 |
| A Professional Forex Trader |
What is a Currency Trading?
Trading basics you should know
Trading tools and techniques
Six Steps to improve your trading
Questions to ask your broker
Are you ready to trade?
THE FOREIGN EXCHANGE MARKET
/ FOREX MARKET
FOREX is the world's most traded market, with an average
turnover in excess of US$4 trillion per day. Forex trading includes buying and
selling one foreign currency against another. Compare this to the New York
Stock Exchange, which has a daily turnover of around US$50 billion and it's
easy to see how the foreign exchange market is the biggest financial market in
the world. It is also known as the largest financial market in the world.
, which has a daily turnover of around US$50 billion and it's
easy to see how the foreign exchange market is the biggest financial market in
the world. It is also known as the largest financial market in the world.
Generally, the Forex Market
is:
FLEXIBLE – Freedom to trade
anytime and anywhere with an internet connection.
anytime and anywhere with an internet connection.
DOCUMENTED – Historical data,
making it easier to analyze market movement.
RECESSION PROOF – The opportunity
to profit both from the rising and falling market.
MANAGEABLE – Complete control
over trading decisions.
(Learn the basics on online currency
trading with this 8 minute video. Forex is one of the largest financial markets
in the world - trading over 1.9 trillion in daily volume).
with this 8 minute video. Forex is one of the largest financial markets
in the world - trading over 1.9 trillion in daily volume).
Commonly Used ForexTerms
Know the Language
Know the Language
In Currency Trading, traders often use technical language that can
be intimidating when you're just starting out. When you see a word you don't
understand, you should refer to this page. As you familiarize yourself with the
language, you'll find that your understanding of Forex concepts as a whole will
improve.
, traders often use technical language that can
be intimidating when you're just starting out. When you see a word you don't
understand, you should refer to this page. As you familiarize yourself with the
language, you'll find that your understanding of Forex concepts as a whole will
improve.
Before we delve any deeper into the
possibilities that exist in the Forex market, we need to go over some basic
Forex market terms.
Pip: A pip (percentage in point) or point, is usually the smallest unit of measurement in the Forex market. Most currency pair quotes are carried out four decimal places—i.e. 1.4500. When you work with Alpari quotes are carried out to the 5th decimal place to provide better pricing. The 5th decimal place represents fractional pips. If the exchange rate of a currency
pair moved from 1.45000 to 1.45100, we would say that the price moved up 10
pips. You make money when the pips move your way in a trade.
Note: Any exchange rate that contains the Japanese yen as one of the currencies will only be carried out three decimal places.
Currency Pairs: We wouldn't have a Forex market if we weren't able to compare the value of one currency against the value of another currency. It is this comparison that drives prices. Forex contracts are always quoted in pairs. The Euro vs. the U.S. dollar (EUR/USD) is the most heavily traded currency pair. The U.S. dollar vs. the Japanese yen (USD/JPY) is another popular pair.
The following is a list of the most common currency pairs, their trading symbols and their nicknames:
Euro vs. U.S. dollar (EUR/USD): "The Euro"
Great Britain Pound vs. U.S. dollar (GBP/USD): "Pound," "Sterling," or "The Cable."
U.S. dollar vs. Swiss franc (USD/CHF): "The Swissie
U.S. dollar vs. Japanese yen (USD/JPY):
"The Yen"
U.S. dollar vs. Canadian dollar (USD/CAD):
"The CAD," or "Loonie"
Australian dollar vs. U.S. dollar (AUD/USD):
"The Aussie"
New Zealand dollar vs. U.S. dollar (NZD/USD): "The Kiwi"
Others:
Currency Pairs
Introduction to Currency Pairs
Pip: A pip (percentage in point) or point, is usually the smallest unit of measurement in the Forex market. Most currency pair quotes are carried out four decimal places—i.e. 1.4500. When you work with Alpari quotes are carried out to the 5th decimal place to provide better pricing. The 5th decimal place represents fractional pips. If the exchange rate
of a currency
pair moved from 1.45000 to 1.45100, we would say that the price moved up 10
pips. You make money when the pips move your way in a trade.Note: Any exchange rate that contains the Japanese yen as one of the currencies will only be carried out three decimal places.
Currency Pairs: We wouldn't have a Forex market if we weren't able to compare the value of one currency against the value of another currency. It is this comparison that drives prices. Forex contracts are always quoted in pairs. The Euro vs. the U.S. dollar (EUR/USD) is the most heavily traded currency pair. The U.S. dollar vs. the Japanese yen (USD/JPY) is another popular pair.
The following is a list of the most common currency pairs, their trading symbols and their nicknames:
Euro vs. U.S. dollar (EUR/USD): "The Euro"
Great Britain Pound vs. U.S. dollar (GBP/USD): "Pound," "Sterling," or "The Cable."
U.S. dollar vs. Swiss franc (USD/CHF): "The Swissie
U.S. dollar
vs. Japanese yen (USD/JPY):
"The Yen"U.S. dollar
vs. Canadian dollar (USD/CAD):
"The CAD," or "Loonie"Australian dollar
vs. U.S. dollar (AUD/USD):
"The Aussie"New Zealand dollar vs. U.S. dollar (NZD/USD): "The Kiwi"
Others:
Currency Pairs
Introduction to Currency Pairs
MACROECONOMICS - Economic Indicators
Every week a number of economic surveys and indicators are released. At one time, experienced professionals and economists had a distinct advantage in receiving this data in a timely fashion. Fortunately, the internet has changed this situation by providing access to anyone who wants it.
