involvement with forex
Wednesday, May 30, 2007
Go to a dinner party and mention your involvement with forex? and you’re likely to get a few baffled looks. Most people don’t have a clue what forex is or how it works. Worst of all, neither do most beginning forex? traders. Understanding what makes these markets tick is a good step towards a successful trading record.
Q: What are pairs and pips?
A: Each currency exists in the marketplace not on its own, but as a “cross” between itself and another currency. This is practical, since when you travel to Europe you want to exchange your money for Euros. If you have US Dollars, you will be exchanging money at the rate set by EURUSD. EURUSD is a “pair”. It also happens to be the most popular pair.
Most currencies are paired with EUR and USD, and to other currencies to a lesser extent. The “four majors” are EURUSD (Euro/Dollar), USDJPY (Dollar/Yen), GBPUSD (Pound/Dollar), and USDCHF (Dollar/Franc). The bid-ask spread is usually lowest for the four majors, since their volume is the highest. With high volume the dealer is usually assured of having ample liquidity to meet your trading needs, so they charge you less through the spread.
For more obscure, less traded pairs, the spread will be more, since dealers assume more risk in completing those transactions. The spread itself is made up of pips. A pip is simply an incremental unit in forex. In stocks, you call them ticks or points. That makes sense because usually all stocks are quoted in the same currency. In forex, each currency may have a different incremental unit. For example, a quote in EURUSD might be 1.3240, versus a quote in USDJPY at 107.87. What is the incremental unit? There is no common unit, so one was created, and it was named a pip. A pip is always worth $10 if the pair ends in USD. If not, you will need to refer to a pip calculator to get the value, since these per pip values can vary, even within the same currency.
Q: How do you trade forex?
A: There are two major methods for trading forex: fundamental and technical. Fundamental analysis relies upon a broad and near-expert understanding of multi-national macroeconomic statistics and events. Fundamental traders believe that the value of a pair is determined by the underlying health of the two nations involved in the pair. A high value for GBPUSD, for example, would suggest a better economic outlook in Britain vis-à-vis the United States. Global events like news, catastrophes, politics or economic shocks all play a role in determining price. Technical analysis is based on the mathematical analysis of price, and of many variables which all derive from price. Technical traders believe that technical indicators include fundamental analysis and also provide repeatable, tradable patterns. Technical traders use charts to determine support and resistance, draw trend lines, or analyze measures like moving averages, etc. Whichever camp you belong to determines your trading approach. A fundamental trader may take the Warren Buffet approach and buy-and-hold a pair, expecting long term returns. A technical trader may play long term as well, but usually day trades. Some fundamental traders trade on news, which may just be certain days of the month.
Q: What is leverage?
A: Since dealers have ultimate control over accounts and trades, they are willing to loan money to the trader. That’s called margin – basically a loan from the dealer to the trader, but based on the trader’s equity. Normally if the trader wants to trade EURUSD he would need $100K, but not if the dealer offers margin. Margin is another word for leverage, with a little difference in concept. Some dealers will allow you to trade a full standard contract with just $500 in margin available. That means the user has to have at least $500 (or really $500 + spread) in their account to trade. If at any time their account balance equals or drops below their margin requirement, the dealer will liquidate all of their positions. That’s called a Margin Call. So if you traded 5 contracts with $4,000 in your account, you would be using $2500 in margin. If the trade went against you $1500, you would be taken out. When you traded the one contract with $500 in margin, you controlled $100,000. That’s leverage. It’s 200:1 in this case (leverage = $100,000 divided by $ per contract as a % of total equity). In this example, you would only be employing 200:1 leverage if your account equity was $500. Most dealers have scaling margin which allows smaller accounts to use something like 200:1 and bigger accounts to use 50:1, or 10:1. If you had $20K in your account and played 40 contracts, that would be 200:1 leverage. $100K with 10 contracts is 10:1. Leverage is one of the biggest reasons people trade forex?, but it’s also one of the biggest reasons people lose money. Be careful to manage your leverage position when trading, especially when starting out.
Labels: Forex Tips
posted by inlink5 @ 4:07 PM,
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Super Divergence Blueprint
Saturday, May 19, 2007
I have seen a new trading video that reveals a trading method you may
never have heard of before. And, if you're familiar with this
method, you're probably not using it like this experienced
trader is...
You can access it immediately here:
This quick video drills right down to a recent trade of Harley
Davidson (symbol: HOG), and shows how in just 2.5 weeks, a very
profitable trade was extracted from the market using a
"countertrend" trading method that most traders completely miss.
