FOREX SECRET

Operations in the Trading Room

2007-10-10T06:29:00.000-07:00

SWAP RATE IS SMALLER THAN INTEREST DIFFERENTIAL

In this case, presented in Exhibit 8.3, the interest differential is also 3 percent. However, the swap rate of150 point for three months indicates a discount of 2.50 percent per annum on the three-month pound against the dollar.

The general rule is that in covered interest arbitrage, we shall want to invest in the higher-interest currency except when the discount in that currency is higher than the interest differential. Thus, in this case we will want to invest in the pound, the higher-interest-rate currency.

To generate pounds which can be invested without assuming any foreign exchange risk. we borrow dollars and swap them spot into pounds and back into dollars for three-month delivery. The cost of doing this will be:Interest rate on dollar borrowings7.00%
Swap rate against us (sell spot dollars against pounds; buy three-month dollars against pounds at a premium for dollars)+2.50 9.50% Net cost of pounds on a covered basis9.50%
The pounds obtained in the spot part of the swap transaction can be invested at 10 percent. The net result is a profit of 0.50 percent per annum.

Again, in this transaction all cash flows are matched: for every inflow in a given currency at a given date, there is an outflow. and vice versa. Also, the net exchange position is basically zero except for the net profit which can be covered in the forward exchange market. Interests earned accumulate in pounds while the interest on the borrowings is payable in dollars.

To eliminate this risk, the interest earned in the pound investment could be sold in the exchange market for three-month delivery at the initial 2.5 percent discount on the pound against the dollar.

This disequilibrium in the market will also tend to be short-lived. The arbitrage transaction described here will tend to move the various rates back into equilibrium.

Taking Advantage of Expected Changes in Interest Rates

If we anticipate a change in interest rates, we are also anticipating a change in the net accessible interest differential and. therefore, in the swap rate. We can take advantage of the expected change in rates in either the forex news

money market or in the foreign exchange market. In the money market, we will simultaneously borrow and invest in the currency whose interest we are expecting to change. However, the maturity of the borrowing will be different from that of the investment. In the foreign exchange market, we have to deal with two currencies. To take advan¬tage of the expected change in the swap rate, we will both buy and sell each currency simultaneously. However, the maturity of the buy and sell in each currency will be different. Let's illustrate the mechanics of this transaction.

Consider a case where the interest rate of a currency is expected to decrease. The cost summarize the present situation and the forecast.1 We expect interest rates on the pound will decline within a month, and so will the discount on the forward pound. How does one take advantage of this piece of intelligence?

MONEY MARKET APPROACH

In this market we want to lock in the present high return of 13 percent on placements in pounds. So, we make a placement for, say, six months. To finance this loan we need to raise funds; however, since we expect interest rates to decline in a month, we shall borrow the funds only for that period. Assuming that the pound interest rate changes as anticipated, the returns will be zero for the first month (lending and borrowing cost are the same) and 1 percent per annum for the remaining five months (13 percent on the loan less 12 percent borrowing costs). Author Resource:- The forex website is about forex news which supplies the latest articles regarding Forex Trading, reviews on good forex platforms for beginners, exchange rates, and more important information for the forex investor also individual forex traders can take advantage of the market expertise and financial strength of GAIN Capital Group and access an institutional currency trading platform. http://www.forex-times.net

Choose a way of making money online that suits you

2007-10-08T02:14:00.000-07:00

By : bob bella
Submitted 2007-10-08 02:18:33

Many people today mostly prefer to go online to start an internet business either to increase their income or to gradually truncate their offline income from any source with an online income. They happily join business opportunities and money making ideas online filled with hopes, aspirations and dreams of great wealth. It is natural and who in this world does not want to get rich and live their life lavishly. But unfortunately what most people fail to get the picture is whether the particular business opportunity will work for them. Simply rushing after the opportunities blankly will do no good to you instead it will drain out what is left with you.

