Sunday, November 1, 2009
The euro (€) is the official currency of 16 of the 27 Member States of the European Union (EU). The states, known collectively as the Eurozone, are Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain. The currency is also used in a further five European countries, with and without formal agreements and is consequently used daily by some 327 million Europeans. Over 175 million people worldwide use currencies which are pegged to the euro, including more than 150 million people in Africa.
The euro is the second largest reserve currency and the second most traded currency in the world after the U.S. dollar. As of November 2008, with more than €751 billion in circulation, the euro is the currency with the highest combined value of cash in circulation in the world, having surpassed the U.S. dollar.Based on IMF estimates of 2008 GDP and purchasing power parity among the various currencies, the Eurozone is the second largest economy in the world.
The name euro was officially adopted on 16 December 1995.The euro was introduced to world financial markets as an accounting currency on 1 January 1999, replacing the former European Currency Unit (ECU) at a ratio of 1:1. Euro coins and banknotes entered circulation on 1 January 2002.
Tuesday, October 27, 2009
The final decision on the standard to be adopted is the fundamental of all reform in currency. Hence it is very necessary to go fully into the points of difference between other countries of the world and China. Let me first point out the difference between Europe and China. In Europe, as I have already mentioned in the previous chapters, it was a choice between gold and silver, without any further encumbrances. The most important point, and one that should not be lost sight of, was that at the time the choice was made there was a great deal of fixity of ratio between the value of the two metals. The two questions that were then being considered were: first, the choice of the metal which would furnish sufficient metallic currency for the purpose of the growing international trade; and, second, the simplification of trade accounts by the adoption of one or other of the metals as the standard of value. Each state in Europe was changing the ratio -within narrow limits - of the values of one or other of the two metals whenever it deemed it necessary; and such a procedure was, of course, not very conducive to the free flow of international commerce. Opinion was divided between two courses; one was the adoption of gold, and the other, the retention of gold and silver as before, without variability in value. The events that led to the final adoption of gold in England I have already explained; and her example was sooner or later followed in all other countries, where there was a large growth in the industrial and manufacturing activity, leading to an enormous increase in the national wealth, wages and prices; there was also a comparatively increased supply of gold when silver production was decreasing. A country which has a bigger national wealth naturally prefers a unit of greater value than one with a smaller wealth, wages and prices. Thus it is no wonder that England fixed upon gold. There must also be sufficient supply of the coin or metal that forms the medium of exchange; at the time when England was growing richer silver production was decreasing; and it was but natural that England should have taken to gold. A little later, even as late as 1886, when the production of gold was showing no signs of increasing, economists were wavering, especially with regard to their faith in gold. But when once again the production of gold increased by leaps and bounds -and the manufactures and industries of not only England but practically all Europe were increasing, in an even larger ratio - the gold standard became a fixity. During recent years again, there was a slight uneasiness, not because of the paucity of gold production, but because of the enormous growth of credit on a very slender basis of gold. While some years previously there was talk of too much gold, there were complaints in 1912 that the production of gold was insufficient to meet the currency demand of the world. What the future may have in store for us we do not know. The war in Europe is likely to lead to problems which might probably bring down gold from the high pedestal it has been on for over twenty years - as the standard of value, of course.
Contrast the conditions in China with those in Europe. There is no comparison between the national wealth of the two countries. There are no manufactures in this country, and besides the country has been for nearly forty years buying more than it sold, and thus accumulating a large adverse trade balance. The country has no wealth with which to improve its industry and manufactures; and it is a well-known fact that the profits of industries and manufactures are greater than those of agriculture, and that such profits alone have enabled Europe to adopt and maintain a gold standard. Moreover, China has not even the freedom to develop into a manufacturing country which the European countries had the good fortune to have. When the several states in Europe adopted machinery they protected the nascent industries by heavy taxation on all such foreign goods entering the country. Even to-day, practically every country in Europe - except England - the United States, and all the British Colonies have the most voluminous schedule of protective taxation. Foreign goods entering China are taxed merely to furnish revenue to the Government, and not with a view to encourage local industry or with a view to enable her to compete with foreign manufactures. The standard of living, especially in view of the almost entire absence of manufactures and the small national wealth, is extremely low; and the ratio between the standard in China and English may be roughly put at one to fifty. Therefore, the basis of a unit must naturally be regulated by the considerations which I have mentioned above.
