Due to the large number of questions about things basic and primitive in forex trading you want to convey this information from several locations until a clearer picture about the mechanism of this trade and I hope that you find a useful and clear image.
Introduction to Forex?
Is the market which is where speculation and trading in foreign currencies, Foreign Exchange and are in the market buying and selling currency interview any other currency that the method of dealing in this market are based on pairs of currencies.
The couples are classified in this market compared to the U.S. dollar into two types:
* Major currencies:
A corresponding dollar currencies such as euros, pounds, francs, yen.
ERU / USD
GBP / USD
USD / CHF
USD / JPY
* Currency called the intersections:
The other currencies among themselves and is not a party to the dollar.
Such as: EUR / GBP
GBP / JPY
And so on
And deal with this market a very large number of traders, including the most influential are the central banks and international brokerage firms, banking institutions, financial institutions, merchants, businessmen, governments and individuals.
The working hours of currency exchanges and their names UTC:
Sydney22:00
To
06:00
Tokyo00:00To20:00
London
08:00
To
17:00
New York13:00To21:00
The feature will be clear to us the currency market from the previous table, which indicates that the trading and trading in this market continues 24 hours a day except on Saturday and Sunday, which represent the weekend.
Method of trading in the forex market:
Are treated on the principle of financial LEVRAGE MARGIN elevator, which characterizes this market, where large traders can enter amounts of money relatively simple so that they can trade in this market.
For example, when you are trading with $ 1000 more pejorative than $ 100,000 deal in this market and the amount of insurance is reported as $ 1000 only. And is called here a decade.Examples of the buying and selling in this market:
First before buying and selling decisions on building shops by his analysis of the movement of currencies over the chart and technical analysisThe shops to buy in the low points and sell at the high points.Can also store sales in the high points and make purchases in low-lying areas.
Suppose you enter to buy two (Lot) on the EUR / USD 1.2410 at the point and then increased the price you sell at the point at 1.2420 will be the profit and loss account here in the following way:
Profit or loss = (sale price - purchase price) * size of the contract [* number of contracts
Profit or loss = (1.2420-1.2410) * 100,000 2
Profit or loss = $ 200
But the question here is what is the currency that you bought?
In the previous example, we buy the euro we have any to sell the dollar and then we had the sale of the euro, so we've bought the dollar,
When you hear the process of buying your next pair EUR / USD or USD / CHF currency, the intended purchase is the first currency and sell the second currency.
The same way in the sale. That is always going to talk on the face of the first pair.
--------
Another way to facilitate the process of profit and loss account are as follows:
Subtract the sales price of the purchase price and remove the comma from the output you will see the number of points
Then multiply it by 10 and multiply the number of contracts
Ie the selling price in the previous example = 1.2420
The purchase price in the previous example = 1.2410
1.2420-1.2410 = 0010 would be a clear separation of the points 10 points
Then multiply it by 10 to get the profit in dollars of the contract and then multiply the number of contracts
10 * 10 * 2 = $ 200
Another example of another pair yen / dollar
You sell at a point 109.10
When you lower the price to sell at 108.60
Total points here would be 109.10-108.60 = 50 points
50 points * 10 = $ 500 for a
What distinguishes the currency market:
* Currency market is that the top market in terms of volume of transactions daily business.
The possibility of trading in this market 24 hours a day / 5 days a week. And access to and investment in this market is not limited at all you can do hundreds of transactions a day easily and without limits.
Possibility of real-time trading in this market as it is running and the SPOT system is characterized by speed and estimated the shops to buy and sell quickly and if the purchase order entry and sale. Where the seller and the buyer in this market is in every moment.
This market, which also distinguishes it is not restricted to a specific destination in control of his movement, but this market is very large and can not be controlled easily and monopoly and manipulation of exchange rates in it.
The most important feature in the currency market is that there are two tracks to make a profit where you can sell in the event of falling currencies and then buying from the bottom and you can also purchase currency is rising and if you buy from the top.
* The existence of the leverage that allows you to trade in relatively small amounts.
Key features also, which must be taken into account before entering this market is the profit the very high and the corresponding high risk, it could be traded and the gains are so large and fantasy in this market in a very short time and also if you did not improve the stores to act with this market in terms of study and learn some basics and methods deal with it may incur large losses
Margin (Margin)
The introduction of margin of strategies and widespread in the world of finance and investment, this system is working to increase (purchasing power of the investor) and reduces the financial burden required to engage in trading operations in the global market.
