+ Reply to Thread
Page 1 of 655 1 2 3 11 51 101 501 ... LastLast
Results 1 to 10 of 6541

Thread: Introduction To Forex Trading

  1. #1
    My pips hand is weak
    ----
     
    McHenzy will become famous soon enough McHenzy will become famous soon enough McHenzy's Avatar
    Join Date
    Nov 2010
    Location
    Nigeria
    Gender:
    Male
    Posts
    179
    Accumulated bonus
    22.85 USD
    Thanks
    2
    Thanked 130 Times in 34 Posts

    Thumbs up Introduction To Forex Trading

    Here,we'll be going through with all the needed guide for Forex beginners. Feel to ask your questions.
    I'll be starting with:
    What is Forex?
    The foreign exchange ( currency or forex or FX) market exists wherever one currency is traded for another. It is by far the largest market in the world, in terms of cash value traded, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions.
    Retail traders (small speculators) are a small part of this market. They may only participate indirectly through brokers or banks The investor's goal in Forex trading is to profit from foreign currency movements. Forex trading or currency trading is always done in currency pairs.
    For example, the exchange rate of EUR/USD on Aug 26 th, 2003 was 1.0857. This number is also referred to as a "Forex rate" or just "rate" for short. If the investor had bought 1000 euros on that date, he would have paid 1085.70 U.S. dollars. One year later, the Forex rate was 1.2083 , which means that the value of the euro (the numerator of the EUR/USD ratio) increased in relation to the U.S. dollar.
    The investor could now sell the 1000 euros in order to receive 1208.30 dollars. Therefore, the investor would have USD 122.60 more than what he had started one year earlier. However, to know if the investor made a good investment, one needs to compare this investment option to alternative investments.
    At the very minimum, the return on investment (ROI) should be compared to the return on a "risk-free" investment. One example of a risk-free investment is long-term U.S. government bonds since there is practically no chance for a default, i.e. the U.S. government going bankrupt or being unable or unwilling to pay its debt obligation. When trading currencies, trade only when you expect the currency you are buying to increase in value relative to the currency you are selling.
    If the currency you are buying does increase in value, you must sell back the other currency in order to lock in a profit.
    Last edited by McHenzy; 11-26-2010 at 01:29 PM.

  2. <a href="">&#1060;&#1086;&#1088;&#1077;&#1082;&#1089; &#1087;&#1086;&#1088;&#1090;&#1072;&#1083;</a>
  3. The Following 32 Users Say Thank You to McHenzy For This Useful Post:

    akonbite (07-28-2012), alfredo (03-30-2011), ali002 (02-22-2013), AMASI (05-21-2014), atiqrehman (07-20-2012), azza51 (09-13-2012), boral (02-11-2014), chabibie (02-13-2011), dada (01-21-2011), fiedorich (07-11-2012), fireworks023 (07-29-2011), forexf (08-09-2013), fxjunky (08-07-2015), haiarocky (07-21-2012), hamrad (05-10-2014), haseebuddin (09-30-2013), Isafan87 (06-09-2012), Jakiul (07-20-2012), jova_always (05-29-2011), lights (05-09-2012), Mubariz (01-14-2014), saladin111 (08-19-2012), Shani_1 (09-25-2013), sohankhan (07-21-2012), sorana (07-25-2012), souravdgx (06-12-2012), stark23 (10-11-2013), SweetPrincess02 (05-09-2017), texco (06-25-2015), venki (12-31-2011), youngext (04-19-2012), zeraeign (02-17-2011)

  4. #2
    My pips hand is weak
    ----
     
    McHenzy will become famous soon enough McHenzy will become famous soon enough McHenzy's Avatar
    Join Date
    Nov 2010
    Location
    Nigeria
    Gender:
    Male
    Posts
    179
    Accumulated bonus
    22.85 USD
    Thanks
    2
    Thanked 130 Times in 34 Posts
    What Is Forex? contd

    An open trade (also called an open position) is a trade in which a trader has bought or sold a particular currency pair and has not yet sold or bought back the equivalent amount to close the position.

    However, it is estimated that anywhere from 70 %- 90 % of the FX market is speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency.

  5. The Following 4 Users Say Thank You to McHenzy For This Useful Post:

    jova_always (05-29-2011), kisor (09-22-2012), shezan690 (09-15-2012), zeraeign (02-17-2011)

  6. #3
    My pips hand is weak
    ----
     
    McHenzy will become famous soon enough McHenzy will become famous soon enough McHenzy's Avatar
    Join Date
    Nov 2010
    Location
    Nigeria
    Gender:
    Male
    Posts
    179
    Accumulated bonus
    22.85 USD
    Thanks
    2
    Thanked 130 Times in 34 Posts
    Pairs

    Forex is significantly different from other markets - in the sense that the currency of a country is traded AGAINST another country's currency. Unlike in a stock market or commodities market - you trade stock or commodity of its own value.

