When people buy foreign currency and from where? There are several reasons when people need to buy foreign currency for example they may visiting offshore country for fun or commercial purpose, want to send money abroad to a friend, relative or family, you have purchased asset or any service from overseas country and want to pay for it and most obvious if you are a trade and you make income from currency trading. In whatsoever reason, exchange rate is the key factor in your transaction and market which provide platform for this international finance transaction is known as forex or fx (foreign exchange market). It is a market where travelers and traders both can buy currency on line at the best exchange rate.
Many reputed foreign exchange services around the world that provide online forex trading platform for retail investors. These firms also advise travelers to buy currency online when the rate is good. From last couple of years, economical condition of US and UK is facing nervous points. There are not enough jobs in the market and government policies are changed and become a bit unfavorable. In such financial crisis, it is most important to invest in safe market and earn maximum as you can. For travelers, airport kiosks and banks charge large overheads and ruin your pockets. It is wise to buy currency online from the foreign
exchange firms.
These firms not only offer most competitive exchange rates but also they charge 0% overheads. Today, millions of people including large banks, financial organizations and retailers trade in forex to make money.Online forex trading is beneficial for those who is looking for online business from home, businesses who want to make profits and expand their business globally, government controls the market when inflation rate goes very high, regular traders who has made forex trading as their profession and for those who want to buy foreign goods, services or properties.
Forex ,before few years, was not available for retail traders. Before a decade, market started allowing retailers and since then it is growing exponentially. The best part of market is it is not dominated by any single entity. There are thousands of companies, millions of people, commercial banks, central banks around the world are trading forex to make money out of it. There are many online trading firms in US, UK and other parts of world which allow retail traders to register online and coach them to learn forex trading and make profits.Success in online forex trading depends on the position of traders and market condition. Forex specialist can help novice traders to understand market condition and take accurate decision of
entering and existing from trade.
Forex is the only one of its kind market which is traded for 24hrs in all 5 business working days. Thus, those who want to start earning online can set their trading time on their convenience. Unlike stock market, traders need not to pay any kind of registration fees to start trading. The trading firms allow you to sell or buy currency online and do not charge commission. In forex, traders can make gains from both upward and downward condition of the market. Forex is the most liquid market on earth. Per day trading volume in forex is around $19 trillions which is more than the total equity market of US. Forex learning material and trading tool both are offered free thus any average person with computer basics can initiate trading in forex and make money. Volatility of forex ensure profit making opportunities for traders.
Showing posts with label Forex trading. Show all posts
Showing posts with label Forex trading. Show all posts
Thursday, December 1, 2011
Friday, July 8, 2011
Advantages of Forex Trading Compared to Other Investment Programs
There are many investment options that you can do. each program has advantages and disadvantages of each. But as the saying goes, don't put your eggs in one basket, you also need to invest your money in several investment programs, with the percentage that suits your strategy of course.
Here are some of the advantages offered by the forex trading which can not be offered any other investment:
1. Start-Up/Capital required is relatively small.
Indeed, once the required capital can be quite large (up to 10,000). But now capital needed only $ 5000. Compare with other investments such as stocks that require at least $ 20000 of capital or investment real sector which is usually more than USD 50000.
2. Anywhere, anytime and anyone can join.
Yes, investments do not recognize castes. Likewise with forex trading. Whoever you are, merchants, employees, a housewife or even once a farmer can join. And more great again with the advancement of the internet, you can trade anywhere without having to go to the relevant stock exchange or call your dealer directly. It definitely saves your time and cost!
3. Return on Investment is highest than other investments.
Are there investments that can offer a return to infinity? Forex can do it!
4. Real time prices that you can access at any time free of charge.
5. High liquidity.
This means you can always buy or sell currency that you want traded and there is no term fail to deliver here. When you take action to buy, there are always others who will sell it to you and conversely. This occurs because the scope is the world stock forex investment that are connected to each other. Unlike the local stock exchange where the transaction takes place only on the stock, so it can happen fail to deliver events.
6. There is a demo account that you can have for free without paying a dime! If you are new to forex, it will really help you because the price listed on the demo account is the same as the price actually occurred in the market.
