account balance shrinks, your leverage increases. As your leverage increases, the faster your transaction costs eats away at the little money you have left. This is the slow and silent killer I’m talking about.
The higher your leverage, the higher your transaction cost as a percentage of your trading capital.
If you have a mini account, and open a trade with a 5 pip spread, which equals $5 transaction cost, look at how the relative value of your transaction costs increases with more leverage.
you can learn more on :
http://forexgen.com/level-5-professional/how-leverage-affects-transaction-costs.html
This killer I’m talking about is the associated transaction cost of using high leverage.
Not only does leverage amplify your losses, it also amplifies your transaction costs as a percentage of your account.
Let’s say you open a mini account with $500. You buy five mini $10k lots of GBP/USD which has a 5 pip spread. Your true leverage is 100:1 ($50,000 total mini lots / $500 account). But check this….you paid $25 in transaction costs (($1/pip x 5 pip spread) x 2 lots)). That is 5% of your account! With one trade, and the market not even moving yet, you’re already down 5%! If your trades lose, your account balance shrinks. As your account balance shrinks, your leverage increases. As your leverage increases, the faster your transaction costs eats away at the little money you have left. This is the slow and silent killer I’m talking about.
The higher your leverage, the higher your transaction cost as a percentage of your trading capital.
If you have a mini account, and open a trade with a 5 pip spread, which equals $5 transaction cost, look at how the relative value of your transaction costs increases with more leverage.
you can learn more on :
http://forexgen.com/level-5-professional/how-leverage-affects-transaction-costs.html
Why Trade the News?
Trading news releases can be a significant tool in your trading arsenal. If you want, it can be your only weapon altogether. Economic news reports often spur strong short-term moves in the market, which are great trading opportunities for breakout traders. And with the forex being open 24 hours a day and a true worldwide market, there are plenty of opportunities almost every trading day to catch market volatility (aka a lot of pips!) kicked off by an economic news report.
you can gather more information on :
http://forexgen.com/level-5-professional/trading-the-news.html
you can gather more information on :
http://forexgen.com/level-5-professional/trading-the-news.html
Trading the News
Trading the news is becoming a popular technique to trade the forex markets … and why shouldn’t it be? Time and time again you see currency pairs move 50 to 100 pips within minutes or even seconds after a major news release. When you see that, I bet you’re thinking, “50 to 100 pips!? That’s easy money!” Maybe it is, and maybe it isn’t. It all depends on how prepared you are to trade a news release.
The goal of this lesson isn’t to give you a specific “Trading the News” strategy. The goal is to point you in the right direction and show some of the risks involved with trading these events, because here at BabyPips.com, we want to help you help yourself in developing your own methods that fit YOU best.
The goal of this lesson isn’t to give you a specific “Trading the News” strategy. The goal is to point you in the right direction and show some of the risks involved with trading these events, because here at BabyPips.com, we want to help you help yourself in developing your own methods that fit YOU best.
MACD
MACD is an acronym for Moving Average Convergence Divergence. This tool is used to identify moving averages that are indicating a new trend, whether it’s bullish or bearish. After all, our #1 priority in trading is being able to find a trend, because that is where the most money is made.
With an MACD chart, you will usually see three numbers that are used for its settings.
* The first is the number of periods that is used to calculate the faster moving average.
* The second is the number of periods that are used in the slower moving average.
* And the third is the number of bars that is used to calculate the moving average of the difference between the faster and slower moving averages.
you can learn more about MACD on : http://forexgen.com/level-2-forex-basics/macd.html
With an MACD chart, you will usually see three numbers that are used for its settings.
* The first is the number of periods that is used to calculate the faster moving average.
* The second is the number of periods that are used in the slower moving average.
