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Fx Trading Systems – Basics on the Forex Trading System

March 23, 2011 By admin Leave a Comment

Fx Trading Systems

Forex or moreover famed as the intercontinental cash exchange is the trading of currencies by two unusual parties. The method mainly centralizes on trading where exchanges of multitude of currencies are completed between two parties from anywhere in the planet based on current economical superiority and also other varying factors. If you are new to the forex market and want to learn more in regards to it, read on underneath and you’ll swiftly suffer a new insight on the foreign exchange market. Fx Trading Systems

The forex trading system was first introduced to help promote international trading and investments by all types of organizations and governments across the globe. It certainly is highly risky and the money put into this investment is close to a few trillion in trading value. The main understanding you should have on this market and one of the simplest would be that its main objective is to help companies and businesses to convert one currency to another with profit. Fx Trading Systems

So why is forex different to changing money through an authorized money changer for example? If you’re wondering that, the reason is due to certain advantages in using the forex system where one would be trading currencies without a significant movement in price and also minimum loss of value. Fx Trading Systems

Besides that, forex trading is available 24 hours a day except on weekends and there are also a variety of factors that one could take into account that might influence the exchange rate when trading currencies. This may allow a corporate institution or a governmental organization to earn profit through the exchange of currencies. The forex trading system is totally different than the stock market as it divides its investors into different levels of access. Fx Trading Systems

On top of the hierarchy would be the world’s banks where currency trading would reach a high and also at times produce an extremely high profit. The volume traded here is also exceptionally high where prices can range up to a few trillion dollars. Stop what you are doing RIGHT NOW and get your Life Changing Fx Trading Systems Program. It’ll change your Life Forever!

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How to make money on the foreign exchange market

March 22, 2011 By admin Leave a Comment

Forex and ‘FX’ are shortened terms used for ‘foreign exchange’.  Foreign exchange is the exchange of money from different countries. The value of one country’s currency is constantly changing against the value of another country’s currency. Forex traders make money through buying and selling currencies on the foreign exchange market. And it really is that simple, how cool is that? And it can all be done, right there, where your sat now!

As you may know, the value of currency fluctuates. The value of the pound is always increasing and decreasing. This is why so many people decide to buy foreign money.

Here is the interesting part, If the pound is decreasing, guess what will happen if you invest in a currency that is either decreasing in value at a slower rate than the pound, increasing in value or is more stable?? The amount of pounds that you can buy back will increase. It’s this type of fluctuation in value that gives so many traders on Easy-Forex the opportunity to make huge profits.

Now, the real great thing about this website is that you can learn all you need to know in order to start making profitable investments right there on the website. And this is the real reason why people make a fortune with Easy-Forex, because you can just spend a small amount of your day, or your week, learning how to successfully buy and sell currency for profit. I know why I do it, and I know why hundreds of people will think ‘’I will do it too”. I bet my right arm that you can make huge profits right there, where you are sat now. Visit Easy-Forex and BOOKMARK THE PAGE. When you get there, HAVE A LOOK IN THE LEARNING SECTION, and finally when you feel ready to make money in the foreign exchange market, Join Easy-Forex, have a go and make money.

Thanks for reading. Have fun and enjoy learning.

 

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Foreign Exchange Market – How Important Is It To Know The Forex Market Well Before Trading?

March 21, 2011 By admin Leave a Comment

Before you even think of diving your way in on the foreign exchange trading business, don’t you think it is much better for you to first know the business well inside and out?

When you say forex trading, it actually refers to the entire industry of buying and selling currencies that are owned by various nations around the world. It is therefore right to conclude that forex trading is a worldwide transaction operating across different nations around the globe. In fact, the entire forex market is said to have a direct co-relation in regards to the economy of any given country.

Dating several years back, the foreign exchange trading industry is not as huge as it has now become. However, with the abrupt advancement of technology, particularly in the computer and internet arena, forex trading became virtually accessible to almost everyone and the explosion of the trading industry in terms of popularity just couldn’t be contained any longer. Because of this phenomenal event, anyone who has access to the internet can now register his or her own account online, and then start trading currencies right away.

However, although this trading business is easily accessible online and is virtually open to almost anyone, it is still considered by many investors as a risky kind of business to get involved with. And because of the highly volatile nature of the market, sudden emotions of excitement among its players cannot be avoided. This is also the reason why many people eventually become totally addicted to it.