7. 24 hours a day and 5 days a week hours trading.
There is no night or day in the world of forex trading. The market lasts for 24 hours a day starting from the Asia to European and American markets. Compare with shares that are only open in office hours or commodity market which is only open in the morning until noon. If you are an office worker, you can trade forex trading at night and does not interfere with your working hours.
8. Investors act actively in the investment.
Unlike other investments where investors can only entrust a third party managed funds (mutual funds, insurance, deposits, etc.), the forex trading is you who decide when and how much you are going to invest, to take action to buy or sell. Now your investment depends on yourself and not to others.
9. Security and confidentiality is assured.
Although transactions conducted via the Internet does not mean security and confidentiality of information and funds are not guaranteed. Broker forex trading provides data encryption in the transaction and your funds is stored safely in segregated accounts at the forex broker if you do it legally.
10. Online reporting and transaction.
It first forex trading is done through telephone and written report of your transactions will be sent via email or even post every month. But now with internet access, can you access report of any transactions you done whenever you want without having to wait for the part of the report to your broker.
11. Leverage offered by 1:100
This means with one part that you remove, you can buy or sell as many as 100 parts. This is the excess of the margin trading where it takes is only guaranteed to buy or sell the required items. In forex trading is implemented with a capital of $ 100 then you can buy the dollar as much as $ 10,000 and also conversely to the selling action. High leverage and low margin can basically increase the benefits or conversely loss of you. Thus you should consider the investment risk and your investment plan.
Here are some of the advantages offered by the forex trading which can not be offered any other investment:
1. Start-Up/Capital required is relatively small.
Indeed, once the required capital can be quite large (up to 10,000). But now capital needed only $ 5000. Compare with other investments such as stocks that require at least $ 20000 of capital or investment real sector which is usually more than USD 50000.
2. Anywhere, anytime and anyone can join.
Yes, investments do not recognize castes. Likewise with forex trading. Whoever you are, merchants, employees, a housewife or even once a farmer can join. And more great again with the advancement of the internet, you can trade anywhere without having to go to the relevant stock exchange or call your dealer directly. It definitely saves your time and cost!
3. Return on Investment is highest than other investments.
Are there investments that can offer a return to infinity? Forex can do it!
4. Real time prices that you can access at any time free of charge.
5. High liquidity.
This means you can always buy or sell currency that you want traded and there is no term fail to deliver here. When you take action to buy, there are always others who will sell it to you and conversely. This occurs because the scope is the world stock forex investment that are connected to each other. Unlike the local stock exchange where the transaction takes place only on the stock, so it can happen fail to deliver events.
6. There is a demo account that you can have for free without paying a dime! If you are new to forex, it will really help you because the price listed on the demo account is the same as the price actually occurred in the market.
7. 24 hours a day and 5 days a week hours trading.
There is no night or day in the world of forex trading. The market lasts for 24 hours a day starting from the Asia to European and American markets. Compare with shares that are only open in office hours or commodity market which is only open in the morning until noon. If you are an office worker, you can trade forex trading at night and does not interfere with your working hours.
8. Investors act actively in the investment.
Unlike other investments where investors can only entrust a third party managed funds (mutual funds, insurance, deposits, etc.), the forex trading is you who decide when and how much you are going to invest, to take action to buy or sell. Now your investment depends on yourself and not to others.
9. Security and confidentiality is assured.
Although transactions conducted via the Internet does not mean security and confidentiality of information and funds are not guaranteed. Broker forex trading provides data encryption in the transaction and your funds is stored safely in segregated accounts at the forex broker if you do it legally.
10. Online reporting and transaction.
It first forex trading is done through telephone and written report of your transactions will be sent via email or even post every month. But now with internet access, can you access report of any transactions you done whenever you want without having to wait for the part of the report to your broker.
11. Leverage offered by 1:100
This means with one part that you remove, you can buy or sell as many as 100 parts. This is the excess of the margin trading where it takes is only guaranteed to buy or sell the required items. In forex trading is implemented with a capital of $ 100 then you can buy the dollar as much as $ 10,000 and also conversely to the selling action. High leverage and low margin can basically increase the benefits or conversely loss of you. Thus you should consider the investment risk and your investment plan.
