FX Pip Trading

What is Technical Forex Analysis?

noreply@blogger.com (Anonymous) — Sat, 27 Apr 2013 20:41:00 +0600

The Technical Forex analysis is concerned with what has actually happened in the forex market, rather than what should happen. A Technical Forex Analyst will study the price and volume movements and from that data create charts to use as his primary tool. The Technical Forex Analyst is not much concerned with any of the “bigger picture” factors affecting the forex market, as is the fundamental forex analyst, but concentrates on the activity of that instrument’s market. Technical Forex Analysis is based on three underlying principles:

Forex Market action discounts everything

This means that the actual Forex rates is a reflection of everything that is known to the Forex market that could affect it, for example, supply and demand, political factors and market sentiment. The pure Forex Technical analyst is only concerned with Forex rates movements, not with the reasons for any changes.

Forex Rates move in trends

Technical Forex analysis is used to identify patterns of forex market behavior which have long been recognized as significant. For many given patterns there is a high probability that they will produce the expected results. Also there are recognized patterns which repeat themselves on a consistent basis.

History repeats itself

Chart patterns have been recognized and categorized for over 100 years and the manner in which many patterns are repeated leads to the conclusion that human psychology changes little with time.

List of categories of the technical Forex Analysis theory:

Indicators (Oscillators, eg: Relative Strength Index RSI)

Number theory (Fibonacci numbers, Gann numbers)

Waves (Elliott wave theory)

Gaps (High-Low, Open-Closing)

Trends (Following Moving Average)

Chart formations (Triangles, Head & Shoulders, Channels)

Technical Forex Traders use Forex trading information (such as previous prices and trading volume) along with mathematical indicators to make their Forex Trading decisions. This information is usually displayed on a graphical chart and is updated in real time throughout the trading day. Technical Forex traders believe that all of the information about a Forex market is already included in the price movement, so they do not need any other fundamental information (such as earnings reports). There are many different types of charts and many different mathematical indicators. Some indicators are better suited to short term Forex trading, and others are better suited for longer term trend following Forex trading. Individual Forex traders are usually technical Forex Traders. Technical Analysis appears to have been used at least 200 years ago in Japan. Modern Technical Forex Analysis is usually performed by the Forex trader interpreting their charts, but can just as easily be automated because it is mathematical. Some Forex traders prefer automatic analysis because it removes the emotional component from their Forex trading, and allows them to take trades based purely on the Forex trading signals.

What is Technical Forex Analysis?
Trend Line at Forex Market
“Pivot Point” Calculation
Understanding "Support" and "Resistance"
What is Forex indicator?
How to download indicator at Metatrader?

Trend Line at Forex Market

noreply@blogger.com (Anonymous) — Sat, 27 Apr 2013 20:40:00 +0600

Technical analysis is built on the assumption that prices trend line. For both trend identification and confirmation, trend Lines are an important tool in technical analysis. A trend line is a straight line that connects two or more price points and then extends into the future to act as a line of support or resistance. Many of the principles applicable to support and resistance levels can be applied to trend lines as well.

Trend Line is 3 kinds.

1. Uptrend

2. Downtrend

3. Sidewaytrend

Uptrend Line

An uptrend line has a positive slope and is formed by connecting two or more low points. The second low must be higher than the first for the line to have a positive slope. Uptrend lines act as support and indicate that net-demand (demand less supply) is increasing even as the price rises. A rising price combined with increasing demand is very bullish, and shows a strong determination on the part of the buyers. As long as prices remain above the trend line, the uptrend is considered solid and intact. A break below the uptrend line indicates that net-demand has weakened and a change in trend could be imminent. During uptrend, you can buy currency.

Downtrend Line

A downtrend line has a negative slope and is formed by connecting two or more high points. The second high must be lower than the first for the line to have a negative slope. Downtrend lines act as resistance, and indicate that net-supply (supply less demand) is increasing even as the price declines. A declining price combined with increasing supply is very bearish, and shows the strong resolve of the sellers. As long as prices remain below the downtrend line, the downtrend is solid and intact. A break above the downtrend line indicates that net-supply is decreasing and that a change of trend could be imminent. During dow ntrend, you can buy sell currency.

Sideway Trend

Sideway trend is a trend where price does not move like uptrend or downtrend. During sideway trend, one should not sell or buy currency.

