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Monday, October 16, 2017
WISHING YOU HAPPY DIWALI!
Happy Diwali! Wishing You A Year Rich With Prosperity, Wisdom, Light, and Love!
Friday, September 29, 2017
We provide you the best forex signals for your trading experience! How can you possibly fail?
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Monday, May 29, 2017
Demo Trade Your Way to Success
You can open a demo accounts for FREE with most forex brokers.
These “pretend” accounts have the full capabilities of a “real” account.
But why is it free?
It’s because the broker wants you to learn the ins and outs of
their trading platform, and have a good time trading without risk, so you’ll
fall in love with them and deposit real money. The demo account allows you to
learn about the forex market and test your trading skills with ZERO risk.
Yes, that’s right, ZERO!
YOU SHOULD DEMO TRADE UNTIL YOU DEVELOP A SOLID, PROFITABLE
SYSTEM BEFORE YOU EVEN THINK ABOUT PUTTING REAL MONEY ON THE LINE.
WE REPEAT – YOU SHOULD DEMO TRADE UNTIL YOU DEVELOP A SOLID,
PROFITABLE SYSTEM BEFORE YOU EVEN THINK ABOUT PUTTING REAL MONEY ON THE LINE.
“Don’t Lose Your Money” Declaration
Now, place your hand on your heart and say…
“I will demo trade until I develop a solid,
profitable system before I trade with real money.”
Now touch your head with your index finger and say…
“I am a smart and patient forex trader!”
Do NOT open a live trading account until you
are CONSISTENTLY trading PROFITABLY on a demo account.
If you can’t wait until you’re profitable on a demo account,
then there’s no chance you’ll be profitable live when real money and emotions
are factored in. At least demo trade for two months, and at least
you were able to hold off losing all your money for two months right? If you
can’t hold out for two months, just donate that money to your favorite charity
or give it to your momma…show her you still care.
Concentrate on ONE major currency pair.
It gets far too complicated to keep tabs on more than one
currency pair when you first start demo trading. Stick with one of the majors
because they are the most liquid which usually means tighter spreads and less
chance of slippage. Plus, in the beginning you need time to focus on
improving your trading processes and creating good habits.
You can be a winner at currency trading, but as with all other
aspects of life, it will take hard work, dedication, a little luck, and a whole
lot of patience and good judgment.
#Forex #Trading
Sunday, May 28, 2017
Friday, May 26, 2017
Types of Forex Orders
The term “order” refers to how you will enter or exit a trade.
Here we discuss the different types of forex orders that can be placed into the
forex market.
Be sure that you know which types of orders your broker accepts.
Different brokers accept different types of forex orders.
There are some basic order types that all brokers provide and
some others that sound weird.
Forex Order Types
Market order
A market order is an order to buy or sell at the best available
price.
For example, the bid price for EUR/USD is currently at 1.2140
and the ask price is at 1.2142. If you wanted to buy EUR/USD at market, then it
would be sold to you at the ask price of 1.2142. 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 a Justin Bieber CD.
Limit Entry Order
A limit entry is an order placed to either buy below the market or sell above the market at a certain price.
For example, EUR/USD is currently trading at 1.2050. You want to
go short 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 sell
market order), or you can set a sell 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 sell order at the best available price.
You use this type of entry order when you believe price will
reverse upon hitting the price you specified!
Stop-Entry Order
A stop-entry order is an order placed to buy above the market or
sell below the market at a certain price.
For example, GBP/USD is currently trading at 1.5050 and is
heading upward. You believe that price will continue in this direction if it
hits 1.5060. You can do one of the following to play this belief: sit in front
of your computer and buy at market when it hits 1.5060 OR set a stop-entry
order at 1.5060. You use stop-entry orders when you feel that price will move
in one direction!
Stop-Loss Order
A stop-loss order is a type of order linked to a trade for the
purpose of preventing additional losses if price goes against you. REMEMBER THIS TYPE OF ORDER. 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 the best available
price 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 or elephant polo game.
Trailing Stop
A trailing stop is a type of stop-loss order attached to a trade
that moves as price fluctuates.
