Psychology

A trading psychology, it is based on how well you know yourself and are able to gain from your strong points, as well as to have power over you weak ones, has much to do with how successful trader you will be. When you really know yourself, then you are familiar of how you are going to react under specific circumstances and you can protect yourself from self-damaging actions or decisions when it comes to managing a trade.The overlapping of psychology and trading is complex. Psychological factors, such as execution of an action with overwhelming sense of apprehension and fear, can interfere with clear-headed decision-making about markets. Many traders put their money at risk without a explainable edge. It is difficult to imagine such kind of trading *not* originate frustration over time. Other traders lock themselves in solid methods, but these may not be accepted with their talents, personalities or skills.

Capital aka Cash Money

Money is required to make money. All of us know that, but how much does it need to start trading? It totally depends on how you are going close to your new start-up business.Firstly, keep in mind how you are going to be educated. There is a lot of ways to learn how to trade: mentors, classes, by yourself, or to combine between the three.As there are many mentors and classes out there ready to teach Forex trading, most of them will charge fees. The benefits of them is that a well-taught class or great mentor can defiantly shorten your learning curve and gets you on the way of profitability in a very short time in comparing it with doing it on your own.The negative aspect is the pre-paid cost for these programs, which could varies from hundreds to thousands, it depends on which program you choose. For those who are new to trading, the requirement (cash money) to get these programs is not available.

How Does the Carry Trade Work for Forex(Gen)?

As a forex trader you know that forex trade in pairs, for example you trade USD/JPY that mean’s buying a US dollar and sell JP Yen. So you pay for JPY and collect the USD.Technically, all positions are closed at the end of the day in the spot forex market. Brokers close and reopen your position, and then they debit/credit you the overnight interest rate difference between the two currencies.The amount of leverage available from forex brokers has made the carry trade very popular in the spot forex market. Forex trading is completely margin based, meaning you only have to put up a small amount of the position and you broker will put up the rest.

The Carry Trade

A strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. A trader using this strategy attempts to capture the difference between the rates - which can often be substantial, depending on the amount of leverage the investor chooses to use. Here’s an example of a “yen carry trade”: let’s say a trader borrows 1,000 yen from a Japanese bank, converts the funds into U.S. dollars and buys a bond for the equivalent amount. Let’s assume that the bond pays 4.5% and the Japanese interest rate is set at 0%. The trader stands to make a profit of 4.5% (4.5% - 0%), as long as the exchange rate between the countries does not change. Many professional traders use this trade because the gains can become very large when leverage is taken into consideration.

What is the U.S. Dollar Index?

If you’ve traded stocks, you’re familiar with all the indices available such as the Dow Jones Industrial Average (DJIA), NASDAQ Composite Index, Russell 2000, S&P 500, Wilshire 5000, and the Nimbus 2001. Oh wait, the last one is actually Harry Potter’s broomstick. Well if U.S. stocks have an index, the U.S. dollar can’t be outdone. For currency traders like us, we have the U.S. Dollar Index (USDX).The U.S. Dollar Index consists of a geometric weighted average of a basket of foreign currencies against the dollar. Come again?! Okay before you fall asleep on us after that super geeky definition, let’s break it down. It’s very similar to how the stock indices work in that it provides a general indication of the value of a basket of securities. Of course, the “securities” we’re talking about here are other major world currencies. The BasketThe U.S. Dollar Index consists of six foreign currencies.

How to Use the COT Report

In this section we will show you how to use the Commitment of Traders (COT) reports to accomplish this goal as we will skillfully explain how to break down the COT data into producers, consumers, and funds so you understand the positions and activities of these key market participants. In addition, you will be able to detect position imbalances that could be harbingers of major trend changes.By analyzing the data provided by the COT report, traders can see the market participants prepared or positioned themselves ahead of significant market turning points and in front of extensive bull and bear markets.tracks the positions (longs and shorts) held by all market participants, my analysis further breaks down this data and applies proprietary statistical measurements and indicators to identify trading opportunities. We combine these indicators with proprietary price indicators and graphically present the results to you.

Commitment of Traders Report

The Commitments of Traders (COT) reports can be a very powerful trading tool to help anticipate market direction as it provides a breakdown of each Tuesday’s open interest for market reports in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC., and it measures the net long and short positions taken by traders in the futures market. Of course, it is very important to know that For reportable positions, additional data is provided for commercial and non-commercial holdings, spreading, changes from the previous report, percents of open interest by category, and numbers of traders

The report is pretty straight forward, but here’s a quick run down of what each category is.
• Non-Commercial – Traders such as individual traders, hedge funds, and financial institutions. who are looking to trade for speculative gains.
• Commercial - These are the big businesses that describes an entity involved in the production, processing, or merchandising of a commodity that uses currency futures to hedge.