Tuesday, July 5, 2011
Two Ways Opportunity in Forex Trading
In the world of forex trading is known the term Two Ways Opportunity. What is Two Ways Opportunity?
Investors have the opportunity to gain profit, both when prices rise or when prices fall. For the concept of profit if the price rises may not need to explain because it is a reasonable concept, we buy something when it's cheap (Open Buy) and hope the price goes up then sell it (Sell Liquid), profit obtained from the difference between the selling price with the purchase price.
Well what if prices go down? How to get profits?
Forex Market is very large market, namely the international market worldwide, and transactions happen quickly.
Concept to profit when the price comes down is:
Sell when the price is expensive
Then
buy back when prices fall
How can I sell if I have not bought?
It could, because anyone would to lend to you!
A simple example is Consignment in the world trade system, which we loaned goods by the Supplier for sold and we do not directly pay when we receive the goods. After the goods are sold to our customers (of course more expensive than the purchase price to the supplier), then we pay back to our supplier with a cheaper price than the selling price to our customers.
Well in Forex Trading as well, when you open a Sell Position, then you borrow another person position to be sold and you must return it again with purchase from the market, certainly we hope when buy in repayment, the price is cheaper (down) than when we sell / borrow.
This process is carried out by the system through the stock, so we do not know from whom we borrow / open sell position and from whom we purchase / closing sell positions plus with a global Forex Market then there's always those who sell or buy on time.
Well this is the concept of Open Sell, open Sell Position (sell) and expect the price down so that we can cover (Buy Liquid) with a lower price. Profit gained from the difference between the selling price with the purchase price. But if until prices rise above the purchase price (Open Buy), then you lose. So keep be careful!
Investors have the opportunity to gain profit, both when prices rise or when prices fall. For the concept of profit if the price rises may not need to explain because it is a reasonable concept, we buy something when it's cheap (Open Buy) and hope the price goes up then sell it (Sell Liquid), profit obtained from the difference between the selling price with the purchase price.
Well what if prices go down? How to get profits?
Forex Market is very large market, namely the international market worldwide, and transactions happen quickly.
Concept to profit when the price comes down is:
Sell when the price is expensive
Then
buy back when prices fall
How can I sell if I have not bought?
It could, because anyone would to lend to you!
A simple example is Consignment in the world trade system, which we loaned goods by the Supplier for sold and we do not directly pay when we receive the goods. After the goods are sold to our customers (of course more expensive than the purchase price to the supplier), then we pay back to our supplier with a cheaper price than the selling price to our customers.
Well in Forex Trading as well, when you open a Sell Position, then you borrow another person position to be sold and you must return it again with purchase from the market, certainly we hope when buy in repayment, the price is cheaper (down) than when we sell / borrow.
This process is carried out by the system through the stock, so we do not know from whom we borrow / open sell position and from whom we purchase / closing sell positions plus with a global Forex Market then there's always those who sell or buy on time.
Well this is the concept of Open Sell, open Sell Position (sell) and expect the price down so that we can cover (Buy Liquid) with a lower price. Profit gained from the difference between the selling price with the purchase price. But if until prices rise above the purchase price (Open Buy), then you lose. So keep be careful!
Bid, Offer, Spreads and How to Read Forex Quotes
After learning how to deal in forex trading, it now needs to know its main activity, buying and selling. Forex trading activity is not separated from the 'Buy' and 'Sell'. Every trader has the freedom to perform one action on which he was to gain profit. Buy can also matched with a 'Bid' or 'Long'. And 'sell' paired with the 'Offer' or 'Short'. So if you read an article about forex and there is mentioned a term 'Bid' or 'Long', need not be confused because the two terms are synonymous with Buy.
Reading the quotes is easy. But if we do not understand can be confusing. Quotes on forex transactions is usually written in conjunction with its pairs and always follow the market changes from time to time (running / real time).
If you are a newbie in the market, then you will see many foreign terms that sounded weird. To that end, my-trade.blogspot.com has posted about forex trading terms that you can access through this blog.