What is Technical Forex Analysis?

Trend Line at Forex Market

“Pivot Point” Calculation

Understanding "Support" and "Resistance"

What is Forex indicator?

How to download indicator at Metatrader?

How to trade using “Pivot Point”?

noreply@blogger.com (Anonymous) — Sat, 27 Apr 2013 20:37:00 +0600

The “pivot points” are considered to be the major levels of “support and resistance” where you are likely to see repulsion of price. They are very useful tools that use the previous bars' highs, lows and closings to project “support and resistanc”e levels for future bars. . “Pivot Point” Calculation informs you how to:

• Predict price ranges in a given time period.

• Use the pivot point as a moving average.

• Build a trading system based on the pivot point.

How “Pivot Point” consists of:

Resistance 3 (R3)

Resistance 2 (R2)

Resistance 1 (R1)

Pivot Point (PP)

Support 1 (S1)

Support 2 (S2)

Support 3 (S3)

The “pivot points” can serve as a good entry and exit indicator. There are different ways you can trade with “pivot point” depending on the type of traders you are.

Do not worry about the calculation and the formula as there are numerous pivot calculators out there that you can use to help you calculate all the levels.

In this post today, I will go through the step on how you can set up “pivot points” on your chart.

R3 = High + 2 x (PP – Low)

R2 = PP + (High – Low) = PP + (R1 – S1)

R1 = (PP x 2) – Low

PP = (High + Low + Close) / 3 S1 = (PP x 2) – High S2 = PP – (High – Low) = PP – (R1 – S1) S3 = Low – 2 x (High – PP)

Step 1: Go to your Hourly Chart (Each candle represent an hour)

Step 2: Select a time that you are trading and then back date 24 hours (Example: if you are trading at 30th April 2012 7am , you will also need the data on the 1st May 2012 6am.

Hourly Chart Setup

Step 3: Place your cursor on the 30th April 2012 7am candle and record down the OPEN (O) value

Step 4: Look for the highest candle within the 30th April 2012 7am to 1st May 2012 6am and then place your cursor on the candle to record the highest (H) value

Step 5: Look for the lowest candle within the same period as step 4 and then place your cursor on the candle to record the lowest (L) value.

Step 6: Place your cursor on the 1st May 2012 6am candle to record the CLOSE (C) which is the closed value for the day.

Step 7: Go to your “pivot point” calculator and then enter the OHLC value to calculate the pivot levels. To download “pivot point” calculator http://www.traderknowledge.com/trading/pivot-point-calculator-free-download/

What is Technical Forex Analysis?
Trend Line at Forex Market
“Pivot Point” Calculation
Understanding "Support" and "Resistance"
What is Forex indicator?

How to download indicator at Metatrader?

Understanding "Support" and "Resistance"

noreply@blogger.com (Anonymous) — Sat, 27 Apr 2013 20:37:00 +0600

At forex market, the concepts of “support” and “resistance” are undoubtedly two of the most highly discussed attributes of technical analysis. “Support” and “resistance” are often regarded as a subject that is complex by those who are just learning to trade. In the financial markets, prices are driven by excessive supply (down) and demand (up). Supply is synonymous with bearish, bears and selling. Demand is synonymous with bullish, bulls and buying. As demand increases, prices advance and as supply increases, prices decline. When supply and demand are equal, prices move sideways as bulls and bears slug it out for control. If you clearly understand about “support” and “resistance”, you will be able to take proper decision what to do whether buy or sell. You will know how forex market works if you understand “support” and “resistance”.

In the above diagram, the zigzag pattern is making its way up (bull market). When the market moves up and then pulls back, the highest point reached before it pulled back is now “resistance” and it’s called “resistance level” (Number 1, 3,5).

When the market moves down and then pulls back, the highest point reached before it pulled back is now “support” and it’s called “support level” (Number 2,4).

What is “Support”?

At forex market, “support” is the price level at which demand is thought to be strong enough to prevent the price from declining further. When the price declines towards “support” and gets cheaper; buyers become more inclined to buy and sellers become less inclined to sell. By the time the price reaches the “support” level, it is believed that demand will overcome supply and prevent the price from falling below support. In the following screenshot, the cross line is called “support”.