So, if you are another one of the many individuals who are highly attracted to this form of investing in the hopes of making profits, you need to make sure that you have ample knowledge about the entire business first before plunging your way into it, lest it can easily devour all of your assets in one sitting without you even getting the chance to notice it. Take that statement as a clear warning on how risky this currency trading business indeed can be for the inexperienced individual.

The primary step you would want to put your focus on is to first have a clear understanding about the currency exchange rates. In forex trading, the usual trading transaction always involves two different currencies where one currency is traded in exchange for another. The exchange rate will be determined during the occurring trading transaction process.

The currencies from the most dominant countries in terms of economy are the favorites among traders. Such countries usually include the US, UK, Japan, and other nations that are considered to be most advanced from the rest of the world.

Clearly, by knowing more facts about the foreign exchange market, its behavior and how it operates, you will stand a better chance against other traders in terms of really making profits out of your trade investments.

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FXCM Strategy Trader ? Automated Forex Trading Software

March 20, 2011 By admin Leave a Comment

Automated Forex Trading is an extremely popular method of trading.  If you’re not a very experienced trader, starting with an Automated Forex Trading system is a great way to learn what actions triggers trades and why.

FXCM provides Automated Trading software called Strategy Trader.

What does Strategy Trader offer? You can trade with it alongside the FX Trading Station II. You have access to advanced back testing and optimization engine. It’s highly integrated into FXCM so is doesn’t have any bridges or synchronization. You have access to 3rd party data like Esignal and you’re able to trade multiple sub-accounts in one program (LAMM compatible).

All orders sit on FXCM servers. The orders placed on Strategy Trader can be seen on the FX Trading Station II.

If you’re familiar with trading MT4, FXCM’s Automated Forex Trading platform “Strategy Trader” is very similar and offers many unique proprietary features such as the preloaded EA’s.

Grid Trader

Grid Trader uses a limited martingale methodology, where each trade is the same lot size. At any one time, the maximum number of open trades is set to 10 by default. The strategy is designed to perform best with currency pairs or market conditions that are range bound. Price filters, like historical volatility, are used to help insure that the strategy is placing trades in market conditions that are more favorable for the strategy.

After Hours Trader

After Hours Trader is a trend reversal strategy, which attempts to capitalize on short-term overbought or oversold market conditions. The strategy is designed to trade the major currency pairs (EUR/USD, USD/JPY, GBP/USD, USD/CHF) during the Asian market hours, where the major pairs are typically ranging. This strategy uses a 28-bar RSI calculation compared to the more typical 14-bar calculation. The reason for this is to try to capture price action at its maximum exhaustion.

ST Breakout

ST Breakout is a breakout trading strategy, which attempts to anticipate price action that breaks through a previously defined support or resistance level. The strategy is designed to trade the GBP/JPY and USD/JPY currency pairs, as these pairs often have a high likelihood of volatility expansion. Such pairs are typically more likely to break through (breakout) defined support and resistance levels, while maintaining volatility, which often leads price action to continue in the direction of the breakout.

 

FXCM’s Automated Forex Trading system “Strategy Trader” is free. Sign up for a demo now.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice. DailyFX will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

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The Forex Market Draws Traders

March 19, 2011 By admin Leave a Comment

Millions of people are drawn to the Forex market, the biggest financial market on the globe. The Forex market its where it’s at when it comes to investing and currency trading and is one of the fastest growing investment forums to date. Although the Forex is called a “market”, it is not a traditional “market” as all trading is conducted over the telephone or via computers – there is no central location for the trading in any country. The Forex market is a cash inter-bank or inter-dealer system that was formed in 1971, at the time when floating exchange rates came about. Today the Forex is enormous with over 3.5 trillion levels exchanged each day, making it, without a doubt, one of the most popular forms of trading worldwide.

Availability

Perhaps the best feature of the Forex market is that it never closes. The Forex market is open all day long every day of the year. There are people in every country that are waiting to trade whether it is 2:00 in the afternoon or 2:00 in the morning. No matter where you are or what time it is, you can expect to find trading occurring in full force. The availability of the market makes it very appealing. Ultimately when dealing with foreign currency, the market must remain open for 24 hours due to time differences. As a result of this availability, traders are able to capitalize on the wide open trading times and eliminate the sense of anxiety as to what could be happening overnight in closed markets.

