WHAT IS FOREX?

WHAT IS FOREX?

Forex Trading is trading currencies from different countries against each other. Forex is acronym of Foreign Exchange.

For example, in Europe the currency in circulation is called the Euro (EUR) and in the United States the currency in circulation is called the US Dollar (USD). An example of a forex trade is to buy the Euro while simultaneously selling US Dollar. This is called going long on the EUR/USD.

Forex trading is typically done through a broker or market maker. As a forex trader you can choose acurrency pair that you expect to change in value and place a trade accordingly. For example, if you had purchased 1,000 Euros in January of 2005, it would have cost you around $1,200 USD. Throughout 2005 the Euro’s value vs. the U.S. Dollar’s value increased. At the end of the year 1,000 Euros was worth $1,300 U.S. Dollars. If you had chosen to end your trade at that point, you would have a $100 gain.

Forex trades can be placed through a broker or market maker. Orders can be placed with just a few clicks and the broker then passes the order along to a partner in the Interbank Market to fill your position. When you close your trade, the broker closes the position on the Interbank Market and credits your account with the loss or gain. This can all happen literally within a few seconds.

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TARDING SYSTEM

TARDING SYSTEM

Trading System 1 - Know the dangerous areas in your account

Now I am going to tell you the method to earn benefits without losing your money. You may remember the last simple way I described. I hope you might have trained it a bit. It’s ok as far as you do it with Demo accounts. But from here onwards Demo accounts will be of no use. In one aspect you will have difficulties to understand. In the other way it’s difficult for me to explain it. Now you can start a real account and there is no need to be afraid. If there is anybody who have learnt bits and pieces from somewhere else, its better if they will start from the beginning. 

Then it will be easy for you. If you have any problems, please ask from me via Skype. I don’t want any of you to be lost.

Exclude the risks

You have got to know that we work according to these details in order to remote the risks involved.

Account Leverage - 200:1

Main Investment - $ 100

Buy Price - 1.5900

Volume - 0.01

I have told you about mountain system. Those were my experiences, not somebody’s ideas. You might have seen its success. I am talking in this article about the reduction of risks involved. This is very important. Those who worked with Demo accounts used 0.1 as the lowest measure. But in real accounts that we deal with more often have a lowest value of 0.01. Therefore those who do small trading get a good benefit out of this. If you don’t remember the way to do it, go to Basic Trading 3 and read that article again. It’s about taking a part of the amount you invested. Just like taking 1 lakh out of invested 10 lakhs. Also we have to see how much will be used out of our invested money with regards to USD. We withdraw using USD in Forex Market. Remember that for the rest of your carrier. Rupees will be used only when you use it from here. Let’s see how much will be there in the market if we use 1 lakh.

GBP is 1.5900 in the market as we assume now.

USD Lot 1 = 100,000 (Read it in last articles if you need).

100,000 x 1.5900 = $ 159,000 will be needed for a Lot. (Leverage is not done).

As leverage is 200:1 the real value will be,

$ 159,000 / 200 (200 : 1)  = $ 795 (For a lot, we need 795$, But we buy only 0.01.)

In Demo accounts it will be 795/10= 79.5 (Lots are divided in to 10 units)

In real accounts it will be 795/100=7.95 (Lots are divided in to 100 units)

Divide the value in 100and get the price in USD.

Now you can calculate the amount required to open a new trade at 0.01 levels.

I hope that you can understand the calculations done to find the amount of money we need to open an account. You have to know about Lots before everything. Also Pips concept is very important.

You know what Pips is now. If you have problems read this article Basic Trading 2 . I have explained it clearly in the end of that article. Those who invest 100$ will find the number of Pips there in it. If you invest more, please calculate it. You need this value to know many parameters as it is the one which is used to show ups and downs of the market.

If we can find the value of a Pip or if we can find the number of Pips in our investment, we can easily calculate the other measures. See whether you can calculate it?

Normally if you open a trading using this Lot size using your Demo account, you will get a benefit or a loss of 0.1USD. Imagine that using GBP/USD, 0.01 Lot Size we have ordered a Buy at 1.5900. Then you will see the way profits and losses shown by the software. When market goes up to 1.5930 you get a profit of 30 Pips. It’s in the same way I described you early. If Pips will go up you’ll get a profit and if it goes down, you’ll get a loss. Now you have a profit of 30 Pips. That means you have got a 3$ profit from this trading.