How to read quotes quite simple if we remember two things:
1. The first currency mentioned is the base currency
2. Base currency value is always 1.
For example: USD / CHF 1.4623 means 1 U.S. dollar is worth 1.4623 Swiss Francs. If on the next time a value of USD / CHF 1.4630 means the U.S. dollar rose 7 points because they can buy more Swiss Franc. There are terms in the forex called Bullish and Bearish. Bullish means a currency trend which is being strengthened against other currencies. Bearish is a trend of weakening a currency exchange rate compared to other
Each pairs have two price displayed: the purchase price (bid) and selling price (offer). The difference between them is called 'spread'. So, if we use the example above, USD / CHF 1.4623/28 means the selling price of U.S. Dollar is 1.4623 Swiss Franc and the purchase price is 1.4628. Here the Spread value is 5 (.. 28 -.. 25 = 5).
Spread is determined by the brokers and its value varies between one broker with another. The less spread is better for investors. There are forex trading brokers with a competitive spreads, such as MB Trading (spread according to market) and Capital Gain (fixed spread).
Reading the quotes is easy. But if we do not understand can be confusing. Quotes on forex transactions is usually written in conjunction with its pairs and always follow the market changes from time to time (running / real time).
If you are a newbie in the market, then you will see many foreign terms that sounded weird. To that end, my-trade.blogspot.com has posted about forex trading terms that you can access through this blog.
How to read quotes quite simple if we remember two things:
1. The first currency mentioned is the base currency
2. Base currency value is always 1.
For example: USD / CHF 1.4623 means 1 U.S. dollar is worth 1.4623 Swiss Francs. If on the next time a value of USD / CHF 1.4630 means the U.S. dollar rose 7 points because they can buy more Swiss Franc. There are terms in the forex called Bullish and Bearish. Bullish means a currency trend which is being strengthened against other currencies. Bearish is a trend of weakening a currency exchange rate compared to other
Each pairs have two price displayed: the purchase price (bid) and selling price (offer). The difference between them is called 'spread'. So, if we use the example above, USD / CHF 1.4623/28 means the selling price of U.S. Dollar is 1.4623 Swiss Franc and the purchase price is 1.4628. Here the Spread value is 5 (.. 28 -.. 25 = 5).
Spread is determined by the brokers and its value varies between one broker with another. The less spread is better for investors. There are forex trading brokers with a competitive spreads, such as MB Trading (spread according to market) and Capital Gain (fixed spread).
Monday, July 4, 2011
How to Trade in Forex Trading
Broadly speaking, the way to transact in forex trading is divided into two, with a telephone which is called by dealing quotes (DQ) and the newest way is to use the internet so-called Online Forex Trading.
1. Dealing Quotes (DQ): Ordinary people often see it on television. Someone was on the phone with a busy and asking price. Within seconds the transaction is completed and the transaction data has been stored by the dealer (the forex trading dealer is someone who is placed by the forex trading broker with the task of channeling the mandate of Investors to transact). Dealers tell us the price prevailing at that time. In the event of a match the price then the transaction occurs. Evidence of the transaction is a sound recording telephone conversations and quotes (record) all of which are stored by dealers.
It looks simple and easy, pick up the phone, talk and then finished. But if we look further, this method has many disadvantages. The first weakness is the lack of evidence of transactions that are only held by the dealer. Investors are quite dependent on the evidence in the form of quotes and transaction records which are also held by the dealer.
And investors must recognize that the evidence of legitimate transactions is recognized only two things (because it is tied to the Client Agreement). Whereas if the investor had evidence of transactions recorded on his own initiative, the evidence is not recognized legally by the dealer and applicable law. In this case the investor's position became weaker. What if the proff of transaction is lost or damaged while the transaction is already underway and investors should make a profit?
Another disadvantage, because the transaction brokered by the dealers who also is a human then the human error factor is always there. Although dealers usually are trained people, it still has a factor of inaccuracy, negligent or even emotional factors that can reduce professional work.