Excitement

The Forex, along with its never ending trading, is attractive to many traders because of the excitement it brings. Trading can be very exciting – the Forex offers never ending excitement for those willing to partake. With .5 to .5 trillion dollars per day, the Forex market has nearly perfect liquidity. The size alone makes this market a joy ride for traders. If you are looking for endless excitement, you will be glad to know that you can certainly find it in the Forex market. Unlike the other markets, the Forex is great because you can enjoy that excitement all day long. You won’t have to deal with the anxieties that occur with other markets after closing time. You can know that no matter what, the Forex will be open and you will be able to deal with business as needed. This adds a fun element to trading as removes the stress related to other markets.

Opportunity for Everyone

Previously the market has been only for the rich. Today however, the Forex is open to smaller scaled traders as well. Most of the traders are actually doing their business from home. Lower margin requirements are very attractive to smaller traders allowing them to participate with larger traders on the same scale, but from a more equal position. With the Internet thriving and continuing to grow each year, home based traders can now get in on the game with larger traders via their computer. It used to be that only large traders could access the Forex at any level. Today, the Forex is for everyone.

The Forex offers availability, excitement, and opportunity that draw millions of people to the market each day. Once you try it you won’t want to stop. The opportunities are endless, making the Forex a popular topic in today’s business schools. If you are interested in learning more about the Forex check with your local college to see if there are any classes offered on the subject. Before you start trading, you’ll need to be aware of the rules and regulations of the Forex market. Once you’re informed you can jump right in and start trading.

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Forex Trading ? Some Common Questions Answered

March 18, 2011 By admin Leave a Comment

Q. What is Pip?

Answer: PIP is an abbreviation for Percentage In Point. It is equal to 1/100 of 1 percent, or .0001. It is typical of forex trading to quote currency prices to the fourth decimal. For example, if the EUR/USD pair moves from 1.4410 to 1.4430 we say it has moved by 20 pips. And suppose if the EUR/USD goes up by 1%, we say it has gone up by 100 pips.

Q. What is a meant by forex spread?
Answer: The spread is the amount of pips between the bidding and the asking price. Forex brokers use spreads to make money on every forex trade placed through their network. The spread always stays around the actual price that the forex broker is paying. So when forex trading broker buys, he earns from one end of the spread and when Forex trading Broker sells he earns from the other end of it, and vice versa. By the time he closes the trade, he would have always paid the spread

Question: What are the best forex trading hours?
Answer: The best time to do trade trading in the forex markets is between 8:00 GMT and 16:00 GMT. The reason is that these are basically the hours of the London market where the last 5 hours are in overlap with the US market. This is the time when most traders, financial institutions, and banks are in the markets making their trades. It is widely accepted as the most potentially profitable time for forex trading..

Question: Is forex trading risky?
Answer: Forex trading can be an extremely risky proposition if you don’t use proper risk management strategies and dive into it uninformed with a view to make a quick buck. In fact Forex trading is considered to be one of the riskiest forms of investing one’s hard earned money because of the availability of leverage. Forex traders who are novice at the game can minimize the risks by learning, and implementing appropriate risk management techniques and developing a fool-proof forex trading plan. Some people might also claim that there is nothing called a Fool Proof Plan, which is partly true. The basic point to remember is that risk management strategies have to be in place to minimize risk.

Question: How much money does one need to get started in the forex market?
Answer: The amount of money that an aspiring investor will need to open an account depends on the type of broker you have chosen. While some brokers will allow you to open an account with as little as others that are slightly more expensive may require at least 0. Just in case you feel that are not yet ready to put in real money yet, you can always start with a demo account.

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Get the Right Forex Training to Trade Well in Forex Market

March 17, 2011 By admin Leave a Comment

Currency trading in forex is beneficial. It is because of the fact that the market is marked with possibilities and potentialities. However before landing in forex or opening a trading account, you should have a clear concept of what the forex market is all about, how to act here and when to remain silent? Questions of the same genre may be more but the answer to all questions is perhaps one i.e., sound forex training. Yes, a forex training is always beneficial for a trader before playing cards in forex market. A few more facts about forex trading are mentioned below:

There are two ways through which you can track your forex training program namely online way of forex training and traditional classroom method of forex training. Before having an insight into the latter one, let’s mull over the first i.e., online method. Well, online method of forex training is rapidly garnering popularity for the flexibilities it offers to user. Just a click and you can enter into the portal of world’s best online forex trainers. Many websites do offer free forex training program. These tutorials on forex are informative and filtered by experts of forex domain. Here you can even open a free demo account to explore how to trade in forex market without investing real money. Add to this, the online portals seek to inform users about every details occurring in the forex market every minute.