Tuesday, October 13, 2009
The Forex exchange Autopilot technology helps users design and run any automatic forex trading software.
One of the largest financial markets is the Forex trading. Day or night, it doesn’t really matter; the trade goes on even as half of the world is asleep. It offers a lot of opportunities for many organizations and individuals to make profit.
Learn More About Forex Trading at Forex-Robot-Secrets.com :
Doing paper trade and simulated trading can be tested even before using real money.
Automatic forex trading software utilizes a program to judge falls and rises in currency rates to make profitable trading decisions.
Don’t be a scared to lose a certain amount of money, because any trade involves a lot of it. You can instead stop orders, it doesn’t mean that you shouldn’t limit your losses. And above all, learning from your prior losses is very important.
A exceptional trader by day should be serious. Based on their pre-set criterial and parameters an individual is required to make decisions in certain situations.
Frequently make a point to follow your trading plan/system; so you can adequately evaluate the results of your plan. If expectations aren’t met, then it’s time to make adjustments and tunings, so that your plan be of good use ahead.
People plunge in deeper because they are persuaded by eagerness and fear.
There are also some day traders that are afraid to lose money. For instance your stock goes down, and you’re still hoping that after some time it will rise again.
Leave no room for fear or greed to take over, as a day trader this will take you straight to your losses.
You can also trade online with Forex trading at home if you’re serious about day trading. A requirement you must need is some software and hardware available for a good platform for you to work online trading.
One of the hardware requirements will be using an operating system with Window XP or the like. You shouldn’t use a LCD monitor less than 19inches.
Using the internet you can use two types of execution services. The first type differs on how reviewed, accepted, and accomplished customer orders are. It causes delay in a trade completion. On the other hand, the EDAT enables the trader to contact specialists directly. Resulting to a much faster achievement and approval of the orders.
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Saturday, October 3, 2009
Why do you trade?
Let me guess…
Because you want to make a crapload of money and be able to buy anything you wish?
While this is a perfectly valid reason, it will most likely lead to excessive greed and ultimately lead to your trading account’s destruction.
You might as well take your money to Vegas instead, and gamble it away.
Once your money is all gone, at least it was entertaining.
Greed is the worst motivation for trading. The market will always punish greed and will always reward moderation.
Never try to make all of your money on one trade.
Never try to make all of your money on one trade.
If you do, you are not trading, you are gambling!
There is a fine line between traders and gamblers. When there is real money on the line, there are always those who take blind chances.
If you want to be a successful, do NOT think like a gambler, do NOT take blind chances and do NOT solely rely on luck.
Luck comes and goes just like the gambler.
It’s the trader who remains.
Friday, October 2, 2009
Stick to pairs – This is a golden rule of thumb. While of course you can trade the currencies across each other without penalty, it is a wise idea to limit the currencies that you deal with. Even better to restrict them to pairs that you can easily compare to each other. Of course you can compare the USD to all of the other currencies if you are looking to engage in a new transaction, but if you are considering all of the currency choices available it might take you hours to pick one which could still turn wrong. It is much better instead to choose a pair that you always use together. For example, you could do pairs involving the USD and the GBP with another pair consisting of CAD and AUD. By always trading within these pairs, you are going to significantly decrease the amount of information you need to review for each trade.
Never make a trade without research – The main reason why many traders were not successful in Forex is that their attention is centered on the incorrect information of coming up with their trading decisions. They practically tend to forget the most relevant aspect, the price behavior. The technical indicators are found mainly in almost all Forex day trading systems. Taking a couple of minutes for some quick research is not that difficult and if you are trading in pairs as mentioned in the previous tip you will find that it is quite easy and fast to do.