2. Online Forex Trading
Along with the rapid advancement of the internet, now the transactions can be done via the internet. The price displayed is the price of the official and recognized by the international community. And that is precisely on the computer screen of investors! In this way, investors can transact the money as they wish. No longer require dealers. Because the transactions are made by investors own the possible losses arising from dealers factors to zero. Reporting is made online and in real time. Easier, no pricing games (by the illegal dealers / forex trading brokers), and control completely in the hands of investors. In addition there are many facilities owned by the online transaction is not shared by conventional means. Investors do not need to go to the stock exchange or any call, simply by internet line, everything has been fulfilled.
If you are interested in getting money from forex trading, and you've mastered the forex trading systems, then I highly recommend if you want to invest in forex trading, look for brokers who provide online forex trading platform for the convenience and security of your funds.
1. Dealing Quotes (DQ): Ordinary people often see it on television. Someone was on the phone with a busy and asking price. Within seconds the transaction is completed and the transaction data has been stored by the dealer (the forex trading dealer is someone who is placed by the forex trading broker with the task of channeling the mandate of Investors to transact). Dealers tell us the price prevailing at that time. In the event of a match the price then the transaction occurs. Evidence of the transaction is a sound recording telephone conversations and quotes (record) all of which are stored by dealers.
It looks simple and easy, pick up the phone, talk and then finished. But if we look further, this method has many disadvantages. The first weakness is the lack of evidence of transactions that are only held by the dealer. Investors are quite dependent on the evidence in the form of quotes and transaction records which are also held by the dealer.
And investors must recognize that the evidence of legitimate transactions is recognized only two things (because it is tied to the Client Agreement). Whereas if the investor had evidence of transactions recorded on his own initiative, the evidence is not recognized legally by the dealer and applicable law. In this case the investor's position became weaker. What if the proff of transaction is lost or damaged while the transaction is already underway and investors should make a profit?
Another disadvantage, because the transaction brokered by the dealers who also is a human then the human error factor is always there. Although dealers usually are trained people, it still has a factor of inaccuracy, negligent or even emotional factors that can reduce professional work.
2. Online Forex Trading
Along with the rapid advancement of the internet, now the transactions can be done via the internet. The price displayed is the price of the official and recognized by the international community. And that is precisely on the computer screen of investors! In this way, investors can transact the money as they wish. No longer require dealers. Because the transactions are made by investors own the possible losses arising from dealers factors to zero. Reporting is made online and in real time. Easier, no pricing games (by the illegal dealers / forex trading brokers), and control completely in the hands of investors. In addition there are many facilities owned by the online transaction is not shared by conventional means. Investors do not need to go to the stock exchange or any call, simply by internet line, everything has been fulfilled.
If you are interested in getting money from forex trading, and you've mastered the forex trading systems, then I highly recommend if you want to invest in forex trading, look for brokers who provide online forex trading platform for the convenience and security of your funds.
Friday, July 1, 2011
Forex Trading Education: Basic Guide(2)
Benefits of Forex Trading if done properly will be great. Its main benefit is obviously the extra income. Your life becomes better for it. Another benefit is having the ability as a forex trader you will know in advance the most recent economic events. Good or bad you are so more could be leading to circumvent or take advantage. To get the benefits that you must want to learn the fundamentals of forex trading properly. Learning can be done by reading forex trading tutorials, open a blog page about forex trading, and looking for a forex trading guide from a trusted source. Understand the basic terms of forex trading will be very beneficial for you. The following are some terms you should know.
What is a Lot?
Lot is another name for Volume. Standard unit size of the forex trading transaction. Typically, one standard lot is equal to 100,000 units of base currency, while 10,000 units is the mini account, then 1,000 units are micro account.
What is Take Profit in trading?
Take Profit is setting stop trading after we get the profit. Example: Buy EUR / USD at 1.4300 and the position moves the price reaches 1.4350 and if we set a take profit at 1.4350, then you've got a profit 50 pips.
What is Stop Loss?
Setting stop trading if you have a loss. Example: Buy EUR / USD at 1.4300 and price position moves down to 1.4280 and if the Stop Loss is set at 1.4280, then you lose 20 pips.
What is Balance?
The total of all your money deposited in your trading account.
What is Margin?