“Support” does not always hold and a break below “support” signals that the bears have won out over the bulls. A decline below support indicates a new willingness to sell and/or a lack of incentive to buy. “Support” breaks and new lows signal that sellers have reduced their expectations and are willing to sell at even lower prices. In addition, buyers could not be coerced into buying until prices declined below “support” or below the previous low. Once support is broken, another “support” level will have to be established at a lower level.

Where “support” is established?

“Support” levels are usually below the "Pivot Point" , but it is not uncommon for a security to trade at or near “support”. Technical analysis is not an exact science and it is sometimes difficult to set exact “support” levels. In addition, price movements can be volatile and dip below “support” briefly. For this reason, some traders and investors establish “support” zones.

What is “Resistance”?

“Resistance” is the price level at which selling is thought to be strong enough to prevent the price from rising further. When the price advances towards “resistance”, sellers become more inclined to sell and buyers become less inclined to buy. By the time the price reaches the “resistance” level, it is believed that supply will overcome demand and prevent the price from rising above “resistance”.

Where "Resistance" is established?

“Resistance” levels are usually upper the "Pivot Point".

What is Technical Forex Analysis?
Trend Line at Forex Market
“Pivot Point” Calculation
Understanding "Support" and "Resistance"
What is Forex indicator?

How to download indicator at Metatrader?

What is Forex indicator?

noreply@blogger.com (Anonymous) — Sat, 27 Apr 2013 20:34:00 +0600

At Forex Market, Forex indicators are used to forecast the upward and downward movements of different currencies. Forex indicators are also known as forex technical indicators. The primary function of forex indicators is to maximize the profit and minimize the losses. Forex indicators are very useful and famous in the filed of trading markets. Almost all the investors whether individuals, business entities or huge organizations use forex indicators for risk free and profitable investments.

Indicators are used for identifying, or even creating patterns from the chaos of the currency market. In all cases, they receive the raw market data as the basic input, and manipulate it in differing ways to create actionable trading scenarios. The natural consequence of this description is that indicators are not tools of prediction. Instead, they are used to give order to the price data, so that it is possible to identify possible opportunities which can be exploited profitably by the trader. No indicator is right or wrong with respect to the signals that it emits, but each of them must be used with an appropriate money management strategy in order to deliver the desired results.

There are many different kinds of indicators, and it is not at all a hard task to define one's own tools for the purpose of evaluating the market provided that a basic literacy in averages is attained, what is desired from the created indicator is made clear. Different constructions will lead to different techniques which can then be employed most effectively as part of a trading strategy. Many methods and techniques are used in forex.

Every technique has its own disadvantages and advantages. A forex indicator hides all the complexities of numbers, signals and calculations from the user and provides them with a short and precise indication of currencies.

What is Technical Forex Analysis?
Trend Line at Forex Market
“Pivot Point” Calculation
Understanding "Support" and "Resistance"
What is Forex indicator?

How to download indicator at Metatrader?

How to download indicator at Metatrader?

noreply@blogger.com (Anonymous) — Sat, 27 Apr 2013 20:33:00 +0600

On this post, you will be able to understand how to download MT4 and MT5 Forex indicators that can be attached to the MetaTrader Forex trading platform to boost your Forex trading performance. Using forex indicators, you can develop your own Forex trading strategies or you can simply follow them as the trading signals.

Step 1. At first you have to download/collect your desired indicator. Generally the format of indicators are mq4,mq5, ex4, ex5.

Step 2. Then go to the folder where the Metatrader is installed (My Computer>C: drive>Program files>[MetaTrader-folder]>experts>indicators). In this folder, paste your desired indicator.

Step 3. Run Metatrader4

Your new indicator will be available from the top menu: "Insert -> Indicators -> Custom" or from the Navigator window on your right sidebar, again under Custom Indicators.

What is Technical Forex Analysis?
Trend Line at Forex Market
“Pivot Point” Calculation
Understanding "Support" and "Resistance"
What is Forex indicator?

How to download indicator at Metatrader?

How to” Sell” at Forex Market?

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 14:14:00 +0600

It is very easy to understand for every forex trader that how to “Sell” at forex market. Selling depends on the trading platform you use.

Every Forex broker gives you the Forex trading Platform manual or will be able to guide you how to take step of setting buy/sell orders, profit targets and exits per you request.

Here is an example of how to order “Sell” at METATRADER4.