Plan your strategy out – If you were going to build a house and expect it to stand you would do plenty of research to get ready then you would spend a bit of time trying to ensure that you have all of the materials, knowledge and people necessary to be successful. This is a strategy for building a house and in a similar manner; you need a strategy for Currency trade. Diving in is never a good idea for anything and Forex is certainly not any different. Finding true success means having a specific goal in mind, what do you really want from the market? Are you looking to buy a car? Are you looking to fund your retirement? Are you even looking to become the richest person in the world? You need to know where you are trying to go so that you can set up a strategy that you stick to without fail.
The correct mindset is one of the biggest things that is required in order to be secure while engaging in transactions in Forex trading. Knowing what the major problems tend to be and working diligently to avoid them will help you to ensure you get on track properly and stay there. Taking control of your Foreign exchange trading experience really is possible but you absolutely must ensure you get started successfully. Starting out properly is much easier than trying to fix your mistakes after the fact.
A good Forex trade broker will be able to help you in regards to learning how to obtain accurate real time quotes. The important consideration here is that because the quotes are real time, they will continuously change. You cannot typically get the same quote several times simply because people are always trading. Due to this having an accurate quote is helpful, but it is just that a quote which can still change. Still yet though, basing decisions off of these quotes is very important and can allow you to accurately ensure that you are moving in the right direction.
Look for a Currency trade broker who will manage your account for you if you do not have the time to manage it yourself. This is something that is opted for quite often for people who have overly busy schedules and can be arranged easily. The fees that you will pay under this arrangement are typically higher, but you can still come out ahead if you choose an experienced broker. It is important that you ask for information on the brokers returns though before handing over your money. You need to be able to see just how successful they are with the money that they are investing.
A Foreign exchange trading broker should also be able to help you with deciding what to buy and what to sell. Because of the experience that they have, they can generally look at the market newsfeeds and quickly determine the best transaction to make. This is a skill that you too will acquire with time, but especially in the beginning the advice of a broker can significantly speed up the research process.
A great Currency trade broker should also be able to recommend a good Foreign exchange software for you to use. Many different software packages exist, and many are better than others are. Trying to decipher which software packages are truly the best is not always simple. Having someone who can actually recommend a good package that will allow you the information; you need, without overwhelming you is a very important consideration. It is also vital that you have a software package that works with your computer and investors who are using computers that do not run Windows operating systems are often at a disadvantage. A Forex trade broker can point you towards suitable software regardless of the operating system that you use.
There are several things to consider before you open an account to a Forex day trading broker. First, the Forex day trading broker must a license holder and registered as a Futures Commission Merchant (FCM) together with the Commodity Futures Trading Commission (CFTC) so as to avoid deception and trade practices which are offensive. Second, you should know the fees concerned. Is the spread fixed or variable about the kind of account? Third, the speed of execution. Fourth, the platform of trading. Fifth, the Forex day trading broker should give 24-hour support. Sixth, it must have solid financial backing. Seventh, always get a demo account.
This is the reason why people would attempt various kinds of ventures to earn enough money for a living. One of the most common of this is the Forex trading.
Dealing in the Foreign exchange market has many advantages than other financial markets. Among of these are:
• A better liquidity
• 24/7 market
• A better implementation
Traders and investor perceived the Forex trading market as a new variation of opportunity because of these advantages. So, does it mean it is simple
to earn money in the Currency tradingmarket? Let us just analyze it.
Before you enter Currency trade, you have to understand how the Forex market functions. If you do not know anything about Forex trading, you can take courses from schools that offer Forex trading courses. By doing this you can be fully aware of what the market is all about and you will know your way around the market.
Anyway, still many traders have succeeded in this venture because of the following:
Some of the forex day traders are knowledgeable in this matter. They have decided to educate themselves with every single and important detail of Forex trade. The best currency day trader knows that every deal that they do is a new learning experience.
2. Forex trading system
Most of the best traders have a Foreign exchange trading system. They have the procedure to follow strictly in the system, because they know that only the deals that are indicated by their system have a better chance for success.
