LESSON-03

Ex 3: Profitable sell trade.

look at the above prices, lets assume that the USD is going to be stronger within another 3 hrs cause of a major news. then you will buy the USD (meaning you will sell the pair) definitely at 1.3293 price, well things happened and the time is running.............after another 20 hrs the price runs to 1.3193.

                                                                                , well now you got a profit of 100 pips (1.3293-1.3193), 100$ in cash if you invest 1$ per pip.

NOTE: Always keep in mind, if you want to buy the USD then you have to SELL the pair.

            from other side if you want to buy the EUR then you have to BUY the pair.

Ex 4: Loosing sell trade.

look at the above prices, lets assume that the USD is going to be stronger within another 3 hrs cause of a major news. then you will buy the USD (meaning you will sell the pair) definitely at 1.3293 price, well things happened and the time is running.............after another 20 hrs the price runs to 1.3393.

                                                         ok now you got the idea and now you can describe me well about the above trade.

                                     you lost 100 pips and you lost 100$ (if you invest 1$ per pip).ok now you have the basic trading point. and you know how to make  sell/buy orders.in our next lesson we are discussing about trading entries (before you jump have to think twice).

                                                 

LESSON-02

Well now you know the BUY price and the SELL price? if you dont know please click here.
ok now its time to get in to the MARKET and will execute some  trades.....are you ready??

Ex 1: Profitable buy trade.

look at the above prices, lets assume that the USD is going to be weaker within another 3 hrs cause of a major news. then you will buy the EUR (meaning you will buy the pair) definitely at 1.3296 price, well things happened and the time is running.............after another 20 hrs the price runs to 1.3396 ,

                                                                                          well now you got a profit of 0.0100 (1.3396-1.3296), what is  0.0100  ???

                                                  Which is your profit and we are calling it as PIPS, well you have recieved 100 PIPS, from other hand if you recieved 0.0050, 0.0025, 0.0001 or 0.0000 figures then your profit would  set as 50 pips,25 pips,1 pip and 0 pip respectively.

                                                                              now we have to check the profit in real money, before you buy or sell a currency pair the broker will ask the investment amount...........read the below conversation.

BROKER :  how may i help you sir?

CLIENT   :  I would like to buy EUR/USD at 1.3296

BROKER : Ok how much you are going to invest FOR A PIP sir?

CLIENT   :  I would like to invest 1$ for a pip.

BROKER :  Well your trade has been executed and our spread is 3 PIPS sir.

CLIENT   :  Its ok thank you.

let us assume that the above client as you, and your profit would be 100$ (100 PIPS X 1$).

What is the spread?

The spread is the amount of pips between the bidding price and the asking price is called the spread. The spread is what forex brokers use to make money on every forex trade placed through their network. For example, the forex broker may be paying a price of 1.3600 for buying or selling. The broker will then allow you to buy the currency for 1.3601 or sell it for 1.3599. The spread always stays around the actual price that the forex broker is paying. So when you buy, you get one end of the spread and when you sell you get the other end of it, and vice versa. By the time you close your trade, you will have always paid the spread.

                                        

Ex 2 : Loosing buy trade.

look at the above prices, lets assume that the USD is going to be weaker within another 3 hrs cause of a major news. then you will buy the EUR definitely at 1.3296 price, well things happened and the time is running.............after another 20 hrs the price runs to 1.3196 ,

                                                                                          well now you got a loss of 0.0100 (1.3296-1.3196), what is 0.0100  ???

                                                  Which is your loss and  you have lost 100PIPS.so if you invested 1$ for a pip, meaning that you have lost 100$.

I hope above two examples have given you a basic knowledge of profitable & loosing buy trades, if you need more help please make me a comment n im happy to help you. in our next post we are discussing about the profitable & loosing sell trades.

LESSON-01

The Forex Trading Bid & Ask Prices and Spread

This page covers everything you need to know about the bid and ask prices in the online Forex trading market, From the definition of Forex bid & ask prices, to the use of the bid & ask spread.

A Forex Trading Bid price is the price at which the market is prepared to buy a specific currency pair in the Forex trading market. This is the price that the trader of Forex buys his base currency in. In the quote, the Forex bid price appears to the left of the currency quote. For example, If the EUR/USD pair is 1.3293/96, then the bid price is 1.3293. Meaning you can sell the EUR for 1.3293 USD.

A Forex asking price is the price at which the market is ready to sell a certain Forex Trading currency pair in the online Forex market. This is the price that the trader buys in. It appears to the right of the Forex quote. For example, in the same EUR/USD pair of 1.3293/96, the ask price us 1.3296. This means you can buy one EUR for 1.3296 USD.