* And the third is the number of bars that is used to calculate the moving average of the difference between the faster and slower moving averages.
you can learn more about MACD on : http://forexgen.com/level-2-forex-basics/macd.html
Stochastics
Stochastics are another indicator that helps us determine where a trend might be ending. By definition, a stochastic is an oscillator that measures overbought and oversold conditions in the market. The 2 lines are similar to the MACD lines in the sense that one line is faster than the other.
you can read more about stochastics on :
http://forexgen.com/level-2-forex-basics/stochastics.html
you can read more about stochastics on :
http://forexgen.com/level-2-forex-basics/stochastics.html
Demo Trading
You can open a demo account for free with ForexGen. This account has the full capabilities of a "real" account. Why is it free? It’s because the broker wants you to learn the ins and outs of their trading platform, and have a good time trading without risk, so you’ll fall in love with them and deposit real money. The demo account allows you to learn about the Forex markets and test your trading skills with ZERO risk.
YOU SHOULD DEMO TRADE FOR AT LEAST 2 MONTHS BEFORE YOU EVEN THINK ABOUT PUTTING REAL MONEY ON THE LINE.
I REPEAT - YOU SHOULD DEMO TRADE FOR AT LEAST 2 MONTHS BEFORE YOU EVEN THINK ABOUT PUTTING REAL MONEY ON THE LINE.
"Don't Lose Your Money" Declaration
Place your hand on your heart and say...
"I will demo trade for at least 2 months before I trade with real money."
Now touch your head with your index finger and say...
"I am a smart and patient Forex trader!"
you can gather more information on : www.forexgen.com
YOU SHOULD DEMO TRADE FOR AT LEAST 2 MONTHS BEFORE YOU EVEN THINK ABOUT PUTTING REAL MONEY ON THE LINE.
I REPEAT - YOU SHOULD DEMO TRADE FOR AT LEAST 2 MONTHS BEFORE YOU EVEN THINK ABOUT PUTTING REAL MONEY ON THE LINE.
"Don't Lose Your Money" Declaration
Place your hand on your heart and say...
"I will demo trade for at least 2 months before I trade with real money."
Now touch your head with your index finger and say...
"I am a smart and patient Forex trader!"
you can gather more information on : www.forexgen.com
How To Earn Money Trading Forex
In the FX market, you buy or sell currencies. Placing a trade in the foreign exchange market is simple: the mechanics of a trade are very similar to those found in other markets (like the stock market), so if you have any experience in trading, you should be able to pick it up pretty quickly.
The object of Forex trading is to exchange one currency for another in the expectation that the price will change, so that the currency you bought will increase in value compared to the one you sold.
Example of making money by buying Euros :
Trader's Action EUR USD
You purchase 10,000 euros at the EUR/USD exchange rate of 1.18 +10,000 -11,800*
Two weeks later, you exchange your 10,000 euros back into -10,000 +12,500*
US dollars at the exchange rate of 1.2500.
You earn a profit of $700. 0 +700
*EUR $10,000 x 1.18 = US $11,800
* EUR $10,000 x 1.25 = US $12,500
An exchange rate is simply the ratio of one currency valued against another currency. For example, the USD/CHF exchange rate indicates how many U.S. dollars can purchase one Swiss franc, or how many Swiss francs you need to buy one U.S. dollar.
The object of Forex trading is to exchange one currency for another in the expectation that the price will change, so that the currency you bought will increase in value compared to the one you sold.
Example of making money by buying Euros :
Trader's Action EUR USD
You purchase 10,000 euros at the EUR/USD exchange rate of 1.18 +10,000 -11,800*
Two weeks later, you exchange your 10,000 euros back into -10,000 +12,500*
US dollars at the exchange rate of 1.2500.
You earn a profit of $700. 0 +700
*EUR $10,000 x 1.18 = US $11,800
* EUR $10,000 x 1.25 = US $12,500
An exchange rate is simply the ratio of one currency valued against another currency. For example, the USD/CHF exchange rate indicates how many U.S. dollars can purchase one Swiss franc, or how many Swiss francs you need to buy one U.S. dollar.
New to Forex Markets
Forex is definitely one of the most exciting and profitable markets. If you want to join the elite and start investing you need to follow 5 very simple steps that will eventually lead you to success:
Self Study:
In order to start investing you need to study and observe the Forex market carefully so that you can make the right decisions when the time comes.You can study the fundamental analysis to monitor the political and economic news' effect on FX market. Also the study of technical analysis is useful as it predicts the price movement based on past experience.ForexGen offers a Training section developed specially for new traders. This section mainly contain comprehensive summarized documents teaching you how to deal with the Forex market and what procedures you need to follow in order to minimize the risk.
