Forex is one of the greatest hommy work opportunity to make money. It gives an opportunity to make money from the comfort of your home and spending the time with family at the same time.
It is also an opportunity which you can do along with your existing day job. Forex means foreign exchange and Forex trading means is the trading between foreign exchanges.
Forex trading requires some knowledge about the way the Forex market runs. You have to learn about he factors both local and the global which affects the market.
If you want to succeed in this particular trading you must have the knowledge about the basics and facts.
Global Forex Trading offers the chance to deal in real time online currency trading that makes millions of forex brokers become more rich every day.
Global Forex Trading has less publicity that stock and commodities market and even the futures, even more than $2 trillion of currencies are transacted every day on the global forex market.
Compared to stocks and shares or commodity markets that have specific opening and ending trading times. At the same tim, Forex markets are available for trading anytime with price of currencies changes and fluctuates everytime.
Forex trading has become an extremely popular way to trade the global market, the largest and most liquid market in the world.
The Forex Trading market is open 24 hours a day. Forex trading also gives free commission and available on more than 60 currencies worldwide.
Global forex trading boasts that they provide the only forex trading platform that is suitable for both beginners and professionals.
Forex Trading has no restrictions of getting profits no matter what the market condition.
Nowday, the Global Forex Trading is available not only for the large investors but the smaller one can take a part too.
Leverage is the main key and powerful tool to Forex Trading wealth. You should have a good education in Forex trading to reach gain and profits consistently.
In Forex trading, you can get a leverage of 20 to 50 times commonly up to 100% margin in some special cases. In stocks or shares, you may be able to get it of 50 - 70% of your stocks or shares.
Leverage is the main key and powerful tool to Forex Trading wealth. You should have a good education in Forex trading to reach gain and profits consistently.
With that leverage comparison, you may be able become a millionaire fastest in Forex trading.
All things you need to know and learn it up in Forex trading ; knowing risk level - how much you are willing to lose, understanding the different forex trading systems as technical and fundamental and research the trading systems which you can be familiar with how they work.
Also learning the trading trends, price history, support and resistance lines, familiar with the fundamental economic factors and its issues that effect to the Forex market.
Global forex trading is something not many people consider for investment - because of less information - but worldwide forex trading continues and become more and more popular recently.
Individuals all over the world are investing in the Forex market and gaining thousands of dollars every day.
Wednesday, May 6, 2009
Forex Tools: The Trendy and Judicious way of Forex Trading
Forex trading system of the world performs trade of about $2 trillion each day. The enormity of the gigantic financial capacity of the forex trade can be truly grasped if you compare this mammoth amount to the $25 billion that New York Stock Exchange trader's trade per day.
The quintessential qualities of a forex trader are discipline and endeavor. If you are diligent and logical in studying the forex market trends then it wouldn't take you much time to hit the jackpot in Forex trade. However, if you cannot manually manage to analyze all the currency trends yourself then you might take the help of a automatic signal service or a forex trading software which would send you alerts and signals about buying and selling currency after elaborate research and analysis.
If you use one of the automated Forex tools available in the market then you would be able to evaluate the trends of exchange rates and forex market conditions within a few minutes with the help of the data provided by your FX software. As a result you will be able to close your forex deal in less than an hour. Thus an automated forex tool would ensure that you are making optimum use of your trading time.
The global forex trading market is only merely remarkable because of the huge volume of monetary transactions that happens through it but it is also a commendable phenomenon due to its geographical dispersion. With the help of automated FX software you can trade in various local as well as international forex markets within different time zones without personally monitoring those various markets day in and day out.
However, before you decide to buy particular FX software, you need to put in a little effort to search for a forex tool which is easy to use and is ideal for beginners. Glean information about that particular forex tool which you plan to buy and thoroughly read the testimonials for that particular forex trading software before you purchase it. If you really want to test the accuracy of your Forex trading robot then you must try to find forex trading software which has the ability to paper trade too.
