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Getting Started Trading Forex
The Essential Guide Before Start Trading Forex:
FOREX guide has already been explained previously on the basis of forex for beginners on this block, for a more in depth again on the basis of forex it is better you have to understand about the first step before you plunge into the Forex market. In the Forex market we buy or sell currency. Where trade mechanism is very similar to other markets in general, which we sell at current market prices rise and buy when the market price down. So it is quite simple, and you will have no difficulty in doing forex trading. The purpose of trading forex is expecting that prices will change where you buy a currency that appreciates in value, so you make a profit from the difference between these values.
Example Trade EUR USD
You purchase 10,000 euros at the pair EUR / USD at the exchange rate of 1:18 +10.000 -11.800 *
1 week later, you redeem 10,000 back into US dollars at the exchange rate of 1.2500. -10.000 + 12.500 **
You earn $ 700 profit. 0 +700
The exchange rate / Rate is the ratio of one currency against another currency assessed.
For example, the exchange rate USD / CHF indicates how many US dollars can purchase one Swiss franc, or how many Swiss francs you need to buy one US dollar.
Writing pair / forex pairs are always written in pairs, such as GBP / USD or USD / JPY. The reason why they are written in the pattern of the pair, is because in every foreign exchange transaction we are simultaneously buying one currency and selling another.
Here is an example of the exchange rate for the pound versus the US dollar: GBP / USD = 1.7500 The first listed currency to the left of the slash ( "/") is known as the base currency (in this example, the British pound), while the second on the right is called the counter currency (in this example, the US dollar).
When buying, the exchange rate tells you how much you have to pay to buy one unit of the base currency. In the example above, you have to pay 1.7500 US dollar to buy 1 British pound.
In forex trading, you are going to buy a pair / pair if you believe the base currency will rise or rise. And conversely, you would sell the pair if you think the base currency will depreciate (go down) relative to the counter currency.
Forex transactions
Buy, Sell, Spread and how to read the quotes on Forex.
Forex world can not be separated from Buy and Sell (Buy and Sell). Every trader has the freedom to do one action on which he right to make a profit. Buy can also be paired with the Bid or Sell Long and paired with the Offer or Short. So if you read an article about forex and there is mentioned Bid or Long term, do not be confused because the two terms are synonymous with a Buy or Buy.
Reading quotes is easy in fact described above. But if we do not understand can be confusing as well. Quotes on forex transactions is usually written in conjunction with his pairs and always changing with the market from time to time (running / real time).
I read quite as simple as that previously described:
The first currency mentioned is the currency of his base (base currency)
Base currency value is always 1.
Just as an example of a currency pair pound versus the US dollar: GBP / USD which has been described previously, to more clearly about pairs or currency pair I gave the example again as pairs of the dollar USA versus the Swiss franc, for example: USD / CHF 1.4623 means that one US dollar is worth 1.4623 Swiss Francs. If the dollar on the next time the value of the USD / CHF 1.4630 it means that the US dollar gained 7 points because it can buy more Swiss Franc.
Every two pairs displayed price is the purchase price (bid) and selling price (offer). The difference between the two is called the spread. So, if we use the example above, USD / CHF 1.4623 / 28, it means the selling price of the US Dollar is 1.4623 Swiss Franc and the purchase price is 1.4628. Spread here the value 5 (..28 - .. 25 = 5).
Spread is determined by the broker and its value varies from one broker to another. The smaller the spread the better for investors. In brokerage we refer have competitive spreads, such as the MB Trading (spread corresponding market) and Gain Capital (spread fix).
Examples shown below are a variety of existing Currency Pairs Forex market:
pairs
If you are a novice in the world of Forex, then you will encounter many difficulties in living and met many foreign terms that sound strange ears. For it was on this blog have set up a quick, easily understood, complete and practical about forex trading.
Buy / Sell (Buy / Sell)
In forex trading terms that are commonly used are:
Buy or Long or Buy: If you think the base currency will rise.
Sell or Short or Sell: If you think the base currency will go down.
Difference Supply and Demand (Bid / Ask Spread)
Offer (Bid) is the price at which you as a trader will sell the base currency.
Request (Ask) is the price at which you as a trader would buy the base currency.
The bid price is always lower than the demand, and the difference is often called Spread. In forex trading broker in this difference is usually to take advantage as the cost of their services.
Close / Close Transactions
Once you buy a pair, you will surely be sold again to realize profits. Well in this case forex popularly called by the Close.
So:
If you Originally Buy, to close means CLOSE (Sell)
If you Originally Sell, to close means CLOSE (Buy)
Good to here you have studied primary Element in forex trading are:
Buy / Sell, Close, Bid / Ask, Quote / Pairs (Currency Pairs) and Spread
Next, let's see how we can make money from forex trading
Advantages / money from forex trading
Let's look at an example of a general price quote is displayed in an online forex trading system.
GBP-USD
Seen above that forex spreads on the pair GBP / USD, the bid price is 1.2800 and the ask price is 1.2804.
Such as when you estimate the value of the GBP will rise / climb.
Then you take a position BUY / buy GBP / USD at 1.2804
After some time, the price changed (See the view below)
GBP.-USD
Here we can see that what you predicted correctly. And the value of the GBP / USD moves up.
Well, now is your chance to be able to realize a profit by doing CLOSE (Sell), so Close (Sell) GBP / USD at 1.2820
So from 1 trading earlier gains that you earn are:
1.2820 - 1.2804 = 16 Pip (Pip is the smallest price movement available in a currency).
Good, now the question is, what if it turns out the price of GBP / USD move against / does not match your estimates. (See the view below)
.- GBP, USD
If you do CLOSE (sell) at this position. means:
1.2770 - 1.2804 = -34 Pip (you lose 34 Pip)
Well, when you perform CLOSE, this is up to your analysis.
Is the GBP / USD may continue to fall (preferably close now to minimize losses), or you believe the GBP / USD will go up (do not close right now, waiting to climb back to a profit (+))
Simple is not it ...
So Pip means that you earn here is the profit / money for YOU.
Furthermore, what is the value for money from Pip acquired. ??
Pip will be equivalent to the money / dollar, depending on the number of lots, large contracts, as well as the leverage that you use.
Illustration calculations assuming that use standard contracts.
Profit ($) = Difference X Contract Size ($) X Lot
So from the above example, Profit ($) = 1.2820 - 1.2804 (16 Pip) x 100,000 ($) x 1 = $ 160
The advantage for us today is, on average all platforms / brokers trading software have made the process automatic calculations above seacara.
So we can easily find out the equivalent to our advantage without the need to bother counting again.
