(FOReign EXchange market) is an international
foreign exchange market, where money is sold and bought freely. In its
present condition FOREX was launched in the 1970s, when free exchange
rates were introduced, and only the participants of the market
determine the price of one currency against the other proceeding from
supply and demand. As far as the freedom from any external control and
free competition are concerned, FOREX is a perfect market. It is also
the biggest liquid financial market. According to various assessments,
money masses in the market constitute from 1 to 1.5 trillion US dollars
a day. (It is impossible to determine an absolutely exact number
because trading is not centralized on an exchange.) Transactions are
conducted all over the world via telecommunications 24 hours a day from
00:00 GMT on Monday to 10:00 pm GMT on Friday. Practically in every
time zone (that is, in Frankfurt-on-Main, London, New York, Tokyo, Hong
Kong, etc.) there are dealers who will quote currencies
Monday, May 18, 2009
Sunday, May 17, 2009
Elements of a successful Forex trade
Courage Under Stressful Conditions When the Outcome is Uncertain
by Jimmy Young of EURUSDTrader
All the foreign exchange trading knowledge in the world is not going to help, unless you have the nerve to buy and sell currencies and put your money at risk. As with the lottery “You gotta be in it to win it”. Trust me when I say that the simple task of hitting the buy or sell key is extremely difficult to do when your own real money is put at risk.
You will feel anxiety, even fear. Here lies the moment of truth. Do you have the courage to be afraid and act anyway? When a fireman runs into a burning building I assume he is afraid but he does it anyway and achieves the desired result. Unless you can overcome or accept your fear and do it anyway, you will not be a successful forex trader.
However, once you learn to control your fear, it gets easier and easier and in time there is no fear. The opposite reaction can become an issue – you’re overconfident and not focused enough on the risk you're taking.
by Jimmy Young of EURUSDTrader
All the foreign exchange trading knowledge in the world is not going to help, unless you have the nerve to buy and sell currencies and put your money at risk. As with the lottery “You gotta be in it to win it”. Trust me when I say that the simple task of hitting the buy or sell key is extremely difficult to do when your own real money is put at risk.
You will feel anxiety, even fear. Here lies the moment of truth. Do you have the courage to be afraid and act anyway? When a fireman runs into a burning building I assume he is afraid but he does it anyway and achieves the desired result. Unless you can overcome or accept your fear and do it anyway, you will not be a successful forex trader.
However, once you learn to control your fear, it gets easier and easier and in time there is no fear. The opposite reaction can become an issue – you’re overconfident and not focused enough on the risk you're taking.
new trade
Short 150,000 usd/jpy from 116.15 , stop 116.32
* this trade is comprised of two positions- one for 100,000 and a second for 50,000 .
The usd/jpy trade is in response to a fall below 116.20 towards 116. We'll have to see what happens at 116 , but I'm assuming it will penetrate towards 115.7 again.
eur/usd is up to 1.0080 again. There's a good chance it will hit 1.01 tonight , but to this point hasn't displayed sufficient momentum to break significantly higher. I'm frankly not sure which way it will move in the near term , so I'm sitting still. If there's a retracement to .99 or .98 , these levels might provide good buying opportunities. I have a suspicion that we'll be looking at 1.025 within the next month. This may not last long , but until dollar pressure has abated somewhat the dollar down draft will pull the euro higher.
* this trade is comprised of two positions- one for 100,000 and a second for 50,000 .
The usd/jpy trade is in response to a fall below 116.20 towards 116. We'll have to see what happens at 116 , but I'm assuming it will penetrate towards 115.7 again.
eur/usd is up to 1.0080 again. There's a good chance it will hit 1.01 tonight , but to this point hasn't displayed sufficient momentum to break significantly higher. I'm frankly not sure which way it will move in the near term , so I'm sitting still. If there's a retracement to .99 or .98 , these levels might provide good buying opportunities. I have a suspicion that we'll be looking at 1.025 within the next month. This may not last long , but until dollar pressure has abated somewhat the dollar down draft will pull the euro higher.
Market Orders
Market orders are the most basic Forex trading orders that are bought and sold for the current market price. With market orders, the transaction is done regardless of the price. The Forex trading software gives you real time prices, so you can decide exactly when to execute a market order with ease. Market orders are perfect for situations where you follow a certain currency up close. The minute you want to enter a position you can buy and sell the currency at a click of a button using Forex trading market order.
The main thing to remember about market orders is that they are executed for the current market price, and that this is beneficial if you want to instantly enter a position.
The process of placing Forex trading orders is like so:
1. First you specify the currency pair and the size of the deal. Let's say the EUR/USD pair quoted 1.2603/06, for 2 lots of $100 each.
2. Next you choose to either sell each EUR for 1.2603 USD (bid price), or choose to buy each EUR for 1.2607 USD (ask price).
3. Finally, the transaction is confirmed by your dealer. This only takes a few seconds for Forex trading orders.
How to Place Different Types of Forex Trading Orders
In this page we explain about the different forex order types available for online Forex trading. The most important things to remember about placing a Forex trading order is this: Always understand the orders you place. Never place an order which you are not entirely knowledgeable about. You'll be able to see the orders available for you after you open your trading account, so soon after check and learn about the different ones you can make.There are various Forex trading order types to choose from, and each order has its advantages and disadvantages, which will described in later pages
Limit orders
Forex Trading Limit entry orders are executed only if the currency price touches but not breaks the price you set. Limit orders are done when traders want to set the limit price. These orders are executed only if the currency reaches the limit price you set. Limit orders are used when you want to buy and sell a currency only if it reaches a certain price or better. Let's say the currency pair EUR/USD is worth 1.245, and you buy a limit order of 1.249. This means that the transaction will be executed only if the currency price
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 1.2342/47, then the bid price is 1.2342. Meaning you can sell the EUR for 1.2342 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 1.2342/47, the ask price us 1.2347. This means you can buy one EUR for 1.2347 USD.
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