The Forex bid & ask spread represents the difference between the purchase and the sale rates. This signifies the expected profit of the online Forex Trading transaction. The value of Bid/Ask Spread is set by the liquidity of a stock. If the stock is highly liquid, it means many stock units are being bought and sold, and the Forex bid/ask spread will be lower. Traders prefer foreign currency with a lower bid/ask spread, because it means their money pair only for the currency and is not wasted on the bid/ask spread difference. A lower Forex bid/ask spread allows the trader to cut down on his losses.

Well i think now you all got the idea about bid and ask price  right? if not make me a comment and ill describe you briefly. in our next post we are talking about the trading process. good luck.

Before we start lessons!!!

Now what? You have a profitable trading system and solid Money Management rules. Is that enough? The answer is simple. If your psychology allows you to follow the system and abide to the Money Management rules then the answer is positive. Otherwise, the negative balance will constitute a proof of fear and panic dominating all over your mind.always keep this in your mind.

well here is a brief illustrated guide to understand the market trading method,
ok will first move to the vegetable market and there are buyers, sellers & vegetables, buyers will pay money to sellers and buying vegetables from sellers, now the transaction is completed and the trade has been done.
                                                               

Well that is vegetable market , in that market selling vegetable only ,here we now moving to forex mkt to see what they are selling!!! its very quite simple and its just only MONEY. In forex mkt (fx mkt) buying and selling only different countries money and money to money.

Ex :Eur for Usd

      Jpy for Aud 

      Usd for Cad

                                but currencies are traded by pairs....whats the meaning of that?? here we go

#What is the meaning of EUR/USD=1.3300  ????

Meaning :To buy 1 EUR, you have to pay 1.33 $, yes thats all and it represents that how much $ you have to pay to by an EURO.

#What is the meaning of USD/CAD=0.9900   ????

Meaning :To buy 1 $, you have to pay 0.9900 CAD, thats it.

                                                                      From other words we are buying and selling MONEY to MONEY in this forex market.

OK now you will wonder , cause there are two prices which is bid price and the ask price.(if you have any questions please just make me a comment), but i talk with you only one price ,all right now we discuss about bid and ask price briefly, BUT we are talking about this on my next post..bye..bye!

What you should know before you get on board.

Lately, currencies have been on a rollercoaster ride with record breaking highs and lows. The world of foreign exchange is dominating news headlines; but what does it mean, and more importantly, what do you need to know before you get on board?

First of all, it's important that you understand that trading the Foreign Exchange market involves a high degree of risk, including the risk of losing money. Any investment in foreign exchange should involve only risk capital and you should never trade with money that you cannot afford to lose.

You may have noticed that the value of currencies goes up and down every day. What most people don't realize is that there is a foreign exchange market - or 'Forex' for short - where you can potentially profit from the movement of these currencies. The best known example is George Soros who made a billion dollars in a day by trading currencies. Be aware, however, that currency trading involves significant risk and individuals can lose a substantial part of their investment. As technologies have improved, the Forex market has become more accessible resulting in an unprecedented growth in online trading. One of the great things about trading currencies now is that you no longer have to be a big money manager to trade this market; traders and investors like you and I can trade this market.

How is Forex traded?

The mechanics of a trade are virtually identical to those in other markets. The only difference is that you're buying one currency and selling another at the same time. That's why currencies are quoted in pairs, like EUR/USD or USD/JPY. The exchange rate represents the purchase price between the two currencies.

Example:The EUR/USD rate represents the number of USD one EUR can buy. If you think the Euro will increase in value against the US Dollar, you buy Euros with US Dollars. If the exchange rate rises, you sell the Euros back, and you cash in your profit. Please keep in mind that forex trading involves a high risk of loss.

Important: be aware of the risks:

Finally, it cannot be stressed enough that trading foreign exchange on margin carries a high level of risk, and may not be suitable for everyone. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. Remember, you could sustain a loss of some or all of your initial investment, which means that you should not invest money that you cannot afford to lose.

                                                                              well this is how the risk involved in forex, but dont be scared we will guide you to be a top quality professional trader like us in the future articles.

                                                               before starting our lessons please check our signal providing strategy performance on zulu trade to make trust & confidence on us.our signal provider ID is Eur/Jpy-jumbo and here is the story above top right corner, please check it.

What is Forex?

Forex is a commonly used abbreviation for "foreign exchange," and it is typically used to describe trading in the foreign exchange market by investors and speculators.