Getting Sentimental with Forex Trading

Sentimental analysis is what it sounds like – gauging the market sentiment. What does that mean? Well, as traders, a part of our job is to determine if a market is bullish, bearish, overbought, oversold, and to plan a trade for those market conditions – basically putting all of the things we’ve learned up until this point all together. So how do we do that? What tools can we use? And how do we react to certain conditions? Well, that’s what we’re going to find out today – we’re going to take a look into sentiment analysis in forex trading.Now there are a couple of ways to gauge different market conditions. Does anyone know what those two things are? You guessed it: technical and fundamental analysis. Now, in the School of Pipsology, we’ve covered most of the commonly used technical indicators out there for forex trading, so you should be an expert at that already right

Trading the News

Is a popular technique in the forex markets … Everyone wants to trade the news as you can see currency pairs move dramatically within seconds after the release of major news like “The US Retail Sales” and others and it responds not only to U.S. economic news, but also to news from around the world. That’s easy money! Depending on how are you trading this news. So for those who want to trade news there are plenty of opportunities and you will be able to know different strategies through this lesson.Our goal is to make the most of your trading knowledge and we willl provide you with all of the steps needed to know how to trade the news.

Attention! Do You Have a Trading Plan?

Are you interested in making a lot of profits? There is No need to answer - who isn’t? You can fill your mind with plenty of information, but without a good trading plan and the discipline to stick to it, you will NEVER be profitable.Any profitable traders have a trading plan and they were planning for it very well They also confident of there profit.
“If you fail to plan, you are planning to fail!”
The ideal trading plan model always use is as follows

ForexGen Putting It All Together

In a perfect world, we could take just one of these indicators and trade strictly by what that indicator told us. The problem is that we DON’T live in a perfect world, and each of these indicators has imperfections. That is why many traders combine different indicators together so that they can “screen” each other.

We urge you to study each indicator on its own until you know EXACTLY how it reacts to price movement, and then come up with your own combination that fits your trading style. Later on in the course, we will show you a system that combines different indicators to give you an idea of how they can compliment each other.

Everything you learn about trading is like a tool that is being added to your trader’s toolbox. Your tools will make it easier for you to “build” your trading account

Double Bottom

A charting pattern used in technical analysis. It describes the drop of a stock (or currency), a rebound, another drop to the same (or similar) level as the original drop, and finally another rebound.
The twice touched low is considered a support level.
Most technical analysts believe that the advance off of the first bottom should be 10-20%. The second bottom should form within 3-4% of the previous low, and volume on the ensuring advance should increase.

The Million Dollar Question

How do you figure out whether to freakin’ use oscillators, or trend following indicators, or both? After all, we know they don’t always work in tandem.
For now, just know that once you’re able to identify the type of market you are trading in, you will then know which indicators will give accurate signals, and which ones are worthless at that time.

Summary
There are two types of indicators: leading and lagging.
A leading indicator gives a buy signal before the new trend or reversal occurs.
A lagging indicator gives a signal after the trend has started .
Technical indicators into one of two categories: Oscillators and trend following or momentum indicators.

Leading vs. Lagging Indicators

Leading vs. Lagging Indicators

Leading Indicators
An index published monthly by the Conference Board used to predict the direction of the economy’s movements in the months to come. The index is made up of 10 economic components, whose changes tend to precede changes in the overall economy.

These 5 components include:
1. the average weekly hours worked by manufacturing workers.2. The average number of initial applications for unemployment insurance.3. The amount of manufacturer’s new orders for consumer goods and materials.4. The speed of delivery of new merchandise to vendors from suppliers.5. The amount of new orders for capital goods unrelated to defense

Oscillators

The Stochastic Oscillator comes in 3 flavors: Fast, Slow, and Full. The Stochastic Oscillator is a momentum indicator designed to show the relation of the current close price relative to the high/low range over a given number of periods using a scale of 0-100. It is based on the assumption that in a rising market the price(s) will close near the high of the range and in a declining market the price(s) will close near the low of the range. The Full Stochastic Oscillator is calculated by the formula:
Fast %K = ((Today’s Close - Lowest Low in %K Periods) / (Highest High in %K Periods - Lowest Low in %K Periods))

Lagging Indicators

An index published monthly by the Conference Board that is used to confirm the direction of the economy’s movements in past months.

1. the value of outstanding commercial and industrial loans.2. The change in the consumer price index for services from the previous month.3. The change in labor cost per unit of labor output.4. The ratio of manufacturing and trade inventories to sales made.5. The ratio of consumer credit outstanding to personal income.6. The average prime rate charged by banks.
As it measures the economic activities of previous months, the Composite Index of Lagging Indicators is used as an after-the-fact way to help confirm economists’ assessment of current economic conditions.

Support and Resistance

The concepts of support and resistance are undoubtedly two of the most important and highly discussed attributes of technical analysis and they are often regarded as a subject that is complex by those who are just learning to trade.

Most experienced traders will be able to tell many stories about how certain price levels tend to prevent traders from pushing the price of an underlying asset in a certain direction.Most technical traders incorporate the power of various technical indicators such as moving averages, to aid in predicting future short-term momentum, but these traders never fully realize the ability these tools have for identifying levels of support and resistance

Trend Lines

The trend lines are a popular and an important type in technical analysis for trend identification and confirmation, They are also one of the most underutilized as well.