    Example: Euro is traded against US dollar - This is called a forex currency " pair" - this pair is commonly referred to as " EUR/USD".

    How the pair works:
    In the above EUR/USD pair If the European Economy is doing better than the US economy then EURO gains in value AGAINST US dollar if the US economy is doing better then European economy then USD gains value AGAINST Euro. To keep matters simple, all forex brokers and banks refer to Euro USD pair as EUR/USD (not USD/EUR).

  7. The Following 7 Users Say Thank You to McHenzy For This Useful Post:

    ambar ali (10-14-2012), chabibie (02-13-2011), fiedorich (07-11-2012), Isafan87 (06-09-2012), jova_always (05-29-2011), YinYang (04-07-2014), zeraeign (02-17-2011)

  8. #4
    My pips hand is weak
    ----
     
    McHenzy will become famous soon enough McHenzy will become famous soon enough McHenzy's Avatar
    Join Date
    Nov 2010
    Location
    Nigeria
    Gender:
    Male
    Posts
    179
    Accumulated bonus
    22.85 USD
    Thanks
    2
    Thanked 130 Times in 34 Posts
    Trading pairs

    Now that we know what a currency pair is - let's look at how it is traded. In any given pair:
    1 . the first currency is called a Base Currency
    2 . The second currency is called Quote Currency or Counter Currency When you place a "buy" order for this currency pair (eur/usd) - you are actually BUYING Euro and SELLING US dollar . on the other hand, if you place a "sell" order for this currency pair (eur/ usd) - you are actually SELLING Euro and BUYING US dollar .

    Instant recap: In a "buy" order you BUY base currency and sell quote currency of any given pair. In a "sell" order you SELL base currency and buy quote currency of any given pair.

    ANY QUESTIONS??
    Last edited by McHenzy; 11-26-2010 at 06:27 AM.

  9. The Following 5 Users Say Thank You to McHenzy For This Useful Post:

    2waqar (09-19-2012), ambar ali (10-14-2012), fiedorich (07-11-2012), jova_always (05-29-2011), zeraeign (02-17-2011)

  10. #5
    Forex in the blood
    ----
     
    zuma4good will become famous soon enough zuma4good's Avatar
    Join Date
    Nov 2010
    Posts
    286
    Accumulated bonus
    19.70 USD
    Thanks
    33
    Thanked 49 Times in 17 Posts
    how do i know when to buy?

  11. #6
    My pips hand is weak
    ----
     
    McHenzy will become famous soon enough McHenzy will become famous soon enough McHenzy's Avatar
    Join Date
    Nov 2010
    Location
    Nigeria
    Gender:
    Male
    Posts
    179
    Accumulated bonus
    22.85 USD
    Thanks
    2
    Thanked 130 Times in 34 Posts
    contd

    Reading forex quotes:
    Let's jump right into it - here's how a EUR/USD pair quote looks like:

    1.3396

    did you say huh?! - good!!! you are on the right track!

    Let's decipher: It takes 1.3396 US dollars (quote currency) to buy the 1 EURO (base currency)

    Hope you figured out why the second currency is called Quote currency - all forex quotes are given in the quote currency
    Here are few forex quotes:
    (a) USD/JPY = 123.53 (jpy=japanese yen)
    It takes ______ of _________ to buy _________

    (b) GBP/USD = 1.9801 (gbp=british pound)
    It takes ______ of _________ to buy _________

    (c) USD/CHF = 1.2409 (chf=swiss franc)
    It takes ______ of _________ to buy _________

    Try to answer them first and then see the answers below.
    Forex Majors:
    Four forex currency pairs are called Forex Majors - they are:

    * EUR/USD - Euro / US dollar
    * GBP/USD - British Pound vs US dollar
    * USD/JPY - US dollar vs Japanese yen
    * USD/CHF - US dollars vs Swiss franc

    These currencies are considered to be stable currencies in the world.