The internet is an opportunity that provides people fun, information and also technologies to make money. This technology available to people today that is used over the internet is providing numerous opportunities helping people to make hundreds if not thousands of dollars a month. But the most important thing is that you creativity needs exposure and that that could be done if you make your own websites. There are many companies that promise to help people like you to help you monetize your blog, website, and many more that will further support you to "Make money online". For every visitor that visits your sites the larger your money opportunities grow. You can publish adsense and cost per clicks ads on your site that will help you to earn from your websites.

The opportunities to make money online are endless with the above mention feature and other features that include Internet mlm programs that require you to enroll and convert online customers into paying members by calling them on the phone or by selling their products either online or offline. There is another opportunity like High Yield Investment Programs that are also online programs that take your money and invest it online in forex and other types of securities but take care as these are high risk investments. The elaborate and systematic plan of action with all these programs is to take out your principal and then compound the initial invested amount partially and earn more and more each month. Opportunity like Doubler programs are basically programs that double your money invested with them after a certain period of time. But these programs require some time of yours each day to read the online forums of that particular program to check whether the company’s performance and check whether they can afford to pay their members.

In the end it could be concluded that spend some time to learn all you can about that form of money making and make a good decision so that you need not repent for it after.

Author Resource:- make money online

The ABC’s of options trading

2007-10-06T03:18:00.000-07:00

Well, we have to start somewhere on our journey. So forgive me if I’m going to assume that we are all beginners to the world of stock and options trading.

Options can be very confusing for a beginner. There are terms that are foreign to many investors who are only familiar with stocks – such as call and puts, beta, theta, gamma, strike, covered call, etc.

Let’s start from the beginning. I think one of the easiest way to start learning is go to the Finance section of www.yahoo.com and let’s use Microsoft Corporation (Ticker Symbol: MSFT) as a guide to our options education.

On the left hand menu, select Options. Now you should see the option page for Call Options and Put Options. Call Options is defined as the right, but not the obligation, to buy the stock at the strike price prior to expiration. Put Options is defined as the right, but not the obligation, to sell the stock at the strike price prior to expiration.

Now we have to define “Strike Price”. A strike price is the price that you can exercise the stock irregardless of the current market price. Say for example the current market value of a Microsoft stock is $30.00. You purchase one call option at a strike price of $35 with an expiration date of September 2007 which is two months away. Let’s say for example the stock price of Microsoft rose to $40 after one month. Now you are ready to profit from the call option you purchased one month ago. Your call option gives you the right to buy the Microsoft stock at $35.00 and turn it around to sell the stock at the market value of $40.00, which gives you a profit of $5 per stock (not taking into account fees incurred).

So in a nutshell, when you buy a call option, there is another person out there who is selling that call option. So if the call option increase in value due to the rise of the stock price, you would exercise that call option by one of 2 ways to profit –

1. Exercise the call option by purchasing the shares from the seller at the strike price and turn around and sell it to the market at the market price, thus pocketing the difference,

2. Sell the call options itself, not the stock. The intrinsic value of the options has risen up due to the rise in the stock price. This way you do not need to come up with funds to purchase the stocks from the seller. All you need to do is sell the call options contract using the same brokerage firm that you bought the call options contract.

Of course, the example provided above are just simplistic scenario. Many other factors can come into play to affect the profitability and loss of investing in options, such as volatility, and greeks such as beta, gamma, theta, etc. I will provide more education on these other factors but today, you just learned the ABCs of options. Author Resource:- Patrick Lim operates www.LazyGuyOptionTrader.com, a blog about his personal journey to take $50,000 to turn it into $1,000,000 in 5 years. He likes to share the strategies he uses to try to accomplish his goal and is now giving away a FREE article he wrote about how to make a quick profit during times of market volatility.

Join him on his journey and get FREE tips and strategies at:
http://www.LazyGuyOptionTrader.com

Make or Break Your Options Trade

2007-10-06T03:13:00.000-07:00

There are 2 factors that experienced options traders believe affects the success of any option trader - the strike price and the time to expiration.