At first you have to click “tools” menu at menu bar than click “New Order” and you will see the following new window of “Buy/ Sell”.

In the above picture,

Symbol - the currency list you'll be trading Volume - how many lots you'll be buying Stop loss - you need to put the price you want to be stopped at in case a trade goes against you. Take profit - your profit goal. Comment - leave it blank. Type - leave it as Instant execution. Then you have two buttons: Buy and Sell. Press “Sell” than click Ok in the new window. A new trade will open.

You will be able to see it on your chart and also you can check menu 'Trade', located below your chart. If you now try to Right click on this trade, you will have an option to 'Modify or Delete order', where you'll be able to change your trading preferences.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

How to "Buy" at Forex Market ?

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 14:13:00 +0600

It is very easy to understand for every forex trader that how to “Buy” at forex market. Buying depends on the trading platform you use.

Every Forex broker gives you the Forex trading Platform manual or will be able to guide you how to take step of setting buy/sell orders, profit targets and exits per you request.

Here is an example of how to order “Buy” at METATRADER4.

At first you have to click “tools” menu at menu bar than click “New Order” and you will see the following new window of “Buy/ Sell”.

In the above screenshot,

Symbol - the currency list you'll be trading Volume - how many lots you'll be buying Stop loss - you need to put the price you want to be stopped at in case a trade goes against you. Take profit - your profit goal. Comment - leave it blank. Type - leave it as Instant execution. Then you have two buttons: Buy and Sell. Press “Buy” than click Ok in the new window. A new trade will open.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

Long and short position at Forex Market

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 14:12:00 +0600

Long position is a "buy" position, meaning that this position will be in profit if price goes up.

Idea about Short position:

Short position is a "sell" position, meaning that this position will be in profit if price goes down.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

Stop Loss and Take Profit at Forex Market

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 14:11:00 +0600

A stop loss should be entered for each and every trade you ever make on the foreign exchange market. A stop loss prevents you from runaway losers, due to the fact that it will automatically close a losing position before your account balance is depleted. It would never be recommended to trade without a stop loss as doing so is like risking your entire account balance on one trade.

If you were to buy a lot of GBP/USD but wished not to lose more than $250 on this single trade, you would set your stop loss 25 pips below the price at which you entered the trade. If you bought GBP/USD at $1.50, you’d want to enter a stop loss at $1.4975, thus preventing a loss greater than $250.

How to "Take Profits" at Forex Market

Take profit orders are the opposite of a stop loss. The take profit is a price at which you would like to close your position for a profit, above or below the current price of the currency. Just like a stop loss, you can enter this order either during your initial entry to buy a currency, or after, and it can be changed at any time.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

What is Lot at Forex Market?

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 14:10:00 +0600

Lot is a measure or quantity increment acceptable to or specified by the party offering to buy or sell. Used also as an alternative term for lot quantity.

According to size, Forex broker is divided into three types.

1. Standard Lot Broker

2. Mini Lot Broker

3. Micro Lot Broker

At standard lot broker,

10 lot = $100/pip,

1 lot = $10/pip

.1 lot = $1/pip

.01 lot = $.1/pip

At mini lot broker,

10 lot = $10/pip,

1 lot = $1/pip

.1 lot = $.1/pip

.01 lot = $.01/pip

At micro lot broker,

10 lot = $1/pip,

1 lot = $.1/pip

.1 lot = $.01/pip

.01 lot = $.001/pip

A standard lot has the following characteristics: * 1,000 USD
* Leveraged at the rate of 100 to 1
* Total controlled currency of $100,000

A mini lot has the following characteristics: * 100 USD * Leverage of 100 to 1 * A total control of $10,000 of the base currency

A lot has no expiration date or time restraints due to the automatic roller policy.

In a forex mini-account, the lot or contract size traded are 10,000 of the base currency whereas for a regular forex account, the lot or contract size traded are 100,000 of the base currency. Therefore, the mini-account contract is 1/10th the size of a standard forex contract

The smaller the lots size traded, the lower will be profits, but also the lower will be losses.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

Currency Pair at Forex Market

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 14:09:00 +0600

In general, the eight most traded currencies are used and these pairs are the U.S. dollar (USD), the Canadian dollar (CAD), the euro (EURO), the British pound (GBP), the Swiss franc (CHF), the New Zealand dollar (NZD), the Australian dollar (AUD) and the Japanese yen (JPY).