$ 0.1(The profit or loss for Pip) x Pips 30 = $ 3

See it for yourself. Open a trading from your account for a 0.01 Lots and check whether you get the profits and losses for 1 or 0.1 Pips. If you get 30 Pips loss, which means you lost 3$. We are now proceeding to see the area we have to deal within. It’s called Trading area.

Trading Area

This is the real area that we can trade within in relation to the invested amount of money. We can deal within this area. New comers should be aware about that, more than others. We determined the Pips value for Lots as well as USD amount invested in market per a Pip. Let’s try to find the Pips area we get if we invest 100$. It’s our trading zone. Pips go up and down. So we have to see the value from Pips as it shows the changes.

If we get 0.1$ for a Pip at 0.01 level, how many Pips are needed for 100$.

100/0.1=1000 (The total no of Pips we get)

Now you know the area and you know that we have 1000 Pips in the trading account. Let’s think that you have opened a Buy order at 1.5900. You have 1000 Pips area to save this order. In other words, your account will remain only up to 1000 Pips change if the market prices will change drastically. So you have the chance to save it up to 1.4900. If it goes further down, your trade will be lost. If it doesn’t happen nothing will happen. But this is not relevant to the profits. Your area is limitless there. If you open 2 trades, your trade will have half of the previous area of trading. So it will be 500. Therefore at 1.5400 your account will be lost. Then you can see why people lose their money. This is an essential part that you should know.

Some people invest 50$ to see whether they can earn with Forex. So there safe area will be very low. As the investment goes down, so does the safe zone of trading.

I have shown you some examples here.

$ 50 = 500

$ 100 = 1000

$ 200 = 2000

$ 500 = 5000

$ 1000 = 10,000

That’s why I tell you to invest more money in the account in order to win in this field. You’ll have a high safe area and also in profit earning, you will have a very high profits as well. Ask me if you have any questions.

BASIC TRADING 4

BASIC TRADING 4

Basic Trading 4 (Market Prices)

I have written another article soon after the previous one. I thought that many people have questions about market trends. It is an important topic. Let’s talk about that. See whether you can answer these and if you can’t, go and check out the previous articles.

1. Can you explain Forex?
2. What do we do with it?
3. Can you explain the way of earning with Buy and Sell orders?
4. What is the importance to a country by Forex?
5. Can you start a new trading?
6. Can you explain Pips, Leverage, Lots and Margins?

Again, go and read again if you can’t understand any of these. I am writing these with great effort that some of you will make use of it. As I heard around 850 friend of us have opened accounts in this week. So I am really happy.

The method of Trading

Please follow these steps as they are. If you don’t, you’ll have to have the loss. There has to be an order if some is to be successful. It is same here. People cry that they lost when they lose the order of things. You may have heard that. But you won’t, as long as you follow us. I am telling you a special method and you can’t be lost if you do correctly.

I have told you the way of Trading. As you are using a Demo account, it doesn’t matter much. But in real accounts, you have to follow every rule to the last step. You have to keep the arrangement and you will be able to have profits more easily.

1. Don’t trade every currency pair. We need details to trade with a particular currency pair. They help us to know whether this currency pair will rise or fall. I told you that incidences in the countries affect the economy of a country. If you choose the main currencies, you’ll get more details regarding the changes occur in particular countries. UR/USD, GBP/USD is some good examples for such. Therefore always try to use these as the currencies that you are dealing. These currencies belong to powerful countries and hence the details we receive are very valuable and enough to arrive at a good idea. This type of trading is called Ne Trading. I’ll tell you more in a later article.
2. The Amount of Open Trading- This is a rule that you must adhere to your best. Some people invest 100$ and then use that for 5 or 10 Trades. If you want to do such amount, you need at least 1000$ (In lowest lot size-0.01). If you use 100$ you have to do one after one. In other words, you have to open a trade and close it after some time and open a new one after that. If you open several trades at once, you’ll lose your way. If you do so, your investment will lack the benefits. Reduce the risks and continue you trading. You can earn around 1-3$ per day. If you can open several accounts a once, you can earn a lot. But don’t try to do that with 100$ and imagine to be a millionaire within a day, you’ll be lost sooner.
3. Appearance of MT4 software- Everybody should maintain charts in the MT4 software for the relevant currencies. But don’t open them for all currencies. Leave all other charts except the ones I mentioned earlier. Once you newly install the software, 4Hr charts will be shown. It is too big to see the way market behave in the history. Change it to either 5-5mins or 15-15mins. Click M5 that is seen in the top of the view.