Most beginners prefer to choose to buy the least expensive and out-of-the-money options (I will explain in a bit what this means), which expire one month later. The reason they prefer to do so is because of the low cost of this type of options. However, this is probably the worst way to trade an options because the majority of these type of options become “worthless” at expiration.

Out-of-the-money (OTM) options are options that are further away from the current market stock price. Let’s use Microsoft (Nasdaq: MSFT) again as an example. If MSFT is trading today at $30, a $40 strike price of a call option is OTM (remember a call option? If not, read my blog here: http://lazyguyoptiontrader.com/learning_to_trade_options). A $25 strike price is in-the-money (ITM), and a $30 strike price is at-the-money (ATM). Basically these terms represent how far the strike price is from the current market price.

When buying cheap, out-of-the-money calls, time is our fiercest enemy. Every day, even if the underlying stock is unchanged or up a fraction, the time premium is slowly slipping away. As time goes by, our fear of losing more money increases. That fear can cause sleepless nights and make us do odd things, such as selling the option to salvage what we have left just before it becomes profitable. Being right but losing money is one of the worst feelings an option trader can experience.

Almost all beginners, including myself, make similar mistakes. Novices usually end up losing money and sleep. Or they will act under pressure to sell some put options for a slight loss two days before the options reverses direction and could have handed us beginners a nice profit. The hard knocked education of losing money has changed the way I now play the options market.

I started learning from the professionals simple technical analysis of the underlying stock. Some of the simpler analysis includes determining the overall trend of the stock using 50- and/or 200-day moving averages, along with support and resistance levels (previous highs or lows, moving averages, retracement levels, etc.). I will talk more about these in future blogs.

The essence is to buy a call as close to support as possible, or buy a put as close to resistance as possible. That way, your risk is minimal because a break below support or above resistance gets you out of the trade with a reasonable loss.

Once I’ve declared my option strategy, choosing the strike price and time to expiration are paramount. Time erosion is one of my main concerns. So, I look at the options chain to determine which in-the-money-option with little or no time premium is closest to the price of the underlying stock.

Here’s an example taken from one of the newsletters that I subscribed to which perfectly illustrates the above example:

In late January, Safeco (ticker symbol: SAFC) triggered a sell signal and the RSI (relative strength) fell below 50. It then dropped below its 50- and 200-day moving averages. The stock could not make much headway after reaching its February lows, despite a strong showing by the Dow and S&P. So, I looked for a spot to buy some puts.

On March 19, SAFC traded up to its 50-day moving average and the RSI was close to the 50 line (bullish above, bearish below). The stock was trading at $52.70 and the April $55 put was $2.30-$2.60. Although I did pay a 30-cent time premium, the leverage was much better than buying the April $60 put.

The only problem with playing in-the-money options more than one month out is that the liquidity can be low. That can mean a large spread between the bid and ask. In cases like that, you may have to choose an option that is not ideal. All we can do is use the best strategy available.

Your exit point would be a break above $53.50, which would produce about a $1 loss. But if it reaches the target of about $49.40, it should produce more than a 100% gain. Author Resource:- Patrick Lim operates www.LazyGuyOptionTrader.com, a blog about his personal journey to take $50,000 to turn it into $1,000,000 in 5 years. He likes to share the strategies he uses to try to accomplish his goal and is now giving away a FREE article he wrote about how to make a quick profit during times of market volatility.

Join him on his journey and get FREE tips and strategies at:
http://www.LazyGuyOptionTrader.com

What options to trade after fed rate cut?

2007-10-06T03:02:00.000-07:00

Honestly, I’m not a big fan of the half point cut today by the Feds, but you really shouldn’t care what I think because I’m not an economist. That’s the job of the Feds. The reason I’m not so hot about the reduction is because I am a strong believer in market’s own correction, and not government intervention.

