Forex Top List Team

Posts Tagged ‘Forex’

Pips Explained

Wednesday, June 30th, 2010

Currency trading pips are a vital part of forex trading that any trader must grasp. They’re the measure of price movements, and thus of profit and loss. Brokers customarily translate pips into dollars and cents for you, or into the currency that your account is held in, if it’s not US dollars. However , when comparing 2 trades with different position sizes it’s the profit or loss in pips that tells you more than the profit in bucks.

PIP stands for percentage in point. Spread is also measured in pips. In practice, most currencies are quoted to 4 decimal places, e.g. In this situation one pip is 0.0001 units of the quote currency. So if that price changes to 1.2316, the price has increased by one pip. So when the yen is the quote currency, one pip is 0.01 yen.

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Learn Profit-making Currency Trading

Wednesday, June 23rd, 2010

Forex trading ebooks are sometimes better than printed books. The 1st reason is that ebooks are often shorter, with less fluff, and more likely to be tightly focused on one trading methodology. This is a great way to learn any sort of practical ability. If a picture paints 1,000 words then a video films 1,000,000. One of the things that any trader must cover is mindset and psychology. Beginners have a tendency to skip over this thinking the action of trading is more important, but this is a boo boo. Experienced traders find that the foreign exchange trading books that cover this in depth are the ones that they read time after time and learn something new from each time.

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Using Micro Currency Trading Account

Monday, May 31st, 2010

Beginning with a micro account doesn’t imply you can avoid the demo stage. It is important to get to know both of your system and your broker’s platform in demo mode before you go live. This cuts down on the likelihood of making technical mistakes or mistakes in the execution of your system in your real cash account, provided naturally the platform stays the same in demo as for the real market. To get the maximum from a micro foreign exchange account it’s very important to have a system that does not involve huge risks. In most cases you will be using high leverage on the account or trading more than one lot, so you maximize the amount that you can make from winning trades. This indicates that any loss is likely to have an enormous impact.

Therefore you need a system that only makes little losses. This will wipe out a trader using maximum leverage in a micro account. Instead, look for a system with steadier results. Of course, no forex system is completely predictable, but statistically a tiny account balance will have an improved chance of surviving that way. Used in this manner, a micro forex account can be the best way to get started with noob currency trading.

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Automated Trading Software for Making Profits with Foreign Exchange on Auto Pilot

Thursday, April 15th, 2010

The arrival of automated trading software has made it so easy for the average intelligent person to get into foreign exchange trading, even though they know little about the markets before they start. There is a big choice of foreign exchange trading software, also known as bots or expert counsellors. They can be downloaded for a reasonable price and set up to trade on your broker account without you needing to understand anything about the global forex market – at least in principle. Historically it was the province of international banks and huge finance institutions who began changing currencies to supply their customers for world travel or the exporting and importing of products. At the same time the minimimum lot size was reduced with the arrival of mini and then micro accounts by many brokers. The result is you can now start trading foreign exchange from home with just one or two hundred dollars in capital or less, and a computer hooked up to a broadband connection. What’s more, you may even buy automated trading software so that you can do it hands free.

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Identifying Trends

Friday, March 26th, 2010

An essential part of any trader’s currency trading education is learning to spot trends. This is your signal the market is making a sustained move, either up or down, and you can profit from it by opening a trade. The famous asserting ‘the trend is your friend’ is at the heart of this technique.

Using trends to profit from forex trading may appear just about too easy. Yes, it’s a simple strategy, but it works… Provided you can spot the difference between an emergent trend and a trifling fluctuation. That is where the ability, experience and tools come in. But truly it’s a extremely simple method and you should not attempt to complicate it.

There are many other ways of identifying a trend using either technical research (charts and indicators) or market information (fundamental criteria). Drawing trend lines on a candlestick chart is perhaps the most straightforward system. You can identify triangle patterns which will envision a breakout in one direction or the other, and check these against other indicators such as the MACD crossover. It’s also wise to test your pattern on charts for different periods, e.g. Check hourly against daily charts and so on.

There is no need to know all of the different strategies for spotting a trend. Perfect 1 or 2 trustworthy methods and you have all you need to earn income. Remember that all techniques have their successes and their failures, and it’s the overall profit or loss over the long term that counts. Do not be put off by one failure, and control your risk so that two losses in a row will not have a gigantic effect on your funds or on your confidence.

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Reading Candlestick Charts

Tuesday, December 1st, 2009

In Forex trading, one of the main instruments are candlestick charts. This instrument is used to monitor market changes and movement, analyze markets and make trading decisions. A lot of other Forex tools and systems are developed on top of these charts, so it is crucial to learn them first things first.

The candlestick charts were invented in ancient Japan, by a smart trader who was tracking the prices of rise. He has developed a method to clearly see hot the prices changes over time, which allowed him to predict the future changes. The charts consist of bars (candles) with a vertical stripe. The bars show the opening and closing price of the time-frame, while the stripes show high and low prices.

The colors of the candles change according to the price – if it was higher on opening than it was on closing, the candle is filled (or often red), otherwise it’s empty (green). The patterns of these candles indicate, among other things, the trends – the dominant color shows the upward or downward trend.

Other important indicators of candlestick charts are the patterns of candles. For example, a doji (opening and closing prices are equal or close to equal, thus forming a figure resembling a cross) can mean a turning point in market – it is likely that the current trend will change.

There are other formations also, but I’ll talks about them next time.

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