The money that you used to open or maintain a position. The amount of margin required depends on how much you use a lot for trading.
Margin calculations: LOT * CONTRACT SIZE * CURRENT MARKET PRICE / LEVERAGE
Margin Calculation Example:
GBP / USD: 1.5020 (current market prices)
Lot: 1.0
Contract size: 100.000
Leverage: 1:2000
So 1.0 (lot) * 100,000 (contract size) * 1.5020 (current market price) / 200 (leverage)
- 1.0 * 100.000 = 100.000 * 1.5020 = 150.200 / 200 = $ 751 (this is an unused margin)
What is Free Margin?
The definition of Free Margin is in which to trading or to maintain your open position.
What is Margin Level?
Level Margin calculated on a percentage of the level of free margin.
What is Equity?
Equity is the Balance-Floating.
What is a Buy Stop?
Buy Stop is orders delay that you can place and put your order above current market price. Example: Current Market Place EUR / USD is 1.3530, you can place a Buy Stop above the current market as 1.3550. When the market price rose to 1.3550, it will automatically open your Buy Stop position to the position of Purchase (Buy Position).
What is a Sell Stop?
Sell Stop is order delay that you can place and put your order below current market price. Example: Current Market Place EUR / USD is 1.3530, you can position the Sell Stop below the current market as 1.3520. When the market price falls to 1.3520, it will automatically open a your Sell Stop position into a Sell Position.
What is a Buy Limit?
Buy Limit is order delay that you can place and put your order below current market price. Example: Current Market Place EUR / USD is 1.3525, you can place a Buy Limit below the current market as 1.3520. When the market price falls to 1.3520, it will automatically open your buy limit position to the position of Purchase (Buy Limit).
What is a Sell Limit?
Sell Limit is order delay that you can place and put your order above current market price. Example: Current Market Place EUR / USD is 1.3525, you could put a sell limit position above the current market as 1.3530. When the market price rose to 1.3530, it will automatically open your sell limit position into a position of Sell (Sell Limit).
Margin Call
Margin Call is a request from a broker forex trading or dealer for additional funds or other collateral to guarantee performance on a position that has moved away from your position.
Step Out
Step Out is your position will be automatically closed when your margins are not sufficient to cover your losses if the market moves away from your position.
What is the Gap?
Refers to two kinds of situations: A bid from the current quotation which is higher than the previous quotation Ask, and an the current quotation Ask which is lower than the bid of the previous quotation. It sometimes happens on Monday when the market opens.
What is Spike?
Spike is a Error Quote from Broker forex trading server. Spike is the error quote with the following characteristics:
a. Significant price gap;
b. In a short period of time the price rebounds with a price gap;
c. before the appearance there is no rapid price movements;
d. before the appearance there is no important macroeconomic indicators and / or corporate reports.
Usually the broker got a quote from the system error information. Quote error occurs mainly due to two reasons:
Technical failures (technical failure)
Deal separate, often mismanaged, because of the information system.
What is Slippage?
Slippage is the difference between order price and the executed price, calculated in pips. Slippage often occurs at a very fast market movements, or when the execution is done manually.
What is the Maximum Deviation?
Maximum Deviation is setting in order to be allowed enter into the market with different price set for buying or selling when the market moves too fast.
What is Swap?
Swap is an exchange flow of payments over time according to specific requirements. Type most commonly used is interest rate swap, in which one party agrees to pay a fixed interest rate in return receive an adjustable rate from another party.
What is a Lot?
Lot is another name for Volume. Standard unit size of the forex trading transaction. Typically, one standard lot is equal to 100,000 units of base currency, while 10,000 units is the mini account, then 1,000 units are micro account.
What is Take Profit in trading?
Take Profit is setting stop trading after we get the profit. Example: Buy EUR / USD at 1.4300 and the position moves the price reaches 1.4350 and if we set a take profit at 1.4350, then you've got a profit 50 pips.
What is Stop Loss?
Setting stop trading if you have a loss. Example: Buy EUR / USD at 1.4300 and price position moves down to 1.4280 and if the Stop Loss is set at 1.4280, then you lose 20 pips.