Currencies must be traded in pairs. Mathematically, there are 27 different Currency Pairs that can be derived from those eight currencies alone. However, there are about 18 currency pairs that are conventionally quoted by forex market makers as a result of their overall liquidity.

Major Currencies

The total amount of currency trading involving these 18 pairs represents the majority of the trading volume in the FX market. This manageable number of choices makes trading a lot less complicated compared to dealing with equities, which has thousands of possible choices to choose from.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

Spread at Forex Market

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 14:08:00 +0600

The spread is the amount of pips between the bidding price and the asking price is called the spread. The spread is what forex brokers use to make money on every forex trade placed through their network. For example, the forex broker may be paying a price of 1.3600 for buying or selling. The broker will then allow you to buy the currency for 1.3603 or sell it for 1.3597. The spread always stays around the actual price that the forex broker is paying. So when you buy, you get one end of the spread and when you sell you get the other end of it, and vice versa. By the time you close your trade, you will have always paid the spread.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

Pipetis at Forex Market

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 14:07:00 +0600

A pipetis is the smallest price increment in forex trading. Prices are quoted to the fifth decimal point in the forex market. Pipetis is also so important for calculating profit or loss in forex trading.

In the following screenshot, price is 1.24301 and 1.24364. In the following price "1", "4" after pip is pipetis

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

Pip value at Forex Market

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 14:06:00 +0600

Pip value is an important topic in Forex Market. Forex traders always calculate Pip value in Forex Market. It's a simple calculation. A "pip" is the smallest increment in any currency pair. In EUR/USD, a movement from .8832 to .8833 is one pip, so a pip is .0001. In USD/JPY, a movement from 132.20 to 132.21 is one pip, so a pip is .01. How much in dollars is this movement worth, for example, per 10,000 Euros in EUR/USD? How much is one pip worth per 10,000 Dollars in USD/JPY? We will refer to the size, in this case 10,000 units of the base currency, as the "Notional Amount". The formula for calculating a pip value is therefore:

(One pip, with proper decimal placement/currency exchange rate) x (Notional Amount)

Using USD/JPY as an example, this yields:

(.01/132.21) x USD10,000 = $0.757

or 76 cents per pip

Using EUR/USD as an example, we have:

(.0001/.8833) x EUR10,000 = EUR 1.1321118

But we want the pip value in USD, so we then must multiply EUR1.1183 x (EUR/USD exchange rate):

EUR 1.1183 x .8942 = $1.00

This is in fact a phenomenon you will see with any currency in which the currency is quoted first (such as EUR/USD, GBP/USP, or AUD/USD): the pip value is always $1.00 per 10,000 currency units. This is why pip (or "tick") values in currency futures, where the currency is quoted first, are always fixed.

Approximate pip values for the major currencies are as follows, per 10,000 units of the base currency:

USD/JPY: 1 pip = $.76; In other words a change from 132.20 to 132.21 is worth about $.76 per $10,000.

EUR/USD: 1 pip = $1.00; .8832 to .8833 is worth $1.00 per 10,000 Euros.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

Pips at Forex Market

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 14:06:00 +0600

A pip is the smallest price increment in forex trading – pip stands for short percentage in point. Prices are quoted to the fourth decimal point in the forex market. Pips are so important because they are the basis for calculating profit or loss in forex trading. Pips is the plural number of pip. For most currencies its 0.0001. In the following screenshot, "0", "6" indicate pip. You get real picture of pip in the following chart.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

Timeframe at Forex Market

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 14:05:00 +0600

What is the best time frame in Forex market? What is the most profitable time frame in Forex? These are the common questions are rising day after day in minds of Forex traders.

Actually each time frame displays same data, but in different intervals.
Let’s take the most preferred Forex time frames:

These time frames are also perfect for beginners to test their feel about the Forex market. On daily charts each price bar represents one day, thus a change on the chart will be observed once a day. On hourly time frame new price bars will appear every hour, putting more data on the chart for analysis. 5 minute chart will produce a new price bar every 5 minutes, showing market changes fast and in greater details.Each time frame can be traded successfully and yield opportunities for profitable trading.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

What is Margin at Forex Market?