The quintessential qualities of a forex trader are discipline and endeavor. If you are diligent and logical in studying the forex market trends then it wouldn't take you much time to hit the jackpot in Forex trade. However, if you cannot manually manage to analyze all the currency trends yourself then you might take the help of a automatic signal service or a forex trading software which would send you alerts and signals about buying and selling currency after elaborate research and analysis.
If you use one of the automated Forex tools available in the market then you would be able to evaluate the trends of exchange rates and forex market conditions within a few minutes with the help of the data provided by your FX software. As a result you will be able to close your forex deal in less than an hour. Thus an automated forex tool would ensure that you are making optimum use of your trading time.
The global forex trading market is only merely remarkable because of the huge volume of monetary transactions that happens through it but it is also a commendable phenomenon due to its geographical dispersion. With the help of automated FX software you can trade in various local as well as international forex markets within different time zones without personally monitoring those various markets day in and day out.
However, before you decide to buy particular FX software, you need to put in a little effort to search for a forex tool which is easy to use and is ideal for beginners. Glean information about that particular forex tool which you plan to buy and thoroughly read the testimonials for that particular forex trading software before you purchase it. If you really want to test the accuracy of your Forex trading robot then you must try to find forex trading software which has the ability to paper trade too.
How to Trade Foreign Currencies With Market Participants
In the financial sector, the business of how to trade foreign currency has become one of the most promising and much sought after money-making endeavor. This is mostly because the business can give you immediate results depending on how much time you devote on it and what types of networks you have.
But getting into the foreign currency trading business requires you some thorough knowledge first before you get right down to it. You should first understand what it is and why there is a need to conduct such business. Foreign currency trading happens primarily because countries around the world have differing monetary values. If you look at it closely, you will realize that currency trading is really just as the name suggests-you swap your currency with that of another.
The world of foreign currency trading is very dynamic and involves different market participants. These participants are the people who are vital to making the entire business of foreign currency trading work. They involve all crucial aspects from both the private and public side. Each of these entities has a say in how currencies are exchanged and priced based from current market values:
1. Centralized Banks - These institutions are often tied up with the government. Some are even the main financial institutions in a particular country. Although they do not often directly buy or sell the currencies, they are still known to actively participate in the market. The main purpose of central banks is to provide a practical influence over the course of the trade. You can use these institutions to refer your current values and take advantage of low-priced currency trades as soon as they hit their values.
2. Actual Customers - These are directly the people who would most likely need the aid of new currencies. Aside from considering individuals who might need immediate currencies in exchange for what they have, you should also direct your attention to big businesses involved in the financial services industry. You can also try targeting those who are publicly listed companies which are known to be heavily involved in making stock investments.
3. Foreign Currency Trading Brokers - These are people who live and breathe the market. They are key persons because they are the go-to professionals when you want all the help you need to make fast and big currency transactions. They are more than just your average currency trader. They also make use of a combination of many other foreign currency trading methods such as scalping the market, day trading, to name a few. However, if you choose to work with them you must be prepared to let them in on the profits you make as they mostly require a certain amount of commission in every sell.
Getting along with these market participants is pretty easy to do. You just need to learn about their ways and read about them as much as you can. These market participants can also have a big impact on how your currency trading business will profit.
But getting into the foreign currency trading business requires you some thorough knowledge first before you get right down to it. You should first understand what it is and why there is a need to conduct such business. Foreign currency trading happens primarily because countries around the world have differing monetary values. If you look at it closely, you will realize that currency trading is really just as the name suggests-you swap your currency with that of another.
The world of foreign currency trading is very dynamic and involves different market participants. These participants are the people who are vital to making the entire business of foreign currency trading work. They involve all crucial aspects from both the private and public side. Each of these entities has a say in how currencies are exchanged and priced based from current market values:
1. Centralized Banks - These institutions are often tied up with the government. Some are even the main financial institutions in a particular country. Although they do not often directly buy or sell the currencies, they are still known to actively participate in the market. The main purpose of central banks is to provide a practical influence over the course of the trade. You can use these institutions to refer your current values and take advantage of low-priced currency trades as soon as they hit their values.