For example, imagine a situation where the U.S. dollar is expected to weaken in value relative to the euro. A forex trader in this situation will sell dollars and buy euros. If the euro strengthens, the purchasing power to buy dollars has now increased. The trader can now buy back more dollars than they had to begin with, making a profit.

This is similar to stock trading. A stock trader will buy a stock if they think its price will rise in the future and sell a stock if they think its price will fall in the future. Similarly, a forex trader will buy a currency pair if they expect its exchange rate will rise in the future and sell a currency pair if they expect its exchange rate will fall in the future.

The foreign exchange market is a global decentralized marketplace that determines the relative values of different currencies. Unlike other markets, there is no centralized depository or exchange where transactions are conducted. Instead, these transactions are conducted by several market participants in several locations. It is rare that any two currencies will be identical to one another in value, and it's also rare that any two currencies will maintain the same relative value for more than a short period of time.  In forex, the exchange rate between two currencies constantly changes.

For example, on January 3, 2011, one euro was worth about $1.33.  By May 3, 2011, one euro was worth about $1.48.  The euro increased in value by about 10% relative to the U.S. dollar during this time.

WHY DO EXCHANGE RATES CHANGE?

Currencies trade on an open market, just like stocks, bonds, computers, cars, and many other goods and services. A currency's value fluctuates as its supply and demand fluctuates, just like anything else.

• An increase in supply or a decrease in demand for a currency can cause the value of that currency to fall.
• A decrease in the supply or an increase in demand for a currency can cause the value of that currency to rise.

A big benefit to forex trading is that you can buy or sell any currency pair, at any time subject to available liquidity. So if you think the Eurozone is going to break apart, you can sell the euro and buy the dollar (sell EUR/USD). If you think the price of gold is going to go up, based on historical correlation patterns you can buy the Australian dollar and sell the U.S. dollar (buy AUD/USD).

This also means that there really is no such thing as a "bear market," in the traditional sense. You can make (or lose) money when the market is trending up and down.

OK HERE WE GO IN BRIEF TO THE MARKET

If you’ve ever traveled to another country, you usually had to find a currency exchange booth at the airport, and then exchange the money you have in your wallet (if you’re a dude) or purse (if you’re a lady) or man purse (if you’re a metrosexual) into the currency of the country you are visiting.

You go up to the counter and notice a screen displaying different exchange rates for different currencies. You find “Japanese yen” and think to yourself, “WOW! My one dollar is worth 100 yen?! And I have ten dollars! I’m going to be rich!!!” (This excitement is quickly killed when you stop by a shop in the airport afterwards to buy a can of soda and, all of a sudden, half your money is gone.)

When you do this, you’ve essentially participated in the forex market! You’ve exchanged one currency for another. Or in forex trading terms, assuming you’re an American visiting Japan, you’ve sold dollars and bought yen.

Before you fly back home, you stop by the currency exchange booth to exchange the yen that you miraculously have left over (Tokyo is expensive!) and notice the exchange rates have changed. It’s these changes in the exchanges rates that allow you to make money in the foreign exchange market.

The foreign exchange market, which is usually known as “forex” or “FX,” is the largest financial market in the world. Compared to the measly $22.4 billion a day volume of the New York Stock Exchange, the foreign exchange market looks absolutely ginormous with its $5 TRILLION a day trade volume. Forex rocks our socks!

Let’s take a moment to put this into perspective using animations…

The largest stock market in the world, the New York Stock Exchange (NYSE), trades a volume of about $22.4 billion each day. If we used a mouse to represent NYSE, it would look like this,

You hear about the NYSE in the news every day… on CNBC… on Bloomberg…on BBC… heck, you even probably hear about it at your local gym. “The NYSE is up today, blah, blah”. When people talk about the “market”, they usually mean the stock market. So the NYSE sounds big, it’s loud and likes to make a lot of noise.

But if you actually compare it to the foreign exchange market, it would look like this…

Oooh, the NYSE looks so puny compared to forex! It doesn’t stand a chance!

Check out the graph of the average daily trading volume for the forex market, New York Stock Exchange, Tokyo Stock Exchange, and London Stock Exchange:

The currency market is over 200 times BIGGER! It is HUGE! But hold your horses, there’s a catch!

That huge $5 trillion number covers the entire global foreign exchange market, BUT retail traders (that’s us) trade the spot market and that’s about $1.49 trillion. So you see, the forex market is definitely huge, but not as huge as the media would like you to believe.

Do you feel like you already know what the forex market is all about? We’re just getting started! In the next article we’ll reveal WHAT exactly is traded in the forex market, BYE BYE!