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 14:02:00 +0600

Margin is money you need to have in your broker account to secure your open position. Different brokers require different amount of margin money to keep your positions open. In forex market, trading on a margined basis is not a complicated concept. Basically, when a trader trades on margin he is using a free short-term credit allowance from the broker that is offering the margin. This short-term credit allowance is used to purchase an amount of currency that greatly exceeds the account value of the trader.

For example:

Trader X has an account with EUR 50'000 with ACM. He trades ticket sizes of 1'000'000 EUR/USD. This equates to a margin ratio of 5% (50'000 is 5% of 1'000'000). How can trader x trade 20 times the amount of money he has at his disposal? The answer is that he temporarily receives the necessary credit to make the transaction he is interested in making. Without margin, trader X would only be able to buy or sell tickets of 50'000 at a time.

Margin serves as collateral to cover any losses that you might incur. Since nothing is actually being purchased or sold for delivery, the only requirement, and indeed the only real purpose for having funds in your account, is for sufficient margin.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

What is Leverage at Forex Market?

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 14:00:00 +0600

In forex trading, investors use leverage to profit from the fluctuations in exchange rates between two different countries. Leverage is a loan that is provided to an investor by the broker that is handling his or her forex account. A typical Forex Broker would let you borrow 99% of the total value required to open a trade and you only need to come up with the remaining 1%. So if you are about to trade $1000 then you only need to have $10. Big difference from normal stock trading. Also Forex broker won’t charge you interest on the borrowed amount.

When an investor decides to invest in the forex market, he or she must first open up a margin account with a broker. Usually, the amount of leverage provided is either 50:1, 100:1 or 200:1, depending on the broker and the size of the position the investor is trading. Standard trading is done on 100,000 units of currency, so for a trade of this size, the leverage provided is usually 50:1 or 100:1. Leverage of 200:1 is usually used for positions of $50,000 or less.

To trade $100,000 of currency, with a margin of 1%, an investor will only have to deposit $1,000 into his or her margin account. The leverage provided on a trade like this is 100:1. Leverage of this size is significantly larger than the 2:1 leverage commonly provided on equities and the 15:1 leverage provided by the futures market. Although 100:1 leverage may seem extremely risky, the risk is significantly less when you consider that currency prices usually change by less than 1% during intraday trading. If currencies fluctuated as much as equities, brokers would not be able to provide as much leverage.

Leverage	Amount Traded	Required Margin
1:1	$100,000	$100,000
2:1	$100,000	$50,000
50:1	$100,000	$2000
100:1	$100,000	$1000
200:1	$100,000	$500
400:1	$100,000	$250

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

Money Management at Forex market

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 13:59:00 +0600

Trading in Forex is as much about losing money as about making money. Risks in Forex refers to the possibility of losing entire investment while trading. Trading Forex is known as one of the riskiest capital investments. In Forex traders always search for the most efficient ways to limit risks or at least lessen risk effects. For this purpose various risk management and money management strategies are created.

It is impossible to avoid risks in Forex trading. In order to limit risks traders use methods of setting protective stops, trailing stops; use hedging techniques, study scalping strategies, look for the best deals on spreads among brokers etc.

Traders with the best risk management strategy earn the largest profits in Forex.

Money management system is a one kind of forex trading plan which controls how much you risk when you get an entry signal from your forex trading system. One of the best money management methods used by many professional forex traders is to always risk a fixed percentage of your equity (e.g. 2%) per position.

Money management in Forex trading is one of the most important problems of new and even advanced forex traders. Almost everybody can find a good trading system that can be profitable but something that causes traders to lose. Lacking of a proper money management strategy and discipline, many forex traders lose money in their trading. Although money management is so important and critical, it is still very easy to follow. Forex money management have several different aspects and stages and should be started from the very first stages of your live forex trading business which is opening your live trading account.

Here is an example of bad effect of high and low trade. High and Low trade influences a lot in forex trading.

Trades	Account Balance	Risking 2% of total account per trade	Trades	Account Balance	Risking 10% of total account per trade
1	Start-5000	100	1	Start-5000	500
2	4900	98	2	4500	450
3	4802	96	3	4050	405
4	4706	94	4	3645	364
5	4612	92	5	3281	328
6	4520	90	6	2953	295
7	4430	89	7	2658	265
8	4341	87	8	2392	239
9	4254	85	9	2153	215
10	4169-17% of the account has been lost		10	1938-over 60% of the account has been lost

It is clear that there is a great difference between 2% and 10 % risk. If you take 2% risk, you will lose 17% of your capital. If you take 10% risk, you will lose over 60% of your capital. From this chart, it is clear that money management is very essential in forex market.