3. Price behavior
Currency traders have included price behavior in their system. They know price Fluctuate very fast so they should act very soon.
4. Money management
Preventing the hazard of ruin is a main subject to the top forex currency day trader. After all, you cannot really do well in this market without putting funds into your trading account.
5. Trading psychology
They are conscious of every psychological matter that involves the choices completed by forex currency day traders. They have received the reality that every person trade has two possible results, not just the success part.
These are only some of the important factors that control the success of currency traders.
People know that it is not simple to earn money in the Currency trade market, but it is achievable. But how much time will it take to achieve a good
result? The answer to this question may differ. What you should keep in mind is that attaining a successful trading is still a process. It is not
something you attain in a short time.
Trading success depends on the forex currency trader. Some would even try to make it for years and still fail to get their goal. For others lucky enough a few years is enough to make steady beneficial results.
To trade successfully is a hard endeavor. It is a continuing process for years to learn and mastery. Having the five important factors involving education, trading system, price behavior, money management, and trading psychology plus, the discipline to follow your trading system and trading scheme the answer will be positive to your question of whether it is worth being in the trading business in terms of return of investment. Thanks to Zombi
The level of qualification for currency day traders brokers was raised due the incredible advancement of online forex trading, the security program and telecommunications. Somehow, the online forex currency trading made the forex brokers to develop more their abilities for their own sake. Surely, the danger will be lower while on the operation. Thus, if the level of forex currency trading qualification is higher, then the trade amount will also be higher.
The typical methods of the forex trading were completely changed because of the presence of dealing systems, which is automated in the eighties, together with the co-coordinating systems in the nineties. The systems of dealing are online computer systems wherein the banks are integrated in a united net, whereas, the co-coordinating systems are electronic brokers.
The forex currency trader will buy and sell currencies with the purpose of having a profit especially when the currencies value will change for their own advantage, regardless on whatever source of news in the world. Just like any commodity, currencies can be purchased or sold.
The online forex trading has been widely accepted considering the basic role of the computers. The dealing systems and the co-coordinating system are interconnected to all the traders of the world, thus, forming an electronic brokers market. The account report, filling vouchers, the work of the secretary, and the methods of lowering the risk are well in place.
In order to use your investment capital to the maximum, you should be wise enough to avail the online forex day trading. What are the advantages of the currency markets online? They are different compared to the other traders. We have the following advantages.
1. The biggest market is the forex market, foreign exchange trader are given approximately limitless liquidity and flexibility.
2. The currency trading does not sleep. There is no need to wait for the opening of the market. They are open all night. This is the motive why the online forex trading is very much popular that suits practically to your day or night.
3. You will have the same opportunity in having a profit whatever way the currency goes to. Aside from that, there are only fourteen pairs of currencies to trade, as compared to the several thousands of stocks and options.
4. The online currency trading gives a great leverage. Your resources for investment will be treated to the fullest on online forex day trading. In view of this, traders avail the online forex trading.
5. The prices of the online forex trading are unsurprising. Prices of currency, though unstable have the tendency to produce and go along with the trends.
6. There are no commissions for online currency trading. No exchange fees or any unknown fees whatsoever. The forex market is so transparent. No computation of commissions or any fees in executing a deal.
7. The online forex currency trading is amazingly fast. The orders can be done within 1-2 seconds. You can choose whichever you think is faster and something that will be profitable for you.
Forex day trading is the largest and fastest market in the world. Deals in this market are often very large with different countries and financial institutions participating, and often lasts only a day.
Experience will enable you to know your way around the Currency trading market and enables you to predict the outcome of the trade. However, it takes
months and years of experience to be successful in this market.
Losing is part of the trade in this market, to minimize your lose, here are some tips that you should avoid upon entering the Forex trade market:
Most beginners or novice forex currency day trader often fail in this trade because they do not take ample time to learn about the forex market. It is recommended that a beginner forex traders should first take at least a course on Currency trading to understand the market thoroughly. Understanding how the Forex trade market works can give you the knowledge and the edge to be successful in this field. It is also recommended that a beginner should first observe how a seasoned currency traders does their deals. By doing this they will know how to buy and sell currencies at the right time.