Will market prices be increased or decreased?

It’s the time to understand the market changes. This is only for a basic understanding. But we have to discuss this further in the future. You may have so many questions regarding this matter. Some people use Candle Stick Pattern & Technical Analysis type of methods to detect these. You may have nightmares if you see their MT4s. But nobody is capable of accurately predicting the market changes in whole world. But you can make accurate guesses. Use the simple methods I have given to you. I will tell you more in coming articles.

Also this is for those who lost after methods such as technical analysis. They are created not only to do the trading. But it is for us to have some clue about the trends. Those teachers who don’t know this will show you these things and you’ll be lost in the end. They don’t have enough economic knowledge. But they still teach even though they don’t know for themselves. I’ll guarantee you that either these people are lost or they are keeping money without any use. I will concentrate more on economical changes. The most important thing is to teach the trading depending on the market changes. But it is not only about graphs. If you disconnect your internet connection while you are keeping MT4 on, it will stop. But Forex market will never stop. Indicator, RSI, MCDA, technical analysis, candle stick pattern work on Program Scripts written. They can’t think. It’s your brain which can analyze the market in the best way.

Mountain system

Everybody has seen the mountains. As they ascend and descend, the Forex market will move up and down. This is a screenshot I have taken from the Daily time. See the way I described is there or not?

You have to know that there is a slope after every peak. It will happen most of the time and you can manage your trading with these data in your mind. Wait if the slope is progressing until it will move very low and stop. Then start a new trading. You can use your Demo account to see this. But you should not be too greedy here. You have to take the profit once you see some 10-15 Pips have come. Use M15 chart for this. See the screenshot I have shown below.

This is a 30min chart. It’s the same way market has behaved. Experience this a little more and get familiar. There are lots of things to tell. But I’ll tell them only to those who are members. There are some conditions to understand.

1. Don’t open trading every time you see.
2. Act only in clear slopes or inclines.
3. Don’t keep large benefits.
4. Stay for at least 30 Pips in the market change.

Test these and ask if you have any queries. This is only one simple way. There are many practical ways in the next few articles. Until then you can try this for

BASIC TARDING 3

BASIC TARDING 3

Basic Trading 3 (Lots, Leverage, Margin)

I hope that many of you have a good knowledge by now. There is nothing much to think in Forex. Some are thinking it as a big issue. All you have to do is understanding with enough devotion and urge. You need a good amount of skills and training to earn a lot more in this niche. I’ m going to tell you about the management of “Trading” in this article.

You can open and close a trading as well as applying Stop loss and Take profit options. If you can’t, it’s good to read last articles. This is very important as I said earlier. Better you understand, better you have chances to earn. Read carefully. There are lots to come. These are very important aspects that I am speaking of today. It’s a shame to mention that some of the Forex teachers are not aware of these as well. Let’s learn these and apply them for our future uses.

What are the Lots?

You will meet this word in Forex more often if you are opening a trading. You may still remember that we met some numbers like, Volume = 0.1, 0.2, 0.3 when we were opening a trading. If you can’t remember, open a window in a trading in MT4 and see for yourselves. These are in Volume option. These are called a ‘Lots”. If you don’t have enough knowledge on lots, you will lose your money. Because Lots is the one which is going to show us the amount of Trading to the money we invest. If we put 10 lakhs to the stock market we are not going to buy shares of all the money at once. We invest only a part such s 1 lakh. Similarly we use lots in the Forex market for that. Let’s take a Currency Pair in the market. It is GBP/USD. Base Currency is GBP in this. USD is the other currency called, Quote currency. As there are a thousand grams for a kilogram,a lot has 100,000. But this is not 0.1 we mentioned. 0.1 is a tenth of a lot. When we get a real account a lot equals 0.01.

