Investors and traders from around the world are looking for a new opportunity for the placing on the market Forex speculation. But how transactions are carried out in the Forex market? Or what is Forex Trading basics? We need to do Before adventuring Forex market that we realize it otherwise we find ourselves lost if we less likely. This is what this article is aimed at, to understand the basics of currency trading.
What are traded Forex market?
Device Trade Forex traders and investors have currencies. currency pair is the currency exchange rate to another currency pairs traded Most. [3] [4] are:
USD/CHF: Swiss franc
GBP/USD: English
USD/CAD: Canadian dollar
USD/JPY: Yen
EUR/USD: Euro
AUD/USD: Aussie
These six currency pairs to create up to 85% of the total amount of the Forex market, as the case may be, for example, if a trader. [1] [2] So takes a long for the protection of the euro, he or she is at the same time, purchases and sales of USD EUR. If the same operator moves to short or sells Aussie, he or she is at the same time sell AUD and buy the USD.
For each currency pair in the currency of the first currency is called the base, while the second currency is called the counter or quote currency is expressed in the currency pair for each counter rahayksiköissä necessary currency of one unit of the base.If the price or quote for THE EUR/USD 1.2545, it means that 1.2545 US dollar is needed to get one euro.
Spread bid Ask
All currency pairs are quoted with the General in the case of a public bid and ask price. Quote (always lower than the ask) has its own vakuutuksenvälittäjätoiminnan it wants to buy price, thus the trader should sell for this price. Ask is your own vakuutuksenvälittäjätoiminnan is ready to sell at any price, price, therefore the trader should buy this price.
EUR/USD 1.2645/48 or 1.2645/8
The offer price is 1.2645
The ask price is 1.2648
PIP
Pip is the currency pair to do at least incremental transfer.Pip stands for price advantage. transition from the EUR/USD 1.2545 1.2560 is the same as on the occasion of the changeover And 15 points., USD/JPY 113 112.35.40 of 105 points.
Margin Trading (leverage)
Unlike other requests, the size of the deposit, the amount of the financial markets to trade in the Forex market, you need to use only the margin deposit.The rest of your own by vakuutuksenvälittäjätoiminnan.
Some brokers leverage provided by moves to 400: 1.This means that you need to use only 1/400 or.25% of the balance between the Open location (as well as gains/losses on a floating.)Most brokers offer 100: 1, which requires a balance between the supplier and, in the case of Open drive% 1.
Forex market standard for the batch size is $ 100 000 USD.
For example, a trader wishes to obtain a long time in the same lot EUR/USD, and he uses a 100: 1 second-round effects.
Open to such a position, he contends that the Court of 1% of balance or $ 1 000 USD.
Of course, it is not appropriate to open position is limited to the assets of our trading balanced. where purchases goes against our supplier, we are sorry for the inconvenience vakuutuksenvälittäjätoiminnan position. This brings us to our next important term.
Margin Call
Margin call occurs when the account balance falls below the maintenance of trading margin (in the capital of the need to open a single place, 1% when using a leverage of 100: 1, 2% when using leverage is the split ratio and so on.)Currently, the insurance brokers sell or buy back the short positions in all of the stores, while leaving it to the trader "in theory" maintenance margin.
In most cases, the margin calls occur when money management is not used correctly.
How is the Forex trade mechanics?
After extensive analysis, a trader decides is greater probability up British sterling. She decides to go for a long time to 30 points and rubber objective (reward) 60 points If a trader for the purposes of the market for us. [1] [2] he loses 30 points, on the other hand, if the market is intended to be used in the manner he or she receives the actual offer of 60 points., as well as the sterling has 1.8524/27, 4 pips spread. Our supplier may long time (ask) 1.8530. our target Market (is called profit order), or we risk point (i.e., the stop loss level) when we sell the quote price (the price we are willing to buy back vakuutuksenvälittäjätoiminnan our position.)40 Points, you will be able to make our Turn profit should be placed 1.8590 (bid price).If we hit the target, the market may be ran to 64 points (60 points and spread 4 pip.)If we stop loss level is hit, the market won the Silver Medal with 30 points against us.
It is very important to understand every part of the forex trading first very basic concepts to begin. [1] [2] then complex questions, such as Forex trading systems, trading psychology and marketing and risk management to go to. and make sure that each individual aspect of the master before the Live trading account of adventuring.
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