• Practice:
ForexGen's Demo account gives you the chance to practice your Forex trading skills with absolutely no obligation on your side. You will also be able to learn how to virtually place market orders and stop-loss orders without risking a penny.
• Investment Strategy:
After gaining enough knowledge about the Forex market, you are ready to start putting a strategy for your investment. First thing you should do is make sure not to let your emotions get in the way of your strategy as it’s a common mistake made by new traders.Secondly you need to make some decisions like how much you are willing to risk, if it's worth risking, if the market is suitable for that kind of investment and finally you always have to be aware of the amount of money you are risking and if you have enough funds to maintain your margin.
• Observation:
Once you have started your investment, you are now capable of being automatically connected 24/7 throughout ForexGen's new trailing stop software. Trailing stop allows you to control your balance 24 hours a day.
• Open your live account now:
Knowledge, practice, strategy and tools. You are definitely ready to start your investment by opening your first live account. Not like the demo account, you will now start committing real money. Just remember to stick to your strategy.
Self Study:
In order to start investing you need to study and observe the Forex market carefully so that you can make the right decisions when the time comes.You can study the fundamental analysis to monitor the political and economic news' effect on FX market. Also the study of technical analysis is useful as it predicts the price movement based on past experience.ForexGen offers a Training section developed specially for new traders. This section mainly contain comprehensive summarized documents teaching you how to deal with the Forex market and what procedures you need to follow in order to minimize the risk.
• Practice:
ForexGen's Demo account gives you the chance to practice your Forex trading skills with absolutely no obligation on your side. You will also be able to learn how to virtually place market orders and stop-loss orders without risking a penny.
• Investment Strategy:
After gaining enough knowledge about the Forex market, you are ready to start putting a strategy for your investment. First thing you should do is make sure not to let your emotions get in the way of your strategy as it’s a common mistake made by new traders.Secondly you need to make some decisions like how much you are willing to risk, if it's worth risking, if the market is suitable for that kind of investment and finally you always have to be aware of the amount of money you are risking and if you have enough funds to maintain your margin.
• Observation:
Once you have started your investment, you are now capable of being automatically connected 24/7 throughout ForexGen's new trailing stop software. Trailing stop allows you to control your balance 24 hours a day.
• Open your live account now:
Knowledge, practice, strategy and tools. You are definitely ready to start your investment by opening your first live account. Not like the demo account, you will now start committing real money. Just remember to stick to your strategy.
ForexGen Academy
ForexGen Academy was created to introduce novice or beginner traders to all the essential aspects of foreign exchange, in a fun and easy-to-understand manner.
No hard expressions, no buzz words, and no rocket science language is used throughout
these lessons.
Here is all what is needed to
create the ultimate business:
* Yourself
* Your computer
* Internet connection
That’s it! No employees. No advertising. No cold calling. No inventory.
Imagine a business with just you, your computer, and a high-speed Internet connection?!
That’s all you need trade in the foreign exchange market!!
A properly trained Forex trader can potentially earn BIG PROFITS in every single month,
week, or day!
(Of course a poorly trained Forex trader can suffer BIG LOSSES as well.)
you can learn more on :http://forexgen.com/forexgen-academy-18.html
No hard expressions, no buzz words, and no rocket science language is used throughout
these lessons.
Here is all what is needed to
create the ultimate business:
* Yourself
* Your computer
* Internet connection
That’s it! No employees. No advertising. No cold calling. No inventory.
Imagine a business with just you, your computer, and a high-speed Internet connection?!
That’s all you need trade in the foreign exchange market!!
A properly trained Forex trader can potentially earn BIG PROFITS in every single month,
week, or day!
(Of course a poorly trained Forex trader can suffer BIG LOSSES as well.)
you can learn more on :http://forexgen.com/forexgen-academy-18.html
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