What is Balance?
The total of all your money deposited in your trading account.
What is Margin?
The money that you used to open or maintain a position. The amount of margin required depends on how much you use a lot for trading.
Margin calculations: LOT * CONTRACT SIZE * CURRENT MARKET PRICE / LEVERAGE
Margin Calculation Example:
GBP / USD: 1.5020 (current market prices)
Lot: 1.0
Contract size: 100.000
Leverage: 1:2000
So 1.0 (lot) * 100,000 (contract size) * 1.5020 (current market price) / 200 (leverage)
- 1.0 * 100.000 = 100.000 * 1.5020 = 150.200 / 200 = $ 751 (this is an unused margin)
What is Free Margin?
The definition of Free Margin is in which to trading or to maintain your open position.
What is Margin Level?
Level Margin calculated on a percentage of the level of free margin.
What is Equity?
Equity is the Balance-Floating.
What is a Buy Stop?
Buy Stop is orders delay that you can place and put your order above current market price. Example: Current Market Place EUR / USD is 1.3530, you can place a Buy Stop above the current market as 1.3550. When the market price rose to 1.3550, it will automatically open your Buy Stop position to the position of Purchase (Buy Position).
What is a Sell Stop?
Sell Stop is order delay that you can place and put your order below current market price. Example: Current Market Place EUR / USD is 1.3530, you can position the Sell Stop below the current market as 1.3520. When the market price falls to 1.3520, it will automatically open a your Sell Stop position into a Sell Position.
What is a Buy Limit?
Buy Limit is order delay that you can place and put your order below current market price. Example: Current Market Place EUR / USD is 1.3525, you can place a Buy Limit below the current market as 1.3520. When the market price falls to 1.3520, it will automatically open your buy limit position to the position of Purchase (Buy Limit).
What is a Sell Limit?
Sell Limit is order delay that you can place and put your order above current market price. Example: Current Market Place EUR / USD is 1.3525, you could put a sell limit position above the current market as 1.3530. When the market price rose to 1.3530, it will automatically open your sell limit position into a position of Sell (Sell Limit).
Margin Call
Margin Call is a request from a broker forex trading or dealer for additional funds or other collateral to guarantee performance on a position that has moved away from your position.
Step Out
Step Out is your position will be automatically closed when your margins are not sufficient to cover your losses if the market moves away from your position.
What is the Gap?
Refers to two kinds of situations: A bid from the current quotation which is higher than the previous quotation Ask, and an the current quotation Ask which is lower than the bid of the previous quotation. It sometimes happens on Monday when the market opens.
What is Spike?
Spike is a Error Quote from Broker forex trading server. Spike is the error quote with the following characteristics:
a. Significant price gap;
b. In a short period of time the price rebounds with a price gap;
c. before the appearance there is no rapid price movements;
d. before the appearance there is no important macroeconomic indicators and / or corporate reports.
Usually the broker got a quote from the system error information. Quote error occurs mainly due to two reasons:
Technical failures (technical failure)
Deal separate, often mismanaged, because of the information system.
What is Slippage?
Slippage is the difference between order price and the executed price, calculated in pips. Slippage often occurs at a very fast market movements, or when the execution is done manually.
What is the Maximum Deviation?
Maximum Deviation is setting in order to be allowed enter into the market with different price set for buying or selling when the market moves too fast.
What is Swap?
Swap is an exchange flow of payments over time according to specific requirements. Type most commonly used is interest rate swap, in which one party agrees to pay a fixed interest rate in return receive an adjustable rate from another party.
Forex Trading Education: Basic Guide
What is Forex trading ?
Simple Definition of Forex trading (Foreign Exchange, Forex currency exchange) is the buying and selling currencies simultaneously or exchange one country to another country's currency. Forex market is non-stop cash market where currencies are traded from various countries, especially via brokers. Forex currency trading is constantly and simultaneously bought and sold through local and global markets and trader's investment increase or decrease based the value depending on currency movements. Forex market trading conditions can change at any time in response to real events.