Traditional classroom method of forex training is also worthwhile. Here you get the chance of eye to eye chatting. You can reveal your queries better and get the answers precisely about the forex market and trading. Such forex training can be accessed from your local college campus or schools which are dedicated to currency exchange training program. You can even find books on forex training and forex market preferably from your local library. Opting for a traditional forex training classroom could be a good approach for a newcomer to get loaded with basics of forex market.

Both the methods of forex training are worth mentioning. However before selecting any of these two, make sure the training program suits all your needs. Check out whether it deals with basics and fundamentals of forex market, see whether it teaches you the risk control measures of currency exchange. A good forex training program should address the techniques to cut your losses while trading in forex market. You should also learn how to open and manage a forex trading account. Except course curriculum, you should also do a bit of research about the teacher. Find out the history, achievements and reputation of the training company you are opting for. If possible ask experts about a reputed forex training company. All such efforts will help you to go for the best and learn the secrets of a sound forex trading.

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Tactics to Make Money Off the Forex Market

March 16, 2011 By admin Leave a Comment

 

Trading The Forex Market can be a lucrative way to make money if you have a firm understanding of what you are doing. The Foreign Exchange Currency Market also known as FOREX, is one of the largest financial markets in the World, and the great thing about it is that it is not heavily regulated or controlled by any major institution, in turn allowing the ordinary person to make money off the market if they are properly educated. The market operates 24 hours, 6 days a week and is extremely liquid so it is well suited to intraday and swing traders who are looking to make quick profits in a short timeframe.

If you are new to the world of Forex Trading, then it is absolutely mandatory that you go through the process of learning the basic concepts and ins and outs of the market before you dive in and risk your own money. The best way to do this would be to educate yourself on some simple concepts by visiting a site like Baby Pips and to practice the strategies you have learnt on a demo account (which most brokers offer) without risking your own money. This will help you build confidence and also give you a taste of how the actual market functions. Once you have educated yourself and are fairly comfortable trading on a demo account then you should be ready to trade on a Real Live account, however make sure you are absolutely ready and don’t jump in too soon or you will be literally setting yourself up for disaster.

However the truth of the matter is that even after most new traders have educated themselves on how the Forex Market works, they still struggle to make money and eventually become part of the 90% of traders who lose money in the world of Forex. You see trading the Forex Market is not that simple, and to become profitable you must gain a competitive edge over the competition, and in order to do so you must be an expert or become one fast if you wish to succeed. Now becoming an expert in Forex is no easy task, you would have to create your own trading system and make sure it can bring in consistent profits; this can only be achieved with years of experience trading actual live markets, and in the mean time it can cost you a lot of money if you are not careful.

A smarter and more efficient way to make some money off the Forex Market would be to follow in the footsteps of the experts who have already figured out how the market works and developed their own profitable systems to trade the markets. These experts through their years of testing and experience in trading the markets have come with systems that are proven to generate consistent profits off the Forex Market in the long run, and the best part about them is that once they have been created they can be completely automated. The reason why Many new traders fail to make money in Forex is because they are overwhelmed by all the information available on the internet and don’t know how to get started and which system to use. Therefore if someone has found a formula for success and all you have to do is replicate that formula in order to make money, I think it seems pretty logical to follow the formula and reap the benefits.

These Formulas or recipes for profitably trading the Forex market are commonly known as Expert Advisors and they are designed to completely automate your Forex Trading decisions. Most new traders suffer from natural human emotions such as Fear, greed, and inconsistency when trading the markets and do not make decisions based on strict analysis or stick to their trading plan (that is if they have one). Now with an Expert Advisor, it has a programmed strategy and trading plan, and it will stick to that plan no matter what the market conditions are like, the system will not get greedy when you have to take profits nor will it go out and place a trade simply to chase losses. The top commercially available expert advisors are regularly tested on live accounts and are traded with by the creators of the system, hence it is fairly easy for you to check out their results and actually see first hand if the systems are consistently profitable and make money in the Forex Market.

What you must understand is that to make big profits In Forex, all you need to do is have a simple robust trading system; have confidence in it and the discipline to follow it. You could come up with your own trading system, or to speed things up, you could get your hands on a decent Forex Expert Advisor. The choice is yours but either way you must remain consistent and disciplined in order to succeed, so put your head down begin learning the basics, keep your eyes on the prize and you will eventually be on your way to making some easy money off the Forex Market.