Anyway, that’s beyond the point. The point is, what option trades should I enter after today? Last week, I chose to enter into some put options on the S&P Index because the market has been moving in a zig-zag fashion in the last two months. Having seen some up days last week because of Wall Street’s euphoria with the Feds cutting interest rates, I wasn’t so optimistic and actually bet on the Fed not doing anything or only a quarter point cut.

Now that was a $2000 lesson learnt (as you can see, I avoid putting in more than 5% of my risk money). I admit that I should have stick to this one lesson from one of my options trading instructor 2 years ago - Never enter into one position on a trade. Meaning, I should not have bet on only one direction. However, I should still feel vindicated because back in the low of August, I had purchased some stocks and options that I have been watching for a while now to buy at a discount. Those have gain nicely for me. Anyway, that again is beside the point of this blog.

Looking forward, what is the best option trade to get into from the Fed’s action today. The best strategy is to take on a straddle position. What is a straddle position? As defined by Investopedia, “An options strategy with which the investor holds a position in both a call and put with the same strike price and expiration date.” So this strategy allows me to play both direction with the expectation that in the next couple of weeks, the market will either move dramatically higher or lower.

Straddle is a good option trade if you believe the market or the particular stock will make a big move either up or down. You only lose money if it doesn’t move much at all. With the current volatility in the market, stagnation doesn’t appear very likely.

Next question, which options should I adopt a straddle position? I could either trade the S&P500, Dow, or Nasdaq. This time, I chose to trade the Nasdaq (ticker: QQQQ) because the Nasdaq 100 chart is in a vertical trend up and trending towards its 52 weeks high. It appears bullish but at the same time, is hitting resistance so may suddenly become bearish if it doesn’t break resistance. So to take my own lesson of never enter into a trade in one direction, I will adopt a straddle position on the QQQQ.

With the QQQQ at a market price of $50.04 as of closing today, I plan to enter the Nov 07 $50 Call at no more than $2.00 and the Nov 07 $50 Put at no more than $1.60. I expect to exit this trade within 2 weeks to both avoid time erosion but also taking advantage of the current momentum and euphoria because of the rate cut.

Patrick Lim aka Lazy Guy Trader

Up, up, and away! Author Resource:- Patrick Lim operates www.LazyGuyOptionTrader.com, a blog about his personal journey to take $50,000 to turn it into $1,000,000 in 5 years. He likes to share the strategies he uses to try to accomplish his goal and is now giving away a FREE article he wrote about how to make a quick profit during times of market volatility.

Join him on his journey and get FREE tips and strategies at:
http://www.LazyGuyOptionTrader.com

Types of Brokers and their respective roles.

2007-10-06T02:47:00.000-07:00

Brokers are agents or professionals who mediate between a borrower and a lender. These agents collect all the necessary information about the borrower or lender, depending on who is their client, including medical history, employment of the person with whom his client is likely to deal, to ensure a smooth and risk-free transaction. Brokers also provide their clients’ necessary credit and financial information to the lenders, saving their clients loads of work. There are different types of brokers, whom you can approach depending on the kind of work you are planning to get done from them.

Mortgage broker:

A mortgage broker guides its clients through the entire process of choosing an appropriate mortgage package with attractive package offers. They are apt at finding their client the most suitable mortgage package that suits their necessities well and help them in obtaining and filling up their mortgage form. In the US, mortgage brokers affect more than 80% of the total home loans issued. Even banks prefer to go through brokers and often outsource the work of identifying and qualifying borrowers.

Real estate broker:

A real estate broker is in the business of finding buyers for those who want to sell their real estate properties. They are in this business to help their clients sell their properties at the highest possible process. If they have a buyer as their client, then they help him to buy a suitable property at the most reasonable price. Once the transaction is through, the brokers get a certain percentage of the transaction value as their commission. In the US, such a commission is generally 6% in case of real estate property mortgage and is usually paid by the seller. The commission amount is split equally between the selling and the listing agent.