Money Recovering

It is very hard to recover the lose amount, if any trader loses some money from account. If you lose 50% of your account, you have to profit 100% of your new trade to recover your money.So money management is so important in forex market. Now I will show you how easy it is to calculate your position size. Lets say you have a $10,000 account and you have found a trade setup with EUR-USD which has to have a 100 pips stop loss. This 100 pips stop loss should equal to 2% of your capital, based on money management rule that says you should not risk more than 2% of your capital in each trade.

2% of $10,000 is $200:

$10,000 x 0.02 = $200

Now tell me if 100 pips should equal to $200, what value each pip should have? That is right. Each pip should equal to $2:

$200 / 100 pips = $2

So to risk only 2% of your money in this trade, your position size (the amount of money that you trade) should be chosen in the way that each pip equals $2.

Now the question is how much EUR-USD you should trade if you want each pip to equal $2.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

Forex Trading Sessions

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 13:58:00 +0600

There are four trading sessions in the Forex market, at every working day when the Forex markets are open: The Pacific trading session, the Asian trading session, the London trading session and the New York trading session.

London trading session

London trading session starts about 8 A.M. GMT and ends down around 4 P.M. GMT. The Forex currencies which are the most active during these times are GBP, EUR and USD.

New York trading session

New York trading session starts about 1 P.M. GMT and ends down about 10 P.M. GMT. The Forex currencies which are the most active during these times are EUR, GBP,AUD, JPY, and USD.

Asian trading session

Asian trading session very often is the quietest session of the Forex market. All currencies move very slow and it’s not a very good time to day-trade. The only real Forex currency in this period, which has newsworthy activity, is the JPY and the activity is slow until the main financial events happen.

Pacific trading session

Pacific trading session begins when Australian and the New Zealand markets open. This is one of the quietest sessions for Forex trading. Majority of traders’ activity is focusing on the currencies: AUD, NZD, USD.

The best times for Forex trading within Forex Market Hours, no matter of your trading methods, are during the London and New York trading sessions overlap. Forex market is full of very active participants during these times and the Forex pairs are really moving. For the most part, even the big fundamental news from the different parts of the world comes out during these hours. Trading during these times is your very good chance to receive in while the Forex market is making important moves and it can be your best chance to score fast profits.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

Forex Market Hours

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 13:58:00 +0600

One of the most advantages of Forex markets is that forex market is open during the all working week – from Sunday 10:00 P.M (GMT) to Friday 10:00 P.M (GMT). But in this case , there isa logical question what times are the best for trading within Forex Market Hours?

Generally, the most interesting Forex trading times are between the United Kingdom’s markets in London begin their activity, around 8 A.M. (GMT), and the end which is when the markets in the USA are going to close around 10 P.M. (GMT). The absolute high-activity time in the Forex markets are between the United Kingdom to US overlap between 1 P.M. (GMT) to 4 P.M. (GMT). These are the times which can be considered as one of the most liquid or when the most Forex traders are trading in the markets.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

Forex Trading Platform

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 13:57:00 +0600

Forex trading platform is a software ensuring high quality operation in the financial markets, which also helps traders to conduct technical analysis, carry out transactions and manage trading account. Popular terminals are MetaTrader 4 and MetaTrader 5. These are easy to use and have visual interface. They are highly-efficient and multi-functional. New version MT5 distinguishes by updated graphs, impressive set of technical indicators and analytical tools for convenient and effective trade in forex market.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

What is traded at Forex Market?

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 13:56:00 +0600

What is traded at Forex Market? It is an easy answer that what is traded in forex market. The answer is currency trading. All over the world there are many official currencies that are used in forex market, but there only a handful of currencies that are traded actively in the forex market. In currency trading, only the most economically/politically stable and liquid currencies are demanded in sufficient quantities. For example, due to the size and strength of the United States economy, the American dollar is the world's most actively traded currency. When we buy USD, then basically we buy a share of US economic. We think that the economic condition of US is developing. After increasing price, we will sell it. Then we get profit from this trade.