2. Actual Customers - These are directly the people who would most likely need the aid of new currencies. Aside from considering individuals who might need immediate currencies in exchange for what they have, you should also direct your attention to big businesses involved in the financial services industry. You can also try targeting those who are publicly listed companies which are known to be heavily involved in making stock investments.
3. Foreign Currency Trading Brokers - These are people who live and breathe the market. They are key persons because they are the go-to professionals when you want all the help you need to make fast and big currency transactions. They are more than just your average currency trader. They also make use of a combination of many other foreign currency trading methods such as scalping the market, day trading, to name a few. However, if you choose to work with them you must be prepared to let them in on the profits you make as they mostly require a certain amount of commission in every sell.
Getting along with these market participants is pretty easy to do. You just need to learn about their ways and read about them as much as you can. These market participants can also have a big impact on how your currency trading business will profit.
Important Points in Understanding Foreign Exchange Trading
Understanding foreign exchange trading is key to becoming successful in this particular business. There are many different entities and key notes that are corollary to trading foreign currencies. While the business may be promising, success only happens when you allot some time to get to know it much better. Before you delve deeper into what forex can actually do for you, it is important that you learn first about these important points:
Trading Methods
Foreign currency trading utilizes different types of trading methods which has their own disadvantages and advantages. Perhaps the most popular is the spot currency trading method. This type of trading happens between the buyer and the seller at varied periods of time. There really is no way to figure out when a spot currency trading will occur. But one notable characteristic of this type of trading method is that it requires immediate action with the prices coming up at a later time. Meaning, it is advised that buyers keep their preferred rates until the sellers present theirs first.
Another type of trading method being used and more popular among big businesses is the option trading method. This makes use of a future trading mechanism wherein both parties agree to trade at a specific date or for a specified period of time. However, the option trading strategy only gives the buyers and sellers the right to make the purchase but it does not require them to trade. At any time, they may also choose to drop off from the agreement.
Buying and Selling
Aside from trading methods, understanding foreign exchange trading is also important in terms of its buying and selling practices. You should note when specific types of target market buy and when do traders opt to sell their currencies on hand. Identifying niche markets is important so that you can plot your business plans accordingly. Also, there are a lot of factors which can potentially affect the buying and selling behavior of foreign exchange customers.
To help identify buying and selling patterns, you should also keep yourself abreast of the current economic situation. The forex market is often closely tied with anything related to finance since it is the key tool that operates this particular industry niche. Along with this, you should also consider observing trade speculators. These people are known for spotting the most convenient times to trade and as such, they end up profiting from low value bought but high-selling currencies.
Operating Round the Clock
Understanding foreign exchange trading also means you have to be prepared to work around the clock. This is also the reason why getting a forex software is often strongly advised so you can automate your business. Of course as a person you also have other things to attend to, and having a forex trading software allows you that freedom. You can also choose to work with a forex broker to help you scan and scout the market for possible trade opportunities. Working with another professional is always a great way to expand your horizons.
Trading Methods
Foreign currency trading utilizes different types of trading methods which has their own disadvantages and advantages. Perhaps the most popular is the spot currency trading method. This type of trading happens between the buyer and the seller at varied periods of time. There really is no way to figure out when a spot currency trading will occur. But one notable characteristic of this type of trading method is that it requires immediate action with the prices coming up at a later time. Meaning, it is advised that buyers keep their preferred rates until the sellers present theirs first.
Another type of trading method being used and more popular among big businesses is the option trading method. This makes use of a future trading mechanism wherein both parties agree to trade at a specific date or for a specified period of time. However, the option trading strategy only gives the buyers and sellers the right to make the purchase but it does not require them to trade. At any time, they may also choose to drop off from the agreement.
Buying and Selling
Aside from trading methods, understanding foreign exchange trading is also important in terms of its buying and selling practices. You should note when specific types of target market buy and when do traders opt to sell their currencies on hand. Identifying niche markets is important so that you can plot your business plans accordingly. Also, there are a lot of factors which can potentially affect the buying and selling behavior of foreign exchange customers.