Economic indicators can have a huge impact on the market; consequently, knowing how to construe and analyze the information they contain is very important for forex traders. In this section we'll cover some of the most important economic
indicators. You'll learn where to find them, how to read them and how you can
use them to be successful in the forex market.
Every week a number of economic surveys and indicators are released. At one time, experienced professionals and economists had a distinct advantage in receiving this data in a timely fashion. Fortunately, the internet has changed this situation by providing access to anyone who wants it.
Economic indicators can have a huge impact on the market; consequently, knowing how to construe and analyze the information they contain is very important for forex traders
. In this section we'll cover some of the most important economic
indicators. You'll learn where to find them, how to read them and how you can
use them to be successful in the forex market.
What Is an Economic Indicator?
In its simplest form, an indicator could be considered any piece of information that can help an investor decipher what is going on in the economy. The U.S. economy is essentially a living thing; at any given moment, there are billions of moving parts - some acting, others reacting. This simple truth makes predictions extremely difficult - they must always involve a large number of assumptions, no matter what resources are put to the task. But with the help of the wide range of economic indicators, investors are better able to gain a better understanding of various economic conditions. There are also indexes for coincident indicators and lagging indicators, the components of each are based on whether they tend to rise during or after an economic expansion.
? In its simplest form, an indicator could be considered any piece of information that can help an investor decipher what is going on in the economy. The U.S. economy is essentially a living thing; at any given moment, there are billions of moving parts - some acting, others reacting. This simple truth makes predictions extremely difficult - they must always involve a large number of assumptions, no matter what resources are put to the task. But with the help of the wide range of economic indicators, investors are better able to gain a better understanding of various economic conditions. There are also indexes for coincident indicators and lagging indicators, the components of each are based on whether they tend to rise during or after an economic expansion.
Top
Economic Indicators
Wholesale Trade Report
Example
EUR: ZEW Survey (Economic Sentiment) (Volume = 3)
Example
EUR: ZEW Survey (Economic Sentiment) (Volume = 3)
The Economic Sentiment published by the Zentrum für
Europäische Wirtschaftsforschung measures
the institutional investor sentiment, reflecting the difference between the
share of investors that are optimistic and the share of analysts that are
pessimistic. Generally speaking, an optimistic view is considered as positive
(or bullish) for the EUR, whereas a pessimistic view is considered as negative
(or bearish).
Review Alex Nekritin's Article - Trading the Euro with Germany ZEW Survey
EMU/EUR/ECB Interest Rate Decision (Volume=3)
Review Alex Nekritin's Article - Trading the Euro with Germany ZEW Survey
EMU/EUR/ECB Interest Rate Decision (Volume=3)
ECB Interest Rate Decision is announced
by the European Central Bank. Usually if the
ECB is hawkish about the inflationary outlook of the economy and rises the
interest rates it is positive, or bullish, for the EUR. Likewise, if the ECB
has a dovish view on the European economy and keeps the ongoing interest rate,
or cuts the interest rate it is seen as negative, or bearish.
Review Alex Nekritin's Article - Trading the Euro with the ECB Rate Decision
Review Alex Nekritin's Article - Trading the Euro with the ECB Rate Decision
GBP: BOE MPC Vote Hike (Volume=3)
Interest rates are set by the Bank’s
Monetary Policy Committee. The MPC sets an interest rate it judges will enable
the inflation target to be met. The Bank's Monetary Policy Committee (MPC) is
made up of nine members – the Governor, the two Deputy Governors, the Bank's
Chief Economist, the Executive Director for Markets and four external members
appointed directly by the Chancellor. The appointment of external members is
designed to ensure that the MPC benefits from thinking and expertise in
addition to that gained inside the Bank of England.
RBA Interest Rate Decision (Volume =3)
RBA Interest Rate Decision is announced
by the Reserve
Bank of Australia. If the RBA is hawkish about the inflationary outlook of the
economy and rises the interest rates it is positive, or bullish, for the AUD.
Likewise, if the RBA has a dovish view on the Australian economy and keeps the
ongoing interest rate, or cuts the interest rate it is seen as negative, or
bearish.
Review Alex Nekritin's Article - Trading Australian Dollar with RBA Rate Decision
Review Alex Nekritin's Article - Trading Australian Dollar with RBA Rate Decision
Educational and Information
Economics
What is GDP and Why is it so important?
What is demand?
Are Oil Prices Helping or Affecting...?
Who Thinks Fiscal Deficits Are Good Idea?
Economy of the United Kingdom
Investing/Investing Basics
Fundamental Analysis
The DOW at 18K
Where to find economic indicator data?
Economic indicators for Germany
The Top Indicator for India's Economy
France's Economy: Wobbly But Still Importance
Economic Data and Educational Articles
What is demand?
Are Oil Prices Helping or Affecting...?
Who Thinks Fiscal Deficits Are Good Idea?
Economy of the United Kingdom
Investing/Investing Basics
Fundamental Analysis
The DOW at 18K
Where to find economic indicator data?
Economic indicators for Germany
The Top Indicator for India's Economy
France's Economy: Wobbly But Still Importance
Economic Data and Educational Articles
Take note: For background reading, see Economic Indicators For The Do-It-Yourself Investor.
Others
SNBomb - Reactions from Forex Brokers
Others
SNBomb - Reactions from Forex Brokers
Forex market is open 24 hours a day. It
provides a great opportunity for traders to trade at any time of the day or
night. However, when it
seems to be not so important at the beginning, the right time to trade is one
of the most crucial points in becoming a successful Forex trader.
So, when should one
consider trading and why?
The best time to trade is when the market
is the most active and therefore has the biggest volume of trades. Actively
traded markets will create a good chance to catch a good trading and don't even bother
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