Forex broker:

Forex brokers are either individuals of firms who assist both individuals and firms to trade effectively in the foreign exchange marketplace. These brokers earn through pip or “spread”. Spread refers to the minimum price hike in currency. For example, in Euro/US Dollar, a shift to 0.9008 from 0.9007 is calculated as a spread, whereas in US Dollar/Japanese Yen, shift to 127.41 from 127.40 is a spread.

Stockbroker:

Stockbrokers are individuals or companies engaged in buying and selling stocks on behalf of either a person or a company and try to match up the buyers with sellers. Investors pay stockbrokers to seek advice from them regarding investment decisions and finance management. These brokers also give knowledgeable guidance to their high- net worth individual clients for managing their finances well and investing in portfolios for considerable wealth creation.

Insurance broker:

Like other brokers, an insurances broker is also in such for buyers, but for insurance of multiple things including life, car, accident, calamity etc. Such a broker assists its customers in choosing the best insurance program suiting their needs.

If you are an investor on look out for the best investment avenues, then a broker is the best person you can approach for suitable investment guidance. Author Resource:- William King is the director of Canadian Wholesalers and Dropshippers Dropshipping Directory: http://www.wholesale-canada.com , UK Wholesaler: http://www.uk-wholesaler.co.uk , Dubai & UAE Property & Real Estate Portal: http://www.bayut.com , Pakistan Property & Real Estate Portal: http://www.zameen.com . He has 18 years of experience in the marketing and trading industries and has been helping retailers, entrepreneurs and startups with their product sourcing, promotion, marketing and supply chain requirements.

Sexy Bodies and Strange Shadows

2007-09-26T06:10:00.000-07:00

Sexy Bodies Just like humans, candlesticks have different body sizes. And when it comes to forex trading, there’s nothing naughtier than checking out the bodies of candlesticks! Long bodies indicate strong buying or selling. The longer the body is, the more intense the buying or selling pressure. Short bodies imply very little buying or selling activity. In street forex lingo, bulls mean buyers and bears mean sellers.
Long white candlesticks show strong buying pressure. The longer the white candlestick, the further the close is above the open. This indicates that prices increased considerably from open to close and buyers were aggressive. In other words, the bulls are kicking the bears’ butts big time!
Long black (filled) candlesticks show strong selling pressure. The longer the black candlestick, the further the close is below the open. This indicates that prices fell a great deal from the open and sellers were aggressive. In other words, the bears were grabbing the bulls by their horns and body slamming them.

Mysterious Shadows
The upper and lower shadows on candlesticks provide important clues about the trading session.
Upper shadows signify the session high. Lower shadows signify the session low.
Candlesticks with long shadows show that trading action occurred well past the open and close.
Candlesticks with short shadows indicate that most of the trading action was confined near the open and close.

If a candlestick has a long upper shadow and short lower shadow, this means that buyers flexed their muscles and bided prices higher, but for one reason or another, sellers came in and drove prices back down to end the session back near its open price.
If a candlestick has a long lower shadow and short upper shadow, this means that sellers flashed their washboard abs and forced price lower, but for one reason or another, buyers came in and drove prices back up to end the session back near its open price. learn more

What is a Candlestick?

2007-09-26T05:55:00.000-07:00

While we briefly covered candlestick charts in the previous lesson, we’ll now dig in a little and discuss them more in detail. First let’s do a quick review. What is a Candlestick? Back in the day when Godzilla was still a cute little lizard, the Japanese created their own old school version of technical analysis to trade rice. A westerner by the name of Steve Nison “discovered” this secret technique on how to read charts from a fellow Japanese broker and Japanese candlesticks lived happily ever after. Steve researched, studied, lived, breathed, ate candlesticks, began writing about it and slowly grew in popularity in 90s. To make a long story short, without Steve Nison, candle charts might have remained a buried secret. Steve Nison is Mr. Candlestick. Okay so what the heck are candlesticks? The best way to explain is by using a picture:

Candlesticks are formed using the open, high, low and close.
If the close is above the open, then a hollow candlestick (usually displayed as white) is drawn.
If the close is below the open, then a filled candlestick (usually displayed as black) is drawn.
The hollow or filled section of the candlestick is called the “real body” or body.
The thin lines poking above and below the body display the high/low range and are called shadows.
The top of the upper shadow is the “high”.
The bottom of the lower shadow is the “low” learn more

Types of Trading

2007-09-26T03:09:00.000-07:00

Congratulations! You’ve gotten through the Pre-School and are ready to begin your first day of class. You did go through the Pre-School right? By now you’ve learned some history about the Forex, how it works, what affects the prices, blah blah blah.
We know what you’re thinking…BORING! SHOW ME HOW TO MAKE MONEY ALREADY!
Well, say no more my friend; because here is where your journey as a Forex trader begins…

This is your last chance to turn back… Take the red pill, and we take you back to where you were and you will forget all about this. You can go back to living your average life in your 9-5 job and work for someone else for the rest of your life.

OR
You can take the green pill (green for money! Yeah!) And learn how you can make money for yourself in the most active market in the world, simply by using a little brain power. Just remember, your education will never stop. Even after you graduate from BabyPips.com, you must constantly pursue as much knowledge as you can, so that you can become a true FOREX MASTER! Now pop that green pill in, wash it down with some chocolate milk, and grab your lunchbox…School of Pipsology is now in session!
Note: the green pill was made with a brainwashing serum. You will now obey everything that we tell you to do! Mwuahahaha! <--evil laugh-- >
Learn more

Would You Like Fries with Your Pips?

2007-09-26T02:34:00.000-07:00

The term "order" refers to how you will enter or exit a trade. Here we discuss the different types of orders that can be placed into the foreign exchange market. Be sure that you know which types of orders your broker accepts. Different brokers accept different types of orders.
Order Types

Basic Order Types
There are some basic order types that all brokers provide and some others that sound weird. The basic ones are:

Market order
A market order is an order to buy or sell at the current market price. For example, EUR/USD is currently trading at 1.2140. If you wanted to buy at this exact price, you would click buy and your trading platform would instantly execute a buy order at that exact price. If you ever shop on Amazon.com, it's (kinda) like using their 1-Click ordering. You like the current price, you click once and it's yours! The only difference is you are buying or selling one currency against another currency instead of buying Britney Spears CDs.

Limit order
A limit order is an order placed to buy or sell at a certain price. The order essentially contains two variables, price and duration. For example, EUR/USD is currently trading at 1.2050. You want to go long if the price reaches 1.2070. You can either sit in front of your monitor and wait for it to hit 1.2070 (at which point you would click a buy market order), or you can set a buy limit order at 1.2070 (then you could walk away from your computer to attend your ballroom dancing class). If the price goes up to 1.2070, your trading platform will automatically execute a buy order at that exact price. You specify the price at which you wish to buy/sell a certain currency pair and also specify how long you want the order to remain active (GTC or GFD).

Stop-loss order
A stop-loss order is a limit order linked to an open trade for the purpose of preventing additional losses if price goes against you. A stop-loss order remains in effect until the position is liquidated or you cancel the stop-loss order. For example, you went long (buy) EUR/USD at 1.2230. To limit your maximum loss, you set a stop-loss order at 1.2200. This means if you were dead wrong and EUR/USD drops to 1.2200 instead of moving up, your trading platform would automatically execute a sell order at 1.2200 and close out your position for a 30 pip loss (eww!). Stop-losses are extremely useful if you don't want to sit in front of your monitor all day worried that you will lose all your money. You can simply set a stop-loss order on any open positions so you won't miss your basket weaving class.learn more

Support and Resistance

2007-09-21T09:05:00.000-07:00

Support and resistance is one of the most widely used concepts in trading. Strangely enough, everyone seems to have their own idea on how you should measure support and resistance.
Let’s just take a look at the basics first.