To help identify buying and selling patterns, you should also keep yourself abreast of the current economic situation. The forex market is often closely tied with anything related to finance since it is the key tool that operates this particular industry niche. Along with this, you should also consider observing trade speculators. These people are known for spotting the most convenient times to trade and as such, they end up profiting from low value bought but high-selling currencies.
Operating Round the Clock
Understanding foreign exchange trading also means you have to be prepared to work around the clock. This is also the reason why getting a forex software is often strongly advised so you can automate your business. Of course as a person you also have other things to attend to, and having a forex trading software allows you that freedom. You can also choose to work with a forex broker to help you scan and scout the market for possible trade opportunities. Working with another professional is always a great way to expand your horizons.
Types of Foreign Exchange Trading Education
Getting a foreign exchange trading education is very important. You need to understand that the foreign currency trading game changes every time. It is very dynamic and things can change faster than you think they will. The best you can do is to keep yourself abreast of the latest in the trading field. Learning about the ins and outs of forex is also one efficient way of gaining experience in it. It's not enough that you trade and face so many other business professionals. It's also great to get a third party perspective on how things work.
Knowing more about the currency trading game is easier when you know the theories and the technicalities that surround it. You can choose to enroll into a specific course or you can also do some self-studying through the internet as well. Either way, choose the learning method which you think will suit you best.
Foreign Exchange Trading Education for Free
So you want to know how to learn about forex the free way? All you need is lots of time and patience to scan the internet. You can take advantage of article directories and search for relevant articles talking about forex. However, do not expect that you will get plenty of information from these articles. Most of those published in article directories are practical reads. If you want a quick fix of forex then that's the best place to be. But if you want to learn about everything technical and in-depth, you can try visiting forex sites set up by organizations in the trade. You can also check out websites of financial institutions.
Being a member of forum sites is also a great way to learn about forex. Most of the entrepreneurs who dabble in foreign currency trading are more than happy to inform people about their experiences and give insights on growing market trends. Forums are also a great venue for meeting like-minded people in terms of business. You can also start threads in such forums about the different things you would like to learn about forex that you are yet to fully understand.
Considering a Formal Forex Course
If you find that you want a more cohesive approach to learning about forex, then you can also opt to enroll in some short courses. There are lots of distance learning modules being offered online so you can conveniently learn about forex depending when you can sit down and focus on it. Some experts also hold workshops for forex trading. These last for a few days and may give out certificates upon accomplishing the said workshop.
Just make sure that you have the budget and the time for this type of foreign exchange trading education. Consider this method as a surefire investment in the game. Learning about forex through a systematized course allows you to start from the most basic up to the complex parts of forex trading. This method also helps you focus more since there is a point person who tracks your progress.
Knowing more about the currency trading game is easier when you know the theories and the technicalities that surround it. You can choose to enroll into a specific course or you can also do some self-studying through the internet as well. Either way, choose the learning method which you think will suit you best.
Foreign Exchange Trading Education for Free
So you want to know how to learn about forex the free way? All you need is lots of time and patience to scan the internet. You can take advantage of article directories and search for relevant articles talking about forex. However, do not expect that you will get plenty of information from these articles. Most of those published in article directories are practical reads. If you want a quick fix of forex then that's the best place to be. But if you want to learn about everything technical and in-depth, you can try visiting forex sites set up by organizations in the trade. You can also check out websites of financial institutions.
Being a member of forum sites is also a great way to learn about forex. Most of the entrepreneurs who dabble in foreign currency trading are more than happy to inform people about their experiences and give insights on growing market trends. Forums are also a great venue for meeting like-minded people in terms of business. You can also start threads in such forums about the different things you would like to learn about forex that you are yet to fully understand.
Considering a Formal Forex Course
If you find that you want a more cohesive approach to learning about forex, then you can also opt to enroll in some short courses. There are lots of distance learning modules being offered online so you can conveniently learn about forex depending when you can sit down and focus on it. Some experts also hold workshops for forex trading. These last for a few days and may give out certificates upon accomplishing the said workshop.