That's why, if you know how to find these countertrend trades,
you'll have a huge edge over other traders.
The top 3 reasons most traders miss these types of trades are:
1. They don't know a countertrend method even exists.
2. They use divergence patterns that are too 'loose' or general.
3. They spend way too much time searching for these patterns.
The good news is that traders who use the method used in this
video have a quick and easy solution to address those Top 3
problems.
Discover it here:
Enjoy this video, and have the chance to add this
countertrend trading method to your trading arsenal.
Labels: Forex Tips
posted by inlink5 @ 8:57 AM,
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Bird Watching in Lion Country
Friday, May 04, 2007
Retail Price : $ 69.90 USOur Price :$ 29.90 US
For hardcopy , click here.
( email me after you click to purchase, i will email you the copy )
The difference between winners and losers is a way of seeing, but it is a complex and sophisticated way of seeing which requires an understanding of the relationship between a number of factors. It is a form of market analysis called relational analysis which relates the key elements of price, event and time.
If you've already trading or are just considering becoming a forex trader, do yourself a favour and get Bird Watching in Lion Country by Dirk du Toit. Read it more than once. Study the principles and follow Dirk's advice before you even think of going 'live'. You will have a better chance of recovering both the outlay and your trading losses. Given time and experience and adding (but not relying on!) a bit of luck, you will start to make a profit like the select few – possibly ten percent of all – forex traders. There's an old saying: Forewarned is forearmed. It definitely applies to forex trading.
It shows you, step by step how to make money, and what to avoid. Do you understand the difference between ‘market wizards’ and ‘marketing wizards’ – the people that make the money and the people that take the money? If not, you are probably in trouble. This book will tell you why you need to know the difference, and how to benefit from this knowledge.
Here are a quick list of only some of the chapters in this excellent 225 page book:
1) Pre-Trading Edges
2) Trading Edges
3) The 4x1 Trading strategy
4) Median Trading
5) Relational Analysis
6) Risk Management
If you really want to increase your odds as a trader and get an edge on the Forex market then we highly recommend Bird Watching in Lion Country.
Our Price :$ 29.90 US
To order your own copy of Bird Watching in Lion Country, click button below !
Labels: ebook
posted by inlink5 @ 8:48 AM,
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Forex Trading Machine
Thursday, May 03, 2007
Forex Trading Machine? Warning: Read before you purchase.
Does it work? Read on.......
Are you frustrated by the thousands of Forex trading guide out there that did not deliver as promise? You are not alone.
Forex Trading is by far the world's most rewarding 'career' only if you have mastered the techniques correctly. If you followed 99% of the traders' technique, you are unlikely to succeed. You need unique, innovative and revolutionary strategy that can help you relate to how the market behaves and spot market trend way ahead of others.
So how does Forex Trading Machine fare? At first glance, I nearly discard Forex Trading Machine as another useless get-rich guide. However, I'm glad I didn't. Forex Trading Machine is by far the most diverse and effective Forex training lessons I have come across. With its 3 explosive strategies, you can attack the forex market from every angle and take advantage of different opportunities presented and much much more...
In just less than a month's time of studying, I made my first $1500 and since then I have consistently earn a considerable amount using Avi Frister's unique strategies.
At just $97 (promotion price only), Ari Frister is really insane to charge you so little for revealing so much of his revolutionary strategies. He should have charged at least $1000 for this brilliant product..... I had easily recouped my initial investment 10 folds in just one trade. Considering the enormous success of this product, its just a matter of time he will raise the price anytime soon.....
My only regret? I should have my hands on Forex Trading Machine much much earlier!
Enough of my review.....You have to try it out yourself to know what I mean....Opportunity don't wait...
What you will master from Avi Frister's Forex Trading Machine :
1) How to consistently and systematically earn profits of at least $300 per trade around the clock!
2) Learn how to significantly lower your risk by using a time tested strategy that banks and financial institutions use every day.
3) 3 simple, easy-to-follow trading strategies that's guaranteed to work whether you're a beginner, swing trader, day trader or veteran!
4) How to identify trades trend before the market starts to move.
5) How to be in the Top Elite 1% group of successful traders.
Most importantly, how you can quit your day job and become incredibly wealthy with this system! And, much, much MORE...
Labels: Forex Tips
posted by inlink5 @ 8:11 AM,
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