 

It is no secret that in order to succeed in the world of Forex Trading You must follow a good trading system and adhere to strict money management techniques. An Expert Advisor can seriously simplify the process and get you well on your way. If you wish to automate your Forex Trading Decisions by using a Forex Expert Advisor then check out this Collection of The best Expert Advisors available for Forex Trading.

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Forex Market Trading – Forex Trading Training and Education

March 15, 2011 By admin Leave a Comment

Forex market trading was derived from the foreign exchange. The foreign exchange market which is commonly know as the forex market or fx has not been around for all that long. It was developed in the early 1970′s. The reason was because the United States had dropped the gold standard. This dropping of the gold standard caused national currencies to go haywire if you will. Prices began to fluctuate uncontrollably. When this occurred banks seized the opportunity to buy currency when it’s value was low and then resell it after it strengthened. Thus the forex market was born.

In todays forex market there is over trillion in transactions each day. The global forex market operates 24 hours a day, Monday through Friday. This is due to the different time zones worldwide because let’s face it, it is always day time somewhere in the world. Some of the most popular forex market trading revolves around the U.S. Dollar,Japanese yen, the Euro, British pound, Austrailian dollar and the Swiss franc.

Forex market trading performed by individuals accounts for only about 2% of the forex market. The forex market is comprised primarily of government banks, international banks, corporations, investment banks and hedge funds. Even at just 2% of over trillion that still equates to quite a tidy sum of money.

When participating in forex market trading it is always done in pairs. In other words you purchase one currency and sell another. The concept is rather simple. The theory behind this is to perform your trade when you feel that the currency you’re buying is going to rise in value in comparison to the currency you are selling. If you’re feeling was correct then you would perform another trade the other way. You would sell the currency you initially brought and purchase the one you sold.

As an example of this, let us say that the market offers a pair of currencies like this: GBP/EUR 1.2200. This would mean that the purchase price of one British pound is 1.22 euros. If an investor predicted that would change and that the euro was going to strengthen and be more valuable than the pound, you might sell let’s say 100,000 pounds, and buy 100,000 euros, and then wait. Then maybe two or three weeks later the rate of exchange fluctuates to this: EUR/GBP 1.3100. So this means that the euro is now worth 1.31 pounds, which would equate to a profit of 0.11 per unit.

The foreign exchange market is huge and quite tricky at times. It is inhabited mostly by large organizations and huge institutions. But this doesn’t mean that you can’t be one of the 2% of individuals that has elected to try your hand at forex market trading.

Are you a new forex trader or confused by all of the forex robots and forex trading software available today? Visit this site to find out what works best- Forex Market Trading Info. If you are still confused about forex market trading than try visiting this Forex Market Trading and review site.

 

Original article source: http://ezinearticles.com/?Forex-Market-Trading—Forex-Trading-Training-and-Education&id=1863979

Any link in this article may be an affiliate link that generates me income if you take an action or purchase a product as a result of that link.

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Forex Trading Guide for Beginners

March 14, 2011 By admin Leave a Comment

What is Forex? You might be asking. If so, I will attempt to explain the concept of Forex and the Forex Market in general. For anyone starting out in Forex trading, it is vitally important you understand the basics; as this will form the foundation for your forex trading future. I will try to simplify the concepts with examples, to help with your learning.

So, what is Forex? Well, simply put (Forex, FX, spot FX or currency market) is the Foreign Exchange Market. It is the worldwide decentralised financial market for trading currencies. Unlike the stock market which has its centralised markets such as the NYSE or FTSE 100. The Forex Market is referred to as an over-the-counter financial market. The currency market is a 24 hours a day market. Due to this round the clock open market, you can trade any time of the day or night. The forex trading hours are as follows:

 

New York Session: Opens @ 08:00 to 17:00 EST   

Tokyo Session: Opens @ 19:00 to 04:00 EST

Sydney Session: Opens @ 17:00 to 14:00 EST

London Session: Opens @ 03:00 to 12:00 noon EST

 

The best time to trade is when the market is most active and has the biggest volume of trades. Also, hours when the two trading sessions overlap, usually generates the highest volume of trades and are preferably the best times to place trades.