Trading often with tiny profit targets and tight stops. To be successful in this market you should not just think of tiny profits, most
beginner forex day trader often has fears of losing money, therefore, only targets small profits.
Don’t have a trading plan. You might think that making money is the plan. But, there is more to it than just making money. You should know what strategy to use in a particular day and particular currency pairs to choose. With no trading plan, your trades will be unfocused and directionless. Make a trading plan with goals and strategy, and be sure you follow them.
Don’t be over confident, this will spell disaster in your trade. Keep the trade simple, and not overly complicated. Keep your trades manageable. Trade only a few currency pair that you can manage. Often, beginners tend to acquire large amounts of trade thinking that they can make more money out of it. The result: unmanageable trade and often loses.
Do not be emotionally affected by losing. Take lose as an advantage and a learning experience. Determine what mistakes you made and find out how you can manage them. Remember that the forex market is very unpredictable and loses are expected. Be professional. If the trade forecast is wrong, stop trading immediately and trade again another day.
Don’t be scared on losing, this will often get you to target small profits. Risk and losing is part of the trade. Remember that courage means trading and trading means profit.
Don’t rely heavily on trading computer software that predicts the outcome of the trade. Remember that Forex trading is often unpredictable and relying heavily on these machines can make you miss a good trade. Use these machines as a guide and it is good if you rely on your gut feeling.
Demo trading or simulated trading is a great way to learn forex trading, but, it can also develop bad habits for traders. Because simulation lets you deal with simulated money, there is no risk, therefore it makes FX easy. This can develop to bad habits by not caring about losing real money and also develops over confidence. Keep in mind that your greatest teacher is your experience. Trade in real markets that deal with real money to get the real feel on winning money or losing it.
Blinded by the sales page of the trading methods being sold to them, all those words of “unlocking the secret” and “unknown key to forex success”, make them disappointed in the end most of the time. They discover that some of the content are already heard about once or twice. The have the conclusion of it being too “simple”, no wonder there are some good,quality trading methods out there are having negative comments. It is not of the trading method, but the one who used it.
Some of them seek for a formula that others may find too complicated, where it is actually a ‘combination of indicators’ or a set of simple indicators combined in the most uncommon way. Thinking this way may also lead to disappointment, because they assume that a method in Forex must be complex and not too simple, and any other method they encounter should be more complex than what they discovered, or else, they complain and give up.
Amateur traders make this mistake. The process may repeat until one gives up, without even fully investing in understanding the full process in trading.
Most of the trading methods out there are not complicated, they are smaller set of rules combined in a simple manner and applied in the most uncommon way. The “complicated stuff” are for geeks and big banks. The bottom line is, if you can not understand something, it is impossible to apply it.
It is best not to skip in learning a powerful new method in Forex trading. You need to learn:
- the proper set-up, entry and exit rules
- how to protect your trade with stops
- how to apply your method in a timely basis, to get most out of the method
- how your learning adds up together to make you a better trader, not a frustrated one.
Simple is not always the easy way, it was just built step by step for the easiest of understanding and application. Simple=Powerful, with the use of just few indicators and rules in a non-textbook approach, is what makes success in the financial markets.
Monday, August 17, 2009
There is always buyer and seller in Forex market. The Forex market absorbs trading volumes and per trade size which dwarfs the capacity of any other market. On the simplest level, liquidity is a powerful attraction to any investor as it suggest the freedom to enter or exit the market at any time. Forex traders benefit from the ability to respond to breaking news immediately. There is no other market or investments that you can ever make an exit exactly at the time you wish to.
24 Hour Trading:
The Forex market is open 24 hours daily. When Asia market is close, the European market start follows by the USA market and continue by Asia market again the next day. Thus, this allows Forex traders to take positions regardless of the hour and locations.
Profit on Bulls and Bears:
"Buy low sell high", this is what every investor knows and practising in whatever market. One of the most exciting advantages of Forex trading is the ability to generate profits whether in the bull or bear condition. In the Forex market, apart form buy low sell high, Forex traders can always sell high and then buy back at lower price to generate profit.
