forex analysis
Online Forex Trading System Training: How to make a trade in Forex
Forex is the abbreviated name of foreign exchange. The Forex market is a non-stop, where the In the cash market of nations are bought and sold, often through intermediaries. For example, you buy Euros, paying with U.S. dollars, euros or sell the Japanese yen. The value of your forex investment increases or decreases due to changes in the exchange rate or currency rate. These changes can occur any time, and often result from economic and political factors, as the price of oil or political unrest. This article describes the different stages of making a trade Forex.
Before continuing, let's review the basics of currency analysis. Market participants generally use Forex analysis as a means to predict price movements for change. Analysis of the currency is divided into two types: fundamental and technical. A fundamental analysis uses economic factors and policies as a way of predicting currency movements. The technical analysis uses reliable historical data as a means of forecasting these movements. The analyst Technical believes that history repeats itself again and again. Some Forex traders depend on fundamental analysis while others depend on technical analysis. However, many successful Forex traders use a combination of both strategies. The important point here is that there is a strategy or a combination of strategies never is 100% secure.
Now we can proceed to the consideration of the different steps of making a Forex trading.
Through a combination of fundamental and technical analysis, thinks the euro will rise against the U.S. dollar due to economic developments. To activate the currencies of foreign trade, have to buy euros with U.S. dollars. Therefore, the currency pair in Forex trading are the Euro and the U.S. dollar.
After determining the volume or quantity currency you wish to inflict achieve. You decide to buy 1 lot of euros to U.S. dollars. 1 lot equals 100,000 units of the base. Also, 2 lots are equal to 200,000 units from the base, 3 lots are equal to 300,000 units from the base, and so on.
Then check the price bid and ask prices of EUR / USD. As the market exchange, the Forex market is the buying and selling. The offer is the price you can sell. The question is the price you can buy. The purchase / sale or simply spread is the distance between the bid and ask prices. In the Forex market, this gap is usually expressed in pips.
For Forex trading, we assume that the bid price is 1.2362 and the selling price is 1.2365. This means you can you can sell 1 lot (100,000 units) for $ 123,620 Euros or you can buy 1 lot for $ 123,650 euros. In this example, the gap between demand and supply prices is 3 points (1.2365 to 1.2362 = 3 pips).
As mentioned above, decided to buy 1 lot $ 123,650 euros. However, finding $ 123,650 to buy 100,000 euros. You can buy 1 EUR lot, with a margin of 1% at a price of 1.2365 and wait until prices rise.
The margin is described as the necessary guarantees to facilitate trade in Forex. Usually, this is a very small part of the whole agreement, 1% or 1:100. For this example, the margin would be $ 1236.50. Note that the margin is a double edged sword. Without proper use of risk management tools described then you can suffer serious losses and gains.
You determine stop-loss and take profit rate. A stop sale order is a market order to close Forex position if or when losses reach the threshold set in advance. In order to take benefits is a market order to close a Forex position if or when profits reach a set limit. We strongly urge you to take advantage of stop loss and take profit in options trading Forex. Use of profit taking or stop the loss of options, your case will automatically close when and if such rate occurs in the market.
Suppose you have a pre-set rates 1.3575 benefits. Three days later, the euro rises against the U.S. dollar. Your deal closes automatically when the benefits reach the threshold previously. You now have $ 12,100 or $ 135,750 more than what you started with three days earlier.
Let's look at another scenario. Suppose you have a pre-established stop loss rate 1.2165. Two days later, the euro fell against the U.S. dollar. Your bid is automatically closed when losses reach the threshold set in advance. In this example, you now have $ 121,650, which is $ 2,000 less than they started two days earlier.
Forex Trading on margin carries a high level of risk, and may not suit all investors. The high degree of leverage can work against you as well as for you. Before deciding invest in foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore should not invest money you can not afford to lose.
About the Author
Gregory DeVictor is a consultant who has been developing and marketing web sites since 1999. Through a series of easy-to-understand Forex trading courses, you can receive the proper training needed to develop a simple but powerful Forex trading system at: http://www.forex-trading-system.name
FOREX Technical Analysis 23.02.2010