 

Overlapping sessions
New York and London: 08:00 to 12:00 noon EST
Sydney and Tokyo: 19:00 to 02:00 EST
London and Tokyo: 03:00 to 04:00 EST 

 

 The purpose of foreign exchange is to assist with international trade and investment, to enable businesses to exchange one currency for another currency. For example, a British company could import US goods by exchanging British pounds for US dollars then pay for these goods with the US dollars it now has in its possession. There are also large players within the financial sectors, mainly the commercial, retail banks and other financial institutions who make money speculating in the currency market. The Forex market is a highly liquid market, with an estimated daily turnover of up to trillion dollars. The dawn of the internet age in the mid 1990′s, brought about the proliferation of online forex broker companies. They were able to make forex trading accessible to everyday trader like you and me.
Now back to learning the basic concepts of forex trading. In Forex trading, currencies are traded in pairs namely: Major Pairs and Cross-Pairs. The Cross-Pairs that are most actively traded are derived from the three major currencies: EUR, GBP and JPY. They are all currency pair that don’t have any USD pairing. Major crosses are also referred to as “Minors” Here are examples of both Major and Cross (Minor) Currency Pair:

 

Major Pairs
EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, NZD/USD

 

Cross Pairs
EUR/GBP, EUR/JPY, GBP/JPY, AUD/JPY, AUD/NZD  

 

Currency Pair Quotes
In order to be able to read a currency price quote, you need to understand how it is presented. For example, the EUR/USD pair may have a price quote as follows:

EUR/USD = 1.3161

In the above price quote, the EUR currency before the / is the base currency while the USD currency after the / is referred to as the quote currency. So, one EUR unit or €1 is equal to 1.31615 US Dollar. Therefore, €1 can buy you .3161; alternatively you can say that in order to buy €1 you need .3161.

 

What is a Spread?
All forex brokers make their commission on the spread, which is the difference between the Bid (Sell) quote and Ask (Buy) quote price.
For example: EUR/USD Price Quote = Bid (1.3163) – Ask (1.3161)
The Spread is0.0002 = 2 pips

 

What is a PIP?
A Pip is defined as “Percentage In Point”, also known as points. It is the smallest price increment a currency can make. For example, 1 pip = 0.0001 for EUR/USD or 0.01 for USD/JPY. If the EUR\USD pair moves from 1.3161 to 1.3181 which is an increase of 0.0020, it therefore has moved by 20 Pips.

 

What is a PIP value?
The Value of a pip is either fixed or variable, as this is dependant on the currency pair. But as a general rule, the pip values of the EUR/USD are:

Standard Lot =
Mini Lot =
Micro Lot = .10

 

What is a Lot?
A lot is the standard unit size of a transaction. Generally one standard lot is equal to 100,000 units of the base currency, while one mini lot is equal to 10,000 units or one micro lot is equal to 1,000 units of base currency. See below

1 Standard Lot = 100,000 units
1 Mini Lot = 10,000 units
1 micro Lot = 1,000 units

 

What is Leverage?
Most Online Forex Brokers offer Leveraged accounts. By this it means, with a small account balance we can control a large amount with which to trade. Most brokers offer leverage of e.g.: 50:1, 100:1, 200:1 or 500:1
For example: Say we open a trading account balance of ,000 with a forex broker offering a Leverage of 50:1. This means that we now have a Leverage of ,000 that we can trade up to.

 

Forex Trade Example
The concept of Forex Trading is quite simple, so I will attempt to explain it with a basic example.
Currency Pair: EUR/USD
Price Quote : Bid (1.3163) – Ask (1.3161)
Account Deposit = ,000
Leverage = 50:1
Buy EUR/USD @ 1.3161

 

In order to trade forex, we need to open an online Forex broker account. We deposit say ,000 into our broker account. Let’s assume we intend to place a trade on EUR/USD pair; we anticipate that the EUR will appreciate more than the USD. We proceed to buy 1 mini lot size €10,000 at the current quote rate of EUR/USD = 1.3161.
So, one mini lot is (10,000 x 1.3161) = €13,161
Now let’s assume that our predictions are correct and the EUR did appreciate more than the USD. We later SELL our EUR at market rate 1.3181 which give us:
(10,000 x 1.3181) = €13,181. Therefore our Profit is:

€13,181 – €13,161 = €20 Profit

Alternatively, let’s assume our trade prediction was wrong and the EUR lost value against the USD. We later SELL our EUR at market rate 1.3141 which gives us:
(10,000 x 1.3141) = €13,141. Therefore our Loss is:

€13,141 – €13,161 = – €20 Loss

In my next article, i will talk about “Forex Money Management” and why you need to apply it as a vital element of  your forex trading plan.

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