    Now that we figured out the forex currency pairs and how they work - let's figure how to make money trading them Meaning and Value of a PIP >>
    Answers:
    (a) USD/JPY = 123.53
    It takes 123.53 japanese Yen to buy 1 US dollar

    (b)GBP/USD = 1.9801
    it takes 1.9801 US dollars to buy 1 british pound

    (c)USD/CHF = 1.2409
    it takes 1.2409 swiss francs to buy 1 US dollar

  12. The Following 3 Users Say Thank You to McHenzy For This Useful Post:

    clairienz (02-13-2012), jova_always (05-29-2011), zeraeign (02-17-2011)

  13. #7
    My pips hand is weak
    ----
     
    McHenzy will become famous soon enough McHenzy will become famous soon enough McHenzy's Avatar
    Join Date
    Nov 2010
    Location
    Nigeria
    Gender:
    Male
    Posts
    179
    Accumulated bonus
    22.85 USD
    Thanks
    2
    Thanked 130 Times in 34 Posts
    Forex Leverage and Spreads

    Forex Leverage and Forex Spreads are TWO distinct features of Forex Market.

    Let's deal with Forex Spread first.

    A spread is the difference between BUY and SELL price of a currency pair.

    Your broker will give you TWO different prices for the same currency pair - example:

    Eur/Usd: 1.5586 (sell) and 1.5589 (buy)

    so, if you want to SELL the EUR/USD currency (because you think USD dollar is going to go up) - then you will be able to sell it at 1.5586

    IF you are going to BUY the EUR/USD currency(because you think EURO is going up) - then you wil be able to buy it at 1.5589

    The difference between buy and sell (1.5589-1.5586) = 3 pips is called the SPREAD.

    Spread is basically the broker's fee for opening your trade.

  14. The Following 3 Users Say Thank You to McHenzy For This Useful Post:

    jova_always (05-29-2011), Shani_1 (09-25-2013), zeraeign (02-17-2011)

  15. #8
    My pips hand is weak
    ----
     
    McHenzy will become famous soon enough McHenzy will become famous soon enough McHenzy's Avatar
    Join Date
    Nov 2010
    Location
    Nigeria
    Gender:
    Male
    Posts
    179
    Accumulated bonus
    22.85 USD
    Thanks
    2
    Thanked 130 Times in 34 Posts
    Choosing a Forex Broker and a Charting package

    These are TWO distinct subjects.


    1. Forex Broker (who handles your transactions and keeps a record of them)
    2. Charting Package (a tool that fits your personality)



    Okay, here's a radical idea: you DON'T have to use your forex broker's charts. Radical maybe a stretch but from what we gathered most people use (atleast for the lack of creativity) the broker's charting package.

    Between your broker and charting package - your broker would be the first one you'd boot (let go) - then your charting package.

    Yes! its important to have a reliable broker - who has enough NET assets that allows the brokerage to liquidate your account easily.

    However, your charting package is the "DECISION MAKER" - you make your decisions based on what the charts are showing you and your ability to read them correctly.

    It is VERY important to get a charting package - which has atleast a few of the following:


    1. Tools that you know you need (will use).
    2. Tools that you MIGHT want to use in your back-testing
    3. Tools that generate "alerts" when needed - for example, you might have drawn what you think is an IMPORTANT support or resistance on the chart - what good is it gonna do you - if it doesn't "ring a bell" when the market hits that price? - maybe your in the other room - or maybe you on the same computer reading an interesting article about Obama vs McCain (?) - shouldn't your charting package "alert" you of a moving market?
    4. I personally would prefer a package that would alert me a few PIPS - BEFORE my support or resistance is hit - either it can make noise on my computer or send me a text message - so far, I am yet to realize this joy in my life.
    5. You also need a charting package that doesn't use much of your computer's resource - who wants something that freezes up your computer every now & then?
    6. Last but not the least - you will need something that you "enjoy" or atleast "tolerate" looking at - that's only achievable if the charting package allows you to change backgrounds, candlestick colors, trendline, channel colors etc..


    Prepare a list of "what my charting package SHOULD be" - and then compare it with what's available. Take them for a test drive - almost all of the package subscriptions can be taken for a test drive - just make sure to cancel them (if you don't like it)

    Forex Brokers on the other hand - the only test drive you can do - is use their demo accounts - and "feel" their trading platform and execution.

    All the best in your setup.

  16. The Following User Says Thank You to McHenzy For This Useful Post:

    jova_always (05-29-2011)

  17. #9
    My pips hand is weak
    ----
     
    McHenzy will become famous soon enough McHenzy will become famous soon enough McHenzy's Avatar
    Join Date
    Nov 2010
    Location
    Nigeria
    Gender:
    Male
    Posts
    179
    Accumulated bonus
    22.85 USD
    Thanks
    2
    Thanked 130 Times in 34 Posts
    Meaning and value of a PIP

    Meaning and value of a Price interest point - PIP. It is the lowest denominator in currency trading - the actual value of a pip is based on your type of account - usually for

    # standard accounts - ONE pip=$10
    # for mini accounts - ONE pip=$1

    Before we get into this more - let's cover some topics that will make it easier for you to understand and appreciate the value of a PIP.