In Forex trading, a small margin deposit can control a much larger total contract value. 200 to 1 leverage enable Forex traders to buy or sell $100,000 worth of currencies with $500 margin deposit. It gives Forex traders the ability to make extraordinary profit.
No Commissions or fees:
Trading Forex has much lower transaction costs than other investment products, a very important point for active traders.
Free Resource for Forex Trading:
There are lot's of online way for free resources for foreign trading. You can visit www.wikipedia.org or www.google.com and just type forex and click on search button then you can see lots of informative sites. Another way of knowing forex trading is from the books of big business which are available in book shop and markets.
Sunday, August 16, 2009
Sunday, August 9, 2009
- Ask (Offer) — price of the offer, the price you buy for.
- Aussie — a Forex slang name for the Australian dollar.
- Bank Rate — the percentage rate at which central bank of a country lends money to the country's commercial banks.
- Bid — price of the demand, the price you sell for.
- Broker — the market participating body which serves as the middleman between retail traders and larger commercial institutions.
- Cable — a Forex traders slang word GBP/USD currency pair.
- Carry Trade — in Forex, holding a position with a positive overnight interest return in hope of gaining profits, without closing the position, just for the central banks interest rates difference.
- CFD — a Contract for Difference — special trading instrument that allows financial speculation on stocks, commodities and other instruments without actually buying.
- Commission — broker commissions for operation handling.
- CPI — consumer price index the statistical measure of inflation based upon changes of prices of a specified set of goods.
- EA (Expert Advisor) — an automated script which is used by the trading platform software to manage positions and orders automatically without (or with little) manual control.
- ECN Broker — a type of Forex brokerage firm that provide its clients direct access to other Forex market participants. ECN brokers don't discourage scalping, don't trade against the client, don't charge spread (low spread is defined by current market prices) but charge commissions for every order.
- ECB (European Central Bank) — the main regulatory body of the European Union financial system.
- Fed (Federal Reserve) — the main regulatory body of the United States of America financial system, which division — FOMC (Federal Open Market Committee) — regulates, among other things, federal interest rates.
- Fibonacci Retracements — the levels with a high probability of trend break or bounce, calculated as the 23.6%, 32.8%, 50% and 61.8% of the trend range.
- Flat (Square) — neutral state when all your positions are closed.
- Fundamental Analysis — the analysis based only on news, economic indicators and global events.
- GDP (Gross Domestic Product) — is a measure of the national income and output for the country's economy; it's one of the most important Forex indicators.
- GTC (Good Till Cancelled) — order to buy or sell of a currency with a fixed price or worse. The order is alive (good) until execution or cancellation.
- Hedging — maintaining a market position which secures the existing open positions in the opposite direction.
- Jobber — a slang word for a trader which is aimed toward fast but small and short-term profit from an intra-day trading. Jobber rarely leaves open positions overnight.
- Kiwi — a Forex slang name for the New Zealand currency — New Zealand dollar.
- Leading Indicators — a composite index (year 1992 = 100%) of ten most important macroeconomic indicators that predicts future (6-9 months) economic activity.
- Limit Order — order for a broker to buy the lot for fixed or lesser price or sell the lot for fixed or better price. Such price is called limit price.
- Liquidity — the measure of markets which describes relationship between the trading volume and the price change.
- Long — the position which is in a Buy direction. In Forex, the primary currency when bought is long and another is short.
- Loss — the loss from closing long position at lower rate than opening or short position with higher rate than opening, or if the profit from a position closing was lower than broker commission on it.
- Lot — definite amount of units or amount of money accepted for operations handling (usually it is a multiple of 100).
- Margin — money, the investor needs to keep at broker account to execute trades. It supplies the possible losses which may occur in margin trading.
- Margin Account — account which is used to hold investor's deposited money for FOREX trading.
- Margin Call — demand of a broker to deposit more margin money to the margin account when the amount in it falls below certain minimum.