The system margin (margin) depends directly on the leverage (everage) to calculate the investor, and in the following example we will explain the general idea of the system margin, God willing.
For example, if the one of the investors to open an account margin of $ 5000 and the leverage for this account 1:100, it means that the purchasing power of the investor will double to reach $ 500,000 bears only the $ 5,000 in the account and will not bear any additional financial burden .
And the sense more clear, if desired Almsttmervi sale or purchase of 100,000 €, for example, would need only $ 1000 Kmarzin to be able to trade in the amount of 100,000 €.
Example: Abdullah investor in global financial markets, and through his experience in this field and through analysis by Ioaill to read them, Abdullah believes that the exchange rate of pound sterling against the U.S. dollar (GBP / USD) will rise from 1.8645 to 1.8770, reaching levels in the days next few years. Abdallah decided that the process of buying £ 150,000 against the U.S. dollar. How will Abdullah of money to do the business process on the assumption that it has a trading account on margin leverage 1:100?
Margin requirement = total amount × Leverage = 150,000 × 0.01 = 1500 $
Abdullah will be using the amount of $ 1,500 from the account of its margin, to be able to buy £ 150,000 against the U.S. dollar on the exchange rate of 1.8645
And two days after the exchange rate of pound sterling against the U.S. dollar to 1.8733 parts Abdullah said he decided to sell the amount that was purchased.
What is the result of trading by the Abdullah? Profit or loss = (sale price - purchase price) × contract size × number of contracts = (1.8733-1.8645 × 150,000) = 1320 $
Note from the previous example that the system margin allows an investor the opportunity to enter and get great deals on the interest in full, and that by trading small amounts qualitatively. As this system reduces the financial burden required of the investor and increases the purchasing power of its own trading account.
And should note that the increase in expected earnings this Alastrtejah, will accompany the increased perceived risk for the same investment, in the case of unfulfilled expectations of the market - God forbid - and to reduce this risk we recommend always using the strategies of stop-loss when entering into any process of trading, and God help you! .__________________
Introduction to Forex?
Is the market which is where speculation and trading in foreign currencies, Foreign Exchange and are in the market buying and selling currency interview any other currency that the method of dealing in this market are based on pairs of currencies.
The couples are classified in this market compared to the U.S. dollar into two types:
* Major currencies:
A corresponding dollar currencies such as euros, pounds, francs, yen.
ERU / USD
GBP / USD
USD / CHF
USD / JPY
* Currency called the intersections:
The other currencies among themselves and is not a party to the dollar.
Such as: EUR / GBP
GBP / JPY
And so on
And deal with this market a very large number of traders, including the most influential are the central banks and international brokerage firms, banking institutions, financial institutions, merchants, businessmen, governments and individuals.
The working hours of currency exchanges and their names UTC:
Sydney22:00
To
06:00
Tokyo00:00To20:00
London
08:00
To
17:00
New York13:00To21:00
The feature will be clear to us the currency market from the previous table, which indicates that the trading and trading in this market continues 24 hours a day except on Saturday and Sunday, which represent the weekend.
Method of trading in the forex market:
Are treated on the principle of financial LEVRAGE MARGIN elevator, which characterizes this market, where large traders can enter amounts of money relatively simple so that they can trade in this market.
For example, when you are trading with $ 1000 more pejorative than $ 100,000 deal in this market and the amount of insurance is reported as $ 1000 only. And is called here a decade.Examples of the buying and selling in this market:
First before buying and selling decisions on building shops by his analysis of the movement of currencies over the chart and technical analysisThe shops to buy in the low points and sell at the high points.Can also store sales in the high points and make purchases in low-lying areas.
Suppose you enter to buy two (Lot) on the EUR / USD 1.2410 at the point and then increased the price you sell at the point at 1.2420 will be the profit and loss account here in the following way:
Profit or loss = (sale price - purchase price) * size of the contract [* number of contracts
Profit or loss = (1.2420-1.2410) * 100,000 2
Profit or loss = $ 200
But the question here is what is the currency that you bought?