Let’s say that you’ve decided to short USD/JPY at 90.80, with a
trailing stop of 20 pips. This means that originally, your stop loss is at
91.00. If the price goes down and hits 90.60, your trailing stop would move
down to 90.80 (or breakeven).
Just remember though, that your stop will STAY at this new price
level. It will not widen if market goes higher against you. Going back to the
example, with a trailing stop of 20 pips, if USD/JPY hits 90.40, then your stop
would move to 90.60 (or lock in 20 pips profit).
Your trade will remain open as long as price does not move
against you by 20 pips. Once the market price hits your trailing stop price, a market order to close your position at the best
available price will be sent and your position will be closed.
Weird Forex Orders
“Can I order a Grande extra hot soy with extra foam, extra hot
split quad shot with a half squirt of sugar-free white chocolate and a half
squirt of sugar-free cinnamon, a half packet of Splenda and put that in a Venti
cup and fill up the “room” with extra whipped cream with caramel and chocolate
sauce drizzled on top?”
Ooops, wrong weird order.
Good ‘Till Cancelled (GTC)
A GTC order remains active in the market until you decide to
cancel it. Your broker will not cancel the order at any time. Therefore, it
is your responsibility to remember that you have the
order scheduled.
Good for the Day (GFD)
A GFD order remains active in the market until the end of the
trading day. Because foreign exchange is a 24-hour market, this usually means
5:00 pm EST since that’s the time U.S. markets close, but we’d recommend you
double check with your broker.
One-Cancels-the-Other
(OCO)
An OCO order is a mixture of two entry and/or stop-loss orders.
Two orders with price and duration variables are placed above and below the
current price. When one of the orders is executed the other order is canceled.
Let’s say the price of EUR/USD is
1.2040. You want to either buy at 1.2095 over the resistance level in
anticipation of a breakout or initiate a selling position if the price falls
below 1.1985. The understanding is that if 1.2095 is reached, your buy order
will be triggered and the 1.1985 sell order will be automatically canceled.
One-Triggers-the-Other
An OTO is the opposite of the OCO, as it only puts on orders
when the parent order is triggered. You set an OTO order when you want to set
profit taking and stop loss levels ahead of time, even before you get in a
trade.
For example, USD/CHF is
currently trading at 1.2000. You believe that once it hits 1.2100, it will
reverse and head downwards but only up to 1.1900. The problem is that you will
be gone for an entire week because you have to join a basket weaving
competition at the top of Mt. Fuji where
there is no internet.
In order to catch the move while you are away, you set a sell
limit at 1.2000 and at the same time, place a related buy limit at 1.1900, and
just in case, place a stop-loss at 1.2100. As an OTO, both the buy limit and
the stop-loss orders will only be placed if your initial sell order at 1.2000
gets triggered.
In conclusion…
The basic forex order types (market, limit entry, stop-entry,
stop loss, and trailing stop) are usually all that most traders ever need.
Unless you are a veteran trader (don’t worry, with practice and
time you will be), don’t get fancy and design a system of trading requiring a
large number of forex orders sandwiched in the market at all times.
Stick with the basic stuff first.
Make sure you fully understand and are comfortable with your
broker’s order entry system before executing a trade.
Also, always check with your broker for specific order
information and to see if any rollover fees will be applied if a position is
held longer than one day. Keeping your ordering rules simple is the best
strategy.
DO NOT trade with real
money until you have an extremely high comfort level with the trading platform
you are using and its order entry system. Erroneous trades are more common than
you think!
#Forex #Trading
Thursday, May 25, 2017
Impress Your Date with Forex Lingo
As in any new skill that you learn, you need to learn the lingo…
especially if you wish to win your love’s heart. You, the newbie, must know
certain terms like the back of your hand before making your first trade. Some
of these terms you’ve already learned, but it never hurts to do a little
review.
Major and Minor Currencies
The eight most frequently traded currencies (USD, EUR, JPY, GBP,
CHF, CAD, NZD, and AUD) are called the major currencies or the “majors.” These
are the most liquid and the most sexy. All other currencies are referred to as
minor currencies.
Base Currency
The base currency is the first currency in any currency pair.
The currency quote shows how much the base currency is worth as measured
against the second currency. For example, if the USD/CHF rate equals 1.6350,
then one USD is worth CHF 1.6350.