  18. The Following 4 Users Say Thank You to McHenzy For This Useful Post:

    Alok (06-08-2011), jova_always (05-29-2011), Shani_1 (09-25-2013), zenzy (06-02-2012)

  19. Fb
  20. #10
    My pips hand is weak
    ----
     
    McHenzy will become famous soon enough McHenzy will become famous soon enough McHenzy's Avatar
    Join Date
    Nov 2010
    Location
    Nigeria
    Gender:
    Male
    Posts
    179
    Accumulated bonus
    22.85 USD
    Thanks
    2
    Thanked 130 Times in 34 Posts
    Now we will be taking a look at Entries and Exits

    Placing an order

    Ok! you are ready to place an order - you might think what's the big deal - I will click a few buttons and its done! - technically, yes its just pushing few buttons - but you should look for few things before you become click-happy.

    First things first. What type of order would you like to place? - huh?! - ok here are two types.

    * Market Order
    * Entry Order



    Market Order: literally means that - you are in the market and you see something that you want - you place an order - just like buying groceries - you only order when you are in the market (I know, I know you can order groceries online now - sheesh!! its hard to come with analogies these days - he!he!)

    Your market order is placed IMMEDIATELY!! - remember that - you won't have time to second guess or debate your strategy - nothing - you say you want it - they'll give it to you.

    Its one thing to buy a few tomatoes and throw them away without using them (we all did that at some point in life) - its another thing to buy currency - you will have to live with the consequences.

    If you get my drift - you'd probably guess that i'd say: Market order is NOT a good idea.

    Entry Order On contrary Entry order is setting criteria for your order to be executed - you are telling your broker/trading platform - that you need to get in "IF AND ONLY IF" - the market reaches this point (say 1.9500 in gbp/usd - buy me in).

    The beauty of this is - you can second guess and even remove your order without ANY penalities - if you think that you might have a made a mistake or something happens to the market and it starts going the other way - get out - without any loss - its easier to end a trade before you are in the market - than otherwise - if you are in the market, you will have to deal with emotions & the sort.

    Again, your chance of second guessing is only limited till the time the order is execucted - that is till the market reaches the point you specified.

    Entry order - gives you time to set your Stop-order, trailing stop and even limit order - and you can walk away knowing that your order will be executed - except in rare occasions such as "news" - they you might get filled at a later point - say at 1.9525 instead of 1.9500 following the above example.

    TIP: its never a good idea to fill in order at a round number (like 1.9500) - always do it just below or above it. Why you ask? - because round numbers tend to act as support and resistance by default - not everytime - but they do take on that role involuntarily.

    What is a stop loss??

    Stop loss or stop order is a point in the market where you tell your forex broker to take you out of the market when you order isn't going the way you expected.

    Let's look at an example for EUR/USD pair:

    You are placing an Entry order:

    * You want to buy order @ 1.3400: cause you believe that the market will move up when it hits 1.3400
    * Now, if the market comes down INSTEAD of going up - you want to save your capital. So, you tell your forex broker (using your trading station software) that you want to be removed from the market if the market comes down 1.3350 - THIS IS CALLED AS A STOP LOSS.


    Trading forex is not just about winning - yes! you need to place winning trades - but it is also about cutting your losses when you placed a wrong trade.

    Stop loss is mechanical and does not have any emotions - however, most people once they placed the order - keep moving the stop loss - this is a VERY BAD IDEA.

    Stop loss is provided for ONE single purpose - to remove you from the market when it isn't going the way you predicted - thus saving your capital and this allowing you to place more trades.

    in conclusion STOP LOSS is just that - it STOPS your LOSSES.

    Stop loss is the opposite of LIMIT ORDER

    What is a trailing stop??

    Trailing stop simply put "is the number of pips the market should move your stop-order"

    Let's say you place a buy-order for gbp/usd at 1.9500 - and the your stop-order is at 1.9450 (stop-order is nothing but stop-here-and-get-me-out-of-the-trade order)

    Scene 1: A few hours (mins) later you realize that your order started making your profit - the market moved up to 1.9575 - profit = 75 pips.

    Scene2: You return again - after a few more hours - and see that the market is now at 1.9620 - netting you a profit of sweet 120 pips.