Lot 1 = 100,000 (Unit is a standard value. You don’t have to bother about this.)

We use the word Standard Lot for this. Not only are that but also Mini Lot, Micro Lot, Nano Lot such several Lots we come across. Those were like grams, kilograms, pounds, tons. 

Lot = 100,000

Mini Lot = 10,000

Micro Lot = 1,000

Nano Lot = 100

Many people including those who teach are not familiar with these and they easily lost. Let’s use the values given above for our trading and see the importance. Imagine now GBP/USD is at 1.5800. Now you want to activate a Buy or a Sell order. Then you have to use some Lots. How many USD is required for you to buy a Lot in this scenario?

GBP Lot 1 = 100,000

100,000 x 1.5800 = USD 158,000

You can’t even think about that much. Isn’t it? You need a whole lot of money in Rupees here. In this instance, we need Leverage option. It’s very important in Forex market. We saw a lot in above example and t equals to 0.1. It becomes 0.01 in a real account. Let’s learn about Leverage now.

What is leverage?

You need a lot of money to buy a Lot in Forex market as you saw. But still you can Trade while using small amounts such as 100$. It is called Leverage. Forex Broker companies provide us these in 400:1, 200:1, 100:1, 50:1 scales. Normally we use 200:1. These are used to minimize the values. See this example.

Your leverage is 200:1. How many USD are needed for you to buy a Lot if GBP/USD is at 1.5800 now?

GBP Lot 1 = 100,000

100,000 x 1.5800

USD 158,000 /-

But when we leverage this,

158,000/200 = USD 790

In reality you have to spend 790 USD to by a GBP lot under the leverage. See how much in Rupees. But we do not buy that much at once. Its only millionaires do that. We buy from 0.1 Lots or less. We can buy down to 0.01. In a Demo account we have to spend 79USD to buy a lot and in a real account it would be 7.9 USD. You can see how the values go smaller as we trade. The amount of USD spent for Lot sizes is important in margin. You can see there is a word as Margin in this image.

Let’s see this now. If you have any problems read again. I have written these in the simplest form. I am not a writer but a Forex trader. Let’s think that we have added 100$ to your account. If you are only adding 50$, it’s better to stop now. You can try it in Demo. Calculate this and see for yourself.

Basic investment= $100 (Balance of above picture)

Lot size for the Trade= 0.01 (Smallest possible amount in window)

GBP/USD market= 1.5800

Lot 1 = 100,000

100,000 x 1.5800 = USD 158,000

158,000/200 (200:1) = USD 790

Our lot size 0.01. So 790/100= 7.9USD

We have to spend 7.9$ for a trading in Lot size 0.01.

We get the same after we close the trading. We get the value with added or subtracted adjustments according to profits and losses.

Balance = $ 100

Equity = (The net value of your Trading that is shown until you close it)

Margin= 7.9$

Free Margin+ 100-7.9 (Current profit or loss)

This section is very valuable. So it’s your job to read it carefully. It doesn’t matter how much we invest, it should not trespass the 50% value of the initial investment made by us. So those who start with a 100$ and finish successfully should invest another 100$ after the end. You have to trust this advice thoroughly in real accounts. If not, you’ll be lost. Deposit more money if you don’t want to be so. Read this one carefully and adopt to your trading.

Special Note

I have taught you half of the Forex by now. It’s enough for those who learn for free. If you need more, you have to have a real account and register for membership. I’ll give them the other articles. Some may be angry with me. But I should give the important things to those who use it. Some people open the account, but don’t even look at it. My time is wasted. I have heard that my posts are copies and put in other sites as well. I am taking this decision for your benefit. Even though I give you a password, I am not charging from you. All are free. Fill me the application and send me. I’ll create it for you. I’ll send you the password after you verify and deposit money. Remember that all are free for those who really love to join this field as serious Forex Traders. You may think that you need to read other articles to trust us. There is no such thing as the articles from here onwards are directly related to the trading. So fill the form and send it to us.