Just make sure that you have the budget and the time for this type of foreign exchange trading education. Consider this method as a surefire investment in the game. Learning about forex through a systematized course allows you to start from the most basic up to the complex parts of forex trading. This method also helps you focus more since there is a point person who tracks your progress.
Sunday, May 3, 2009
Forex Trading Education - The London Open Checklist
A thorough Forex trading education must include an understanding of the effect market timings can have on trading and liquidity.
One of the most active periods of the day is from the time the London market opens. Often around that time good trading opportunities will appear.
As part of your Forex trading education, learn to analyze market conditions around London open and begin to recognize good setups.
The following questionnaire and checklist will help.
London Open Preparation
About 15 to 30 minutes before London open check the answers to these questions:
- Are the MACD indicators on the 4 hour and 1 hour charts in agreement? If they are not going in the same direction be very careful!
- Is there MACD divergence on the 4 hour, 1 hour, or 15 minute chart? Look for other clues to confirm that price may go in the direction of MACD divergence.
- On the 4 hour chart what is the overall trend?
- Do a Fibonacci calculation on the last swing high and low and see if price is pulling back to an optimum retracement level or whether it is reaching a key extension level.
- Note price in relation to the 200 EMA (Exponential Moving Average) on the 4 hour, 1 hour and 15 minute charts. Is price bucking the trend? In other words, is price above the 200 EMA on the 4 hour and 1 hour chart but below it on the 15 minute? Then be prepared for price to go long at some stage. (Draw the opposite conclusion if price is below the 200 EMA on the 4 hour and 1 hour chart but above it on the 15 minute chart.)
- Are any Economic Reports imminent?
- As the candle closes on the 15 minute chart at London open, do you see any distinctive candle patterns such as tweezers, or doji's or hammers indicating price exhaustion?
- If I entered a trade right now in a particular direction, what would be the risk and where would I place my stop?
Within a few minutes of London open, if you see a number of factors converging from the analysis above, make a decision one way or the other:
- trade
- wait for clearer signals or a better entry point
Carrying out an analysis in this way each day at London open will do much to increase your Forex trading education.
It will make you aware of what is happening on the charts and in the marketplace and help you to arrive at conclusions.
There is no magic formula involved with Forex trading education. Put simply, successful Forex trading is the result of years of hard work, study, practice, and experience often gained through painful trading scenarios.
Eventually the newer trader learns mental discipline, and how to control the emotions - probably the biggest part of a Forex trading education.
Practice a procedure like the one above day after day and begin to see some progress as you get nearer the time you make profits consistently from currency trading.
One of the most active periods of the day is from the time the London market opens. Often around that time good trading opportunities will appear.
As part of your Forex trading education, learn to analyze market conditions around London open and begin to recognize good setups.
The following questionnaire and checklist will help.
London Open Preparation
About 15 to 30 minutes before London open check the answers to these questions:
- Are the MACD indicators on the 4 hour and 1 hour charts in agreement? If they are not going in the same direction be very careful!
- Is there MACD divergence on the 4 hour, 1 hour, or 15 minute chart? Look for other clues to confirm that price may go in the direction of MACD divergence.
- On the 4 hour chart what is the overall trend?
- Do a Fibonacci calculation on the last swing high and low and see if price is pulling back to an optimum retracement level or whether it is reaching a key extension level.
- Note price in relation to the 200 EMA (Exponential Moving Average) on the 4 hour, 1 hour and 15 minute charts. Is price bucking the trend? In other words, is price above the 200 EMA on the 4 hour and 1 hour chart but below it on the 15 minute? Then be prepared for price to go long at some stage. (Draw the opposite conclusion if price is below the 200 EMA on the 4 hour and 1 hour chart but above it on the 15 minute chart.)
- Are any Economic Reports imminent?