Look at the diagram above. As you can see, this 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.
As the market continues up again, the lowest point reached before it started back is now support. In this way resistance and support are continually formed as the market oscillates over time. The reverse of course is true of the downtrend.

learn more

Know Your P’s and L’s

2007-09-20T04:35:00.000-07:00

Here is where we’re going to do a little math. You've probably heard of the terms "pips" and "lots" thrown around, and here we're going to explain what they are and show you how they are calculated.

Take your time with this information, as it is required knowledge for all Forex traders. Don’t even think about trading until you are comfortable with pip values and calculating profit and loss.
What the heck is a Pip?

The most common increment of currencies is the Pip. If the EUR/USD moves from 1.2250 to 1.2251, that is ONE PIP. A pip is the last decimal place of a quotation. The Pip is how you measure your profit or loss.

As each currency has its own value, it is necessary to calculate the value of a pip for that particular currency. In currencies where the US Dollar is quoted first, the calculation would be as follows.

Let’s take USD/JPY rate at 119.80 (notice this currency pair only goes to two decimal places, most of the other currencies have four decimal places)

In the case of USD/JPY, 1 pip would be .01

Therefore,

USD/JPY:

119.80
.01 divided by exchange rate = pip value
.01 / 119.80 = 0.0000834

This looks like a very long number but later we will discuss lot size.

USD/CHF:

1.5250
.0001 divided by exchange rate = pip value
.0001 / 1.5250 = 0.0000655

USD/CAD:

1.4890
.0001 divided by exchange rate = pip value
.0001 / 1.4890 = 0.00006715

In the case where the US Dollar is not quoted first and we want to get the US Dollar value, we have to add one more step.

EUR/USD:

1.2200

.0001 divided by exchange rate = pip value
so
.0001 / 1.2200 = EUR 0.00008196

but we need to get back to US dollars so we add another calculation which is

EUR x Exchange rate
So
0.00008196 x 1.2200 = 0.00009999

When rounded up it would be 0.0001

GBP/USD:

1.7975

.0001 divided by exchange rate = pip value
So
.0001 / 1.7975 = GBP 0.0000556

But we need to get back to US dollars so we add another calculation which is

GBP x Exchange rate

So
0.0000556 x 1.7975 = 0.0000998

When rounded up it would be 0.0001

You’re probably rolling your eyes back and thinking do I really need to work all this out and the answer is NO. Nearly all forex brokers will work all this out for you automatically. It’s always good for you to know how they work it out. learn more

How You Make Money Trading Forex

2007-09-19T11:25:00.000-07:00

In the FX market, you buy or sell currencies. Placing a trade in the foreign exchange market is simple: the mechanics of a trade are very similar to those found in other markets (like the stock market), so if you have any experience in trading, you should be able to pick it up pretty quickly.

The object of Forex trading is to exchange one currency for another in the expectation that the price will change, so that the currency you bought will increase in value compared to the one you sold. learn more

What is forex ?

2007-09-19T06:17:00.000-07:00

What is FOREX ?
The Foreign Exchange market, also referred to as the "FOREX" or "Forex" or "Retail forex" or “FX” or "Spot FX" or just "Spot" is the largest financial market in the world, with a volume of about $2 trillion a day. If you compare that to the $25 billion a day volume that the New York Stock Exchange trades, you can easily see how enormous the Foreign Exchange really is. It actually equates to more than three times the total amount of the stocks and futures markets combined! Forex rocks!

What is traded on the Foreign Exchange?
The simple answer is money. Forex trading is the simultaneous buying of one currency and the selling of another. Currencies are traded through a broker or dealer, and are traded in pairs; for example the Euro dollar and the US dollar (EUR/USD) or the British pound and the Japanese Yen (GBP/JPY).

Because you're not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy. learn more

Secret Recipe for the Ultimate Business

2007-09-18T12:57:00.000-07:00

Here are the SECRET ingredients needed to create the ultimate business:
You
Computer
Internet connection
Desk (or sofa)
That’s it! No employees. No advertising. No cold calling. No inventory.

Imagine a business with just you, your computer, and a high-speed Internet connection?! That’s all you need trade in the foreign exchange market!! In other words... learn more