In the previous example, we buy the euro we have any to sell the dollar and then we had the sale of the euro, so we've bought the dollar,
When you hear the process of buying your next pair EUR / USD or USD / CHF currency, the intended purchase is the first currency and sell the second currency.
The same way in the sale. That is always going to talk on the face of the first pair.
--------
Another way to facilitate the process of profit and loss account are as follows:
Subtract the sales price of the purchase price and remove the comma from the output you will see the number of points
Then multiply it by 10 and multiply the number of contracts
Ie the selling price in the previous example = 1.2420
The purchase price in the previous example = 1.2410
1.2420-1.2410 = 0010 would be a clear separation of the points 10 points
Then multiply it by 10 to get the profit in dollars of the contract and then multiply the number of contracts
10 * 10 * 2 = $ 200
Another example of another pair yen / dollar
You sell at a point 109.10
When you lower the price to sell at 108.60
Total points here would be 109.10-108.60 = 50 points
50 points * 10 = $ 500 for a
What distinguishes the currency market:
* Currency market is that the top market in terms of volume of transactions daily business.
The possibility of trading in this market 24 hours a day / 5 days a week. And access to and investment in this market is not limited at all you can do hundreds of transactions a day easily and without limits.
Possibility of real-time trading in this market as it is running and the SPOT system is characterized by speed and estimated the shops to buy and sell quickly and if the purchase order entry and sale. Where the seller and the buyer in this market is in every moment.
This market, which also distinguishes it is not restricted to a specific destination in control of his movement, but this market is very large and can not be controlled easily and monopoly and manipulation of exchange rates in it.
The most important feature in the currency market is that there are two tracks to make a profit where you can sell in the event of falling currencies and then buying from the bottom and you can also purchase currency is rising and if you buy from the top.
* The existence of the leverage that allows you to trade in relatively small amounts.
Key features also, which must be taken into account before entering this market is the profit the very high and the corresponding high risk, it could be traded and the gains are so large and fantasy in this market in a very short time and also if you did not improve the stores to act with this market in terms of study and learn some basics and methods deal with it may incur large losses
Margin (Margin)
The introduction of margin of strategies and widespread in the world of finance and investment, this system is working to increase (purchasing power of the investor) and reduces the financial burden required to engage in trading operations in the global market.
The system margin (margin) depends directly on the leverage (everage) to calculate the investor, and in the following example we will explain the general idea of the system margin, God willing.
For example, if the one of the investors to open an account margin of $ 5000 and the leverage for this account 1:100, it means that the purchasing power of the investor will double to reach $ 500,000 bears only the $ 5,000 in the account and will not bear any additional financial burden .
And the sense more clear, if desired Almsttmervi sale or purchase of 100,000 €, for example, would need only $ 1000 Kmarzin to be able to trade in the amount of 100,000 €.
Example: Abdullah investor in global financial markets, and through his experience in this field and through analysis by Ioaill to read them, Abdullah believes that the exchange rate of pound sterling against the U.S. dollar (GBP / USD) will rise from 1.8645 to 1.8770, reaching levels in the days next few years. Abdallah decided that the process of buying £ 150,000 against the U.S. dollar. How will Abdullah of money to do the business process on the assumption that it has a trading account on margin leverage 1:100?
Margin requirement = total amount × Leverage = 150,000 × 0.01 = 1500 $
Abdullah will be using the amount of $ 1,500 from the account of its margin, to be able to buy £ 150,000 against the U.S. dollar on the exchange rate of 1.8645
And two days after the exchange rate of pound sterling against the U.S. dollar to 1.8733 parts Abdullah said he decided to sell the amount that was purchased.
What is the result of trading by the Abdullah? Profit or loss = (sale price - purchase price) × contract size × number of contracts = (1.8733-1.8645 × 150,000) = 1320 $
Note from the previous example that the system margin allows an investor the opportunity to enter and get great deals on the interest in full, and that by trading small amounts qualitatively. As this system reduces the financial burden required of the investor and increases the purchasing power of its own trading account.
And should note that the increase in expected earnings this Alastrtejah, will accompany the increased perceived risk for the same investment, in the case of unfulfilled expectations of the market - God forbid - and to reduce this risk we recommend always using the strategies of stop-loss when entering into any process of trading, and God help you! .__________________