- As the candle closes on the 15 minute chart at London open, do you see any distinctive candle patterns such as tweezers, or doji's or hammers indicating price exhaustion?
- If I entered a trade right now in a particular direction, what would be the risk and where would I place my stop?
Within a few minutes of London open, if you see a number of factors converging from the analysis above, make a decision one way or the other:
- trade
- wait for clearer signals or a better entry point
Carrying out an analysis in this way each day at London open will do much to increase your Forex trading education.
It will make you aware of what is happening on the charts and in the marketplace and help you to arrive at conclusions.
There is no magic formula involved with Forex trading education. Put simply, successful Forex trading is the result of years of hard work, study, practice, and experience often gained through painful trading scenarios.
Eventually the newer trader learns mental discipline, and how to control the emotions - probably the biggest part of a Forex trading education.
Practice a procedure like the one above day after day and begin to see some progress as you get nearer the time you make profits consistently from currency trading.
Forex Glossary
Ask Price ¨C Sometimes called the Offer Price, this is the market price for traders to buy currencies. Ask Prices are shown on the right side of a quote ¨C e.g. EUR/USD 1.1965 / 68 ¨C means that one euro can be bought for 1.1968 UD dollars.
Bar Chart ¨C A type of chart used in Technical Analysis. Each time division on the chart is displayed as a vertical bar which show the following information ¨C the top of the bar is the high price, the bottom of the bar is the low price, the horizontal line on the left of the bar shows the opening price and the horizontal line on the right of bar shows the closing price.
Base Currency ¨C is the first currency in a currency pair. A quote shows how much the base currency is worth in the quote (second) currency. For example, in the quote - USD/JPY 112.13 ¨C US dollars are the base currency, with 1 US dollar being worth 112.13 Japanese yen.
Bid Price ¨C is the price a trader can sell currencies. The Bid Price is shown on the left side of a quote - e.g. EUR/USD 1.1965 / 68 ¨C means that one euro can be sold for 1.1965 UD dollars.
Bid/Ask Spread ¨C is the difference between the bid price and the ask price in any currency quotation. The spread represents the broker's fee, and varies from broker to broker.
Broker ¨C the intermediary between buyer and seller. Most FOREX brokers are associated with large financial institutions and earn money by setting a spread between bid and ask prices.
Candlestick Chart - A type of chart used in Technical Analysis. Each time division on the chart is displayed as a candlestick ¨C a red or green vertical bar with extensions above and below the candlestick body. The top of the extension shows the highest price for the chart division and the bottom of the extension shows the lowest price. Red candlesticks indicate a lower closing price than opening price, and green candlesticks indicate the price is rising.
Cross Currency ¨C A currency pair that does not include US dollars ¨C e.g. EUR/GBP.
Currency Pair ¨C Two currencies involved in a FOREX transaction ¨C e.g. EUR/USD.
Economic Indicator ¨C A statistical report issued by governments or academic institutions indicating economic conditions within a country.
First In First Out (FIFO) ¨C refers to the order open orders are liquidated. The first orders to be liquidated are the first that were opened.
Foreign Exchange (FOREX, FX) ¨C Simultaneously buying one currency and selling another.
Fundamental Analysis ¨C Analysis of political and economic conditions that can affect currency prices.
Leverage or Margin ¨C The ratio of the value of a transaction to the required deposit. A common margin for FOREX trading is 100:1 ¨C you can trade currency worth 100 times the amount of your deposit.
Limit Order ¨C An order to buy or sell when the price reaches a specified level.
Lot ¨C The size of a FOREX transaction. Standard lots are worth about 100,000 US dollars.
Major Currency ¨C The euro, German mark, Swiss franc, British pound, and the Japanese yen are the major currencies.
Minor Currency ¨C The Canadian dollar, the Australian dollar, and the New Zealand dollar are the minor currencies.
One Cancels the Other (OCO) ¨C Two orders placed simultaneously with instructions to cancel the second order on execution of the first.
Open Position ¨C An active trade that has not been closed.
Pips or Points ¨C The smallest unit a currency can be traded in.