Like in general markets, there is also is a bid / offer spread (differences between purchase price and sale price). From the difference between the major currencies, the difference between the price which the determinant of the market (market-maker) will sell ("ask" or "offer") to wholesale customers and the price at which the same market-maker will buy ("bid" ) from the same wholesale customer is minimal, usually only 3 pips. In EUR / USD price of 1.3022 a pip would be a '2 'at the end. So the bid / ask quote of EUR / USD likely to be 1.3022/1.3025.
Attractiveness of Forex trading for private investors are:
a. 24-hour trading, 5 days a week with nonstop access to the Forex dealers.
b. A large liquid market making it easy to trade major currencies.
c. A lively market offers opportunities to gain profit.
d. Standard instruments for controlling risk exposure.
e. The ability to achieve a profit when the market rose or fell.
f. Trade that were leveraged with low margin requirements.
g. Many options for trading with zero commission.
What is Leverage?
Leverage is the ability to help your account to position which is bigger than the total margin accounts. For example, if a trader has a margin of $ 1,000 in his account and he opened the $ 100,000 position, he leveraged 100 times or 100:1. When he opened the $ 500,000 position with $ 1,000 of margin in his account, his leverage is 500 times or 500:1. Increasing your leverage mean magnifies both profit or loss.
What is it Spread?
Spread is the difference between Bid and Ask prices. The difference between the sell quote and the buy quote or the bid and offer prices. For example, if EUR / USD quotes read 1.4200/03, the spread is the difference between 1.42000 and 1.4203, or 3 pips.
What is a Pip?
Pip is a small amount of price movement. Example: GBP / USD: 1.4000 then turned into 1.4001 so a movement of pip is 1 pip.
What is a Lot?
Lot is another name for Volume. Standard unit size of the forex trading transaction. Typically, one standard lot is equal to 100,000 units of base currency, while 10,000 units is the mini account, then 1,000 units are micro account.
Simple Definition of Forex trading (Foreign Exchange, Forex currency exchange) is the buying and selling currencies simultaneously or exchange one country to another country's currency. Forex market is non-stop cash market where currencies are traded from various countries, especially via brokers. Forex currency trading is constantly and simultaneously bought and sold through local and global markets and trader's investment increase or decrease based the value depending on currency movements. Forex market trading conditions can change at any time in response to real events.
Like in general markets, there is also is a bid / offer spread (differences between purchase price and sale price). From the difference between the major currencies, the difference between the price which the determinant of the market (market-maker) will sell ("ask" or "offer") to wholesale customers and the price at which the same market-maker will buy ("bid" ) from the same wholesale customer is minimal, usually only 3 pips. In EUR / USD price of 1.3022 a pip would be a '2 'at the end. So the bid / ask quote of EUR / USD likely to be 1.3022/1.3025.
Attractiveness of Forex trading for private investors are:
a. 24-hour trading, 5 days a week with nonstop access to the Forex dealers.
b. A large liquid market making it easy to trade major currencies.
c. A lively market offers opportunities to gain profit.
d. Standard instruments for controlling risk exposure.
e. The ability to achieve a profit when the market rose or fell.
f. Trade that were leveraged with low margin requirements.
g. Many options for trading with zero commission.
What is Leverage?
Leverage is the ability to help your account to position which is bigger than the total margin accounts. For example, if a trader has a margin of $ 1,000 in his account and he opened the $ 100,000 position, he leveraged 100 times or 100:1. When he opened the $ 500,000 position with $ 1,000 of margin in his account, his leverage is 500 times or 500:1. Increasing your leverage mean magnifies both profit or loss.
What is it Spread?
Spread is the difference between Bid and Ask prices. The difference between the sell quote and the buy quote or the bid and offer prices. For example, if EUR / USD quotes read 1.4200/03, the spread is the difference between 1.42000 and 1.4203, or 3 pips.
What is a Pip?
Pip is a small amount of price movement. Example: GBP / USD: 1.4000 then turned into 1.4001 so a movement of pip is 1 pip.
What is a Lot?
Lot is another name for Volume. Standard unit size of the forex trading transaction. Typically, one standard lot is equal to 100,000 units of base currency, while 10,000 units is the mini account, then 1,000 units are micro account.
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