    Now, let's see what happens with the trailing stop:

    scene # Opened at: stop-order Trailing Stop Current Market Price Profit-locked
    1 1.9500 1.9450 50
    2 1.9500 1.9500 50 1.9550 0
    Notice when the market hit 1.9550 (50 pips from your original opening price) - the trailing stop which was also set at 50 - moved your stop-order up to 1.9500 - so should the market turn around come back to 1.9500- your order would be removed with NO LOSS to you.
    3 1.9500 1.9500 50 1.9575 0
    The market went further to reach 1.9575 - 25 pips more than scene #2 - but since it has not reached 50-pips from the scene #2 - you stop-order is still at 1.9500
    5 1.9500 1.9550 50 1.9600 50
    Now, the market moved to 1.9600 - that's 100 pips away from your opening price - the stop-order has been moved to 1.9550 - locking in 50 pips. However, you won't get out of the trade unless the market reaches 1.9550 - say the market keeps moving up to 1.9650...
    6 1.9500 1.9600 50 1.9650 100
    If the market reached 1.9650 - you would have locked in 100 pips profit - again, your trade is not closed yet - you just locked the profits - the market could still go up and give you more profit or turn back and close your trade for a sweet 100 pips profit.
    7 1.9500 1.9600 50 1.9650 100
    The setting is same as scene #6 - you locked 100 pips in profit, but look at the trade - at this point when the market is at 1.9650 - thats 150 pips profit - if you close the trade NOW. 50 pips more than your locked-profit. Since, we don't expect to be at the computer all day - you can use LIMIT order to get out here - making an extra 50 pips that just using trailing stop.



    Now all this profit would have been lost - if you didn't use trailing stop - the market could have hit 1.9625 - that's 125 pips from your opening price and turned right around and came back to test 1.9500 again - its wise to lock in your profits.

    Again, if you think that the market has certain potential - which you happen to know - based on daily-range or other variables - you can use "limit order" - which we discuss in the next lesson - as an exit for your order.

    However, we stronly recommend that you use BOTH the trailing stop (which cannot be used without a stop-order) - and a Limit order - you have better chance of making profit - albeit small - a profit is still a profit - who knows, you might actually hit your limit order and make the "desired" profit - which we should be first to tell you - doesn't happen always - but it DOES happen - its not impossible.

    We Should Digest this till I see response.....

  21. The Following 14 Users Say Thank You to McHenzy For This Useful Post:

    akonbite (07-28-2012), ali002 (02-22-2013), ehteshan (03-08-2014), Golden pen (05-07-2012), gunaseo (08-04-2013), herryssd (05-17-2013), Jakiul (07-21-2012), jova_always (05-29-2011), Keed0 (04-01-2014), mangesh1234 (07-29-2012), shahzad (08-23-2011), Shani_1 (09-25-2013), sumii (09-26-2013), UDDIN (02-10-2013)

+ Reply to Thread

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
Forex Forum Nigeria Presentation
You are welcome to the Forex Forum Nigeria serving as a virtual salon for communication of traders of all levels. Forex is a dynamically developing financial market which is open 24 hours a day. Anyone can get access to this market via a brokerage company. On this forum you can discuss the numerous advantages of trading on the currency market and all aspects of online trading on MetaTrader4 and MetaTrader5 platforms.

Forex Forum Nigeria Trading discussions
Every forumite can join a discussion of various issues, including those related to Forex but not limited to. The forum has been designed for sharing opinions and helpful information and is open for both professionals and beginners. Mutual assistance and tolerance are highly appreciated. If you would like to share you experience with others or deepen your knowledge of trading craft, you are most welcome to the forum threads dedicated to trading discussions.

Forex Forum Nigeria Dialogue between brokers and traders (about brokers)
In order to be successful on Forex, it is crucial to choose a brokerage company with due diligence. Make sure you broker is really reliable! Thus you will be impervious to many risks and will make profitable trades on Forex. On the forum a rating of brokers is represented; it is based on comments left by their customers. Post your opinion about the brokerage company you work with, it will help other traders avoid mistakes and choose a good broker.

Unleashed communication on Forex Forum Nigeria
On this forum you can talk about not only trading issues, but any other topics you like. Offtopping is allowed in a special thread too! Humour, philosophy, social problems or practical wisdom converse about anything you are interested in, including forex trading if you like!

Bonuses for communication on Forex Forum Nigeria
Those who post messages on the forum can receive money bonuses and use them for trading on an account of a forum sponsor. The forum is not meant for gaining profit; however forumites can get these small bonuses as reward for the time spent on the forum and sharing views on the currency market and trading.