Quote Currency ¨C The second currency in a currency pair. In the currency pair USD/EUR the euro is the quote currency.
Rollover ¨C Extending the settlement time of spot deals to the current delivery date. The cost of rollover is calculated using swap points based on interest rate differentials.
Technical Analysis ¨C Analysis of historical market data to predict future movements in the market.
Tick ¨C The minimum change in price.
Transaction Cost ¨C The cost of a FOREX transaction ¨C typically the spread between bid and ask prices.
Volatility ¨C A statistical measure indicating the tendency of sharp price movements within a period of time.
Bar Chart ¨C A type of chart used in Technical Analysis. Each time division on the chart is displayed as a vertical bar which show the following information ¨C the top of the bar is the high price, the bottom of the bar is the low price, the horizontal line on the left of the bar shows the opening price and the horizontal line on the right of bar shows the closing price.
Base Currency ¨C is the first currency in a currency pair. A quote shows how much the base currency is worth in the quote (second) currency. For example, in the quote - USD/JPY 112.13 ¨C US dollars are the base currency, with 1 US dollar being worth 112.13 Japanese yen.
Bid Price ¨C is the price a trader can sell currencies. The Bid Price is shown on the left side of a quote - e.g. EUR/USD 1.1965 / 68 ¨C means that one euro can be sold for 1.1965 UD dollars.
Bid/Ask Spread ¨C is the difference between the bid price and the ask price in any currency quotation. The spread represents the broker's fee, and varies from broker to broker.
Broker ¨C the intermediary between buyer and seller. Most FOREX brokers are associated with large financial institutions and earn money by setting a spread between bid and ask prices.
Candlestick Chart - A type of chart used in Technical Analysis. Each time division on the chart is displayed as a candlestick ¨C a red or green vertical bar with extensions above and below the candlestick body. The top of the extension shows the highest price for the chart division and the bottom of the extension shows the lowest price. Red candlesticks indicate a lower closing price than opening price, and green candlesticks indicate the price is rising.
Cross Currency ¨C A currency pair that does not include US dollars ¨C e.g. EUR/GBP.
Currency Pair ¨C Two currencies involved in a FOREX transaction ¨C e.g. EUR/USD.
Economic Indicator ¨C A statistical report issued by governments or academic institutions indicating economic conditions within a country.
First In First Out (FIFO) ¨C refers to the order open orders are liquidated. The first orders to be liquidated are the first that were opened.
Foreign Exchange (FOREX, FX) ¨C Simultaneously buying one currency and selling another.
Fundamental Analysis ¨C Analysis of political and economic conditions that can affect currency prices.
Leverage or Margin ¨C The ratio of the value of a transaction to the required deposit. A common margin for FOREX trading is 100:1 ¨C you can trade currency worth 100 times the amount of your deposit.
Limit Order ¨C An order to buy or sell when the price reaches a specified level.
Lot ¨C The size of a FOREX transaction. Standard lots are worth about 100,000 US dollars.
Major Currency ¨C The euro, German mark, Swiss franc, British pound, and the Japanese yen are the major currencies.
Minor Currency ¨C The Canadian dollar, the Australian dollar, and the New Zealand dollar are the minor currencies.
One Cancels the Other (OCO) ¨C Two orders placed simultaneously with instructions to cancel the second order on execution of the first.
Open Position ¨C An active trade that has not been closed.
Pips or Points ¨C The smallest unit a currency can be traded in.
Quote Currency ¨C The second currency in a currency pair. In the currency pair USD/EUR the euro is the quote currency.
Rollover ¨C Extending the settlement time of spot deals to the current delivery date. The cost of rollover is calculated using swap points based on interest rate differentials.
Technical Analysis ¨C Analysis of historical market data to predict future movements in the market.
Tick ¨C The minimum change in price.
Transaction Cost ¨C The cost of a FOREX transaction ¨C typically the spread between bid and ask prices.
Volatility ¨C A statistical measure indicating the tendency of sharp price movements within a period of time.