What Is Forex?
What is traded at Forex Market?

Forex Trading Platform

Forex Market Hours

Forex Trading Sessions

Money Management at Forex market

What is Leverage at Forex Market?

What is Margin at Forex Market?

Timeframe at Forex Market

Pips at Forex Market

Pip value at Forex Market

Pipetis at Forex Market

Spread at Forex Market

Currency Pair at Forex Market

What is Lot at Forex Market?

Stop Loss and Take Profit at Forex Market

Long and short position at Forex Market

How to "Buy" at Forex Market ?

How to” Sell” at Forex Market?

What is Forex Market?

noreply@blogger.com (Anonymous) — Fri, 26 Apr 2013 13:55:00 +0600

Foreign Exchange Market, also known as the "Forex" or "FX" market is the largest financial markets in the world, with a daily average turnover of US$4 trillion. "Foreign Exchange" is the simultaneous buying of one currency and selling of another currency. Currencies are traded in pairs, such as Euro/US Dollar (EUR/USD) or US Dollar/Japanese Yen (USD/JPY). Forex Trading is a one kind of trading where currencies from different countries are sell or buy against each other. Forex is an easy and convenient way to earn money from home. On account of widespread development of internet technology and presence of a large number of brokerage companies, online forex trading is accessible for everyone. You can run forex trading at home, in the office or in a café house and transact at Forex via your internet connected PC or mobile phone. Currency trading is a reliable way to earn money where the amount of earning depends solely on you.Forex has exploded in popularity over the last 40 years as more and more people have discovered currency trading. Throughout the year, world currencies fluctuate in value. Some currencies grow in value, while other currencies lose value. Investors make money by exchanging two currencies that are fluctuating in value.
There are many participants in the currency markets. Governments exchange currencies. International businesses exchange money every day. Other players include private investors, hedge funds, and banks.
Since the major world currencies are centered in different locations around the world, the Forex market is open 24 hours a day. Markets close on the weekends, but the markets are open the rest of the week.
Every participant works with their own currency first. The British exchange pounds, and Americans trade dollars. All currencies, known as goods in Forex, are traded in pairs. There are eight major currencies in the market, and this will be discussed in greater detail in the next section.
Participants make money in Forex trading by buying low and selling high. Successful traders learn how to recognize market indicators, trends, and other financial data. Participants make money quickly through leverage. Leverage is simply the ratio of investment to financial value. Leverage allows the participants to make or lose money fast!
Forex is somewhat similar to the stock market, but there are still many differences. In the stock market, physical shares are purchased. In the Forex markets, you only exchange agreements to trade shares.
In order to make real money in Forex, it is important to understand the history and general principles of the market. The most successful investors understand the markets inside and out. They have a respect for the history of the market, and they use this history to make better decisions in the future.
Forex has exploded in popularity over the last 40 years as more and more people have discovered currency trading. The currency exchange market, also known as Forex, is one of the fastest growing markets today. It is the largest market in the world. The average day will see over 2.5 trillion dollars exchange hands! Throughout the year, world currencies fluctuate in value. Some currencies grow in value, while other currencies lose value. Investors make money by exchanging two currencies that are fluctuating in value.
There are many participants in the currency markets. Governments exchange currencies. International businesses exchange money every day. Other players include private investors, hedge funds, and banks.
Since the major world currencies are centered in different locations around the world, the Forex market is open 24 hours a day. Markets close on the weekends, but the markets are open the rest of the week.
Every participant works with their own currency first. The British exchange pounds, and Americans trade dollars. All currencies, known as goods in Forex, are traded in pairs. There are eight major currencies in the market, and this will be discussed in greater detail in the next section.
Participants make money in Forex trading by buying low and selling high. Successful traders learn how to recognize market indicators, trends, and other financial data. Participants make money quickly through leverage. Leverage is simply the ratio of investment to financial value. Leverage allows the participants to make or lose money fast!
Forex is somewhat similar to the stock market, but there are still many differences. In the stock market, physical shares are purchased. In the Forex markets, you only exchange agreements to trade shares.
In order to make real money in Forex, it is important to understand the history and general principles of the market. The most successful investors understand the markets inside and out. They have a respect for the history of the market, and they use this history to make better decisions in the future.

What Is Forex?
What is traded at Forex Market?