- Market Order — order to buy or sell a lot for a current market price.
- Market Price — the current price for which the currency is traded for on the market.
- Momentum — the measure of the currency's ability to move in the given direction.
- Moving Average (MA) — one of the most basic technical indicators. It shows the average rate calculated over a series of time periods. Exponential Moving Average (EMA), Weighted Moving Average (WMA) etc. are just the ways of weighing the rates and the periods.
- Open Position (Trade) — position on buying (long) or selling (short) for a currency pair.
- Order — order for a broker to buy or sell the currency with a certain rate.
- Pivot Point — the primary support/resistance point calculated basing on the previous trend's High, Low and Close prices.
- Pip (Point) — the last digit in the rate (e.g. for EUR/USD 1 point = 0.0001).
- Profit (Gain) — positive amount of money gained for closing the position.
- Principal Value — the initial amount of money of the invested.
- Realized Profit/Loss — gain/loss for already closed positions.
- Resistance — price level for which the intensive selling can lead to price increasing (up-trend).
- Scalping — a style of trading notable by many positions that are opened for extremely small and short-term profits.
- Settled (Closed) Position — closed positions for which all needed transactions has been made.
- Slippage — execution of order for a price different than expected (ordered), main reasons for slippage are — "fast" market, low liquidity and low broker's ability to execute orders.
- Spread — difference between ask and bid prices for a currency pair.
- Standard Lot — 100,000 units of the base currency of the currency pair, which you are buying or selling.
- Stop-Limit Order — order to sell or buy a lot for a certain price or worse.
- Stop-Loss Order — order to sell or buy a lot when the market reaches certain price. It is used to avoid extra losses when market moves in the opposite direction. Usually is a combination of stop-order and limit-order.
- Support — price level for which intensive buying can lead to the price decreasing (down-trend).
- Swap — overnight payment for holding your position. Since you are not physically receiving the currency you buy, your broker should pay you the interest rate difference between the two currencies of the pair. It can be negative or positive.
- Technical Analysis — the analysis based only on the technical market data (quotes) with the help of various technical indicators.
- Trend — direction of market which has been established with influence of different factors.
- Unrealized (Floating) Profit/Loss — a profit/loss for your non-closed positions.
- Useable Margin — amount of money in the account that can be used for trading.
- Used Margin — amount of money in the account already used to hold open positions open.
- Volatility — a statistical measure of the number of price changes for a given currency pair in a given period of time.
- VPS (Virtual Private Server) — virtual environment hosted on the dedicated server, which can be used to run the programs independent on the user's PC. Forex traders use VPS to host trading platforms and run expert advisors without unexpected interruptions.
Saturday, August 1, 2009
Flights to quality
Unsettling international events can lead to a "flight to quality," with investors seeking a "safe haven." There will be a greater demand, thus a higher price, for currencies perceived as stronger over their relatively weaker counterparts. The Swiss franc has been a traditional safe haven during times of political or economic uncertainty.
Currency markets often move in visible long-term trends. Although currencies do not have an annual growing season like physical commodities, business cycles do make themselves felt. Cycle analysis looks at longer-term price trends that may rise from economic or political trends.
"Buy the rumor, sell the fact"
This market truism can apply to many currency situations. It is the tendency for the price of a currency to reflect the impact of a particular action before it occurs and, when the anticipated event comes to pass, react in exactly the opposite direction. This may also be referred to as a market being "oversold" or "overbought". To buy the rumor or sell the fact can also be an example of the cognitive bias known as anchoring, when investors focus too much on the relevance of outside events to currency prices.
While economic numbers can certainly reflect economic policy, some reports and numbers take on a talisman-like effect: the number itself becomes important to market psychology and may have an immediate impact on short-term market moves. "What to watch" can change over time. In recent years, for example, money supply, employment, trade balance figures and inflation numbers have all taken turns in the spotlight.
Technical trading considerations
As in other markets, the accumulated price movements in a currency pair such as EUR/USD can form apparent patterns that traders may attempt to use. Many traders study price charts in order to identify such patterns.