In the forex market, the U.S. dollar is normally considered the
“base” currency for quotes, meaning that quotes are expressed as a unit of 1
USD per the other currency quoted in the pair. The primary exceptions to this
rule are the British pound, the euro, and the Australian and New Zealand
dollar.
Quote Currency
The quote currency is the second currency in any currency pair.
This is frequently called the pip currency and any unrealized profit or loss is
expressed in this currency.
Pip
A pip is the smallest unit of price for any currency. Nearly all
currency pairs consist of five significant digits and most pairs have the
decimal point immediately after the first digit, that is, EUR/USD equals
1.2538. In this instance, a single pip equals the smallest change in the fourth
decimal place – that is, 0.0001. Therefore, if the quote currency in any pair
is USD, then one pip always equal 1/100 of a cent.
Notable exceptions are pairs that include the Japanese yen where
a pip equals 0.01.
Pipette
One-tenth of a pip. Some brokers quote fractional pips, or
pipettes, for added precision in quoting rates. For example, if EUR/USD moved
from 1.32156 to 1.32158, it moved 2 pipettes.
Bid Price
The bid is the price at which the market is prepared to buy a specific
currency pair in the forex market. At this price, the trader can sell the base
currency. It is shown on the left side of the quotation.
For example, in the quote GBP/USD 1.8812/15, the bid price is
1.8812. This means you sell one British pound for 1.8812 U.S. dollars.
Ask/Offer Price
The ask/offer is the price at which the market is prepared to
sell a specific currency pair in the forex market. At this price, you can buy
the base currency. It is shown on the right side of the quotation.
For example, in the quote EUR/USD 1.2812/15, the ask price is
1.2815. This means you can buy one euro for 1.2815 U.S. dollars. The ask price
is also called the offer price.
Bid/Ask Spread
The spread is the difference between the bid and ask
price. The “big figure quote” is the dealer expression referring to the first
few digits of an exchange rate. These digits are often omitted in dealer
quotes. For example, the USD/JPY rate might be 118.30/118.34, but would be
quoted verbally without the first three digits as “30/34.” In this example,
USD/JPY has a 4-pip spread.
Quote Convention
Exchange rates in the forex market are expressed using the
following format:
Base currency / Quote currency = Bid / Ask
Transaction Cost
The critical characteristic of the bid/ask spread is that it is
also the transaction cost for a round-turn trade. Round-turn means a buy (or
sell) trade and an offsetting sell (or buy) trade of the same size in the same
currency pair. For example, in the case of the EUR/USD rate of 1.2812/15, the
transaction cost is three pips.
The formula for calculating the transaction cost is:
Transaction cost (spread) = Ask Price – Bid Price
Cross Currency
A cross
currency is any pair in which neither currency is the U.S.
dollar. These pairs exhibit erratic price behavior since the trader has, in
effect, initiated two USD trades. For example, initiating a long (buy) EUR/GBP
is equivalent to buying a EUR/USD currency pair and selling GBP/USD. Cross
currency pairs frequently carry a higher transaction cost.
Margin
When you open a new margin account with a forex broker, you must
deposit a minimum amount with that broker. This minimum varies from broker to
broker and can be as low as $100 to as high as $100,000.
Each time you execute a new trade, a certain percentage of the
account balance in the margin account will be set aside as the initial margin
requirement for the new trade based upon the underlying currency pair, its
current price, and the number of units (or lots) traded. The lot size always
refers to the base currency.
For example, let’s say you open a mini account which provides a
200:1 leverage or 0.5% margin. Mini accounts trade mini lots. Let’s say one
mini lot equals $10,000. If you were to open one mini-lot, instead of having to
provide the full $10,000, you would only need $50 ($10,000 x 0.5% = $50).
Leverage
Leverage is the ratio of the amount capital used in a
transaction to the required security deposit (margin). It is the ability to control
large dollar amounts of a security with a relatively small amount of capital.
Leveraging varies dramatically with different brokers, ranging from 2:1 to
500:1.
Now that you’ve impressed your dates with your forex lingo, how
about showing her the different types of trade orders?
#Trading #Forex
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