There are two kinds of trends:Stock up trend: it can be used like a sell signal, deemed to be complete with the formation of a lower high or a lower low.Stock downtrend: it can be used like a buy signal , deemed to be complete with the formation of a higher low or higher high.

Channels

There are 2 types of channels in the forex market :1-If you want to create a down channel, it may also be called a descending channel, you can simply draw a line at the same angle as the downtrend and after that move the line to a new place where it can reach the most recent both valley.

For the both channels ,it should be done at the same time to you to create the trend line.It may be a sell signal when the prices hit the up trend line and it can be a buy signal when the prices hits the down trend line

Fibonacci

We should know from the beginning that the Fibonacci is a big subject and there are many ways to study the Fibonacci .there is a lot of types of the Fibonacci but we will show 2 types only: the Fibonacci retracement and extension.

The Fibonacci ratio can start from this number: 1, 1, 2, 3, 5, 8, 13, 21, 34
The number series starts from the number 1 then the number 2 and after that we add 1+2 we will get 3 ,it will be the third number ,then we add 2+3 we will get 5 and that will be the fourth number.
Fibonacci extension: the levels of Fibonacci extension will be 0, 0.382, 0.618, 1.000, 1.382, 1.618.many Traders can use the Fibonacci extension as profit taking level and when they watch the same levels ,they can buy or sell to enter the trade or cancel it, so this will become a due self-fulfilling expectation.

Fibonacci Retracement

fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by Leonardo Fibonacci. However, Fibonacci ’s sequence of numbers is not as important as the mathematical relationships, expressed as ratios, between the numbers in the series. In technical analysis, Fibonacci retracement is created by taking two extreme points (usually a major peak and trough) on a stock chart and dividing the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%. Once these levels are identified, horizontal lines are drawn and used to identify possible support and resistance levels. Before we can understand why these ratios were chosen, we need to have a better understanding of the Fibonacci number series.

Fibonacci Extension

Fibonacci Extension
what is fibonacci and how to use it in the world of FX?

Leonardo Fibonacci was a 13th century mathematician who noted that there are certain ratios that tend to occur repeatdly in nature . The common ones that he identified were 38.2%, 50%, and 61.8%.
For example, the distance from your fingertips to your wrist is 38.2% of the distance from your fingertips to your elbow. There is overwhelming evidence of Fibonacci ratios operating throughout nature.
These are not always perfect, but surprisengly they work more than just often!! Many people have argued about why these work, but my opinion is that all the large institutions use them, so you might as well buy or sell at the same levels that they do and if these levels don’t hold you can get out with a small loss.

Simple Moving Average (SMA)

the simple moving average is formed by calculating the average price of a security over a particular number of periods. While it is possible to create moving averages from the Open, the High and the Low data points, most moving averages are created using the closing price.

For example: a 4-day simple moving average is calculated by adding the closing prices for the last 4 days and dividing the total by 4.
11+ 12 + 13 + 14 = 50
(50 / 4) = 12.5
The calculation is repeated for each price bar on the chart. The averages are then joined to form a smooth curving line - the moving average line. Continuing our example, if the next closing price in the average is 15, then this new period would be added and the oldest day.
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Exponential Moving Average (EMA)

In order to reduce the lag in simple moving averages, technicians often use exponential moving averages (also called exponentially weighted moving averages). exponential moving average reduce the lag by applying more weight to recent prices relative to older prices. The weighting applied to the most recent price depends on the specified period of the moving average. The shorter the exponential moving average’s period, the more weight that will be applied to the most recent price.

For example: a 10-period exponential moving average weighs the most recent price 18.18% while a 20-period EMA weighs the most recent price 9.52%. As we will see, the calculating and exponential moving average is much harder than calculating an simple moving average. The important thing to remember is that the exponential moving average puts more weight on recent prices.
exponential Moving Average Calculation
Exponential Moving Averages can be specified in two ways - as a percent-based exponential

SMA vs. EMA

EMA:IT HELPS TO SHOW RECENT PRICE SWINGS AND FAST MOVINGSMA:HELP TO SHOW EASY CHART, AND ELIMINATE THE FAKEOUTS. IT’S UP TO YOU TO DECIDE WHICH ONE IS BETTER TO USE A LOT OF TRADERS PLOT DIFFERENT MOVING AVERAGES TO GIVE THE SIDES OF THE STORY. THEY SHOULD USE THE SIMPLE MOVING AVERAGE TO FIND WHAT IS THE OVERALL TREND, AND ALSO USE THE EXPONENTIAL MOVING AVERAGE TO FIND THE BETTER TIME TO ENTER THE TRADE TIME.Read More : www.forexgen.com

MA Summary

Moving averages are one of the most famous tools and also the easisest tool used by many traders.
We can find many types of moving averages .the 2 most popular types are: Simple Moving Average and Exponential Moving Average.• The simple form of moving average (SMA) will be the simple moving average, is formed by computing the average = price of a security over a number of periods• Exponential moving averages: EMA’s reduce the lag by applying more weight to recent prices relative to older prices.
• The best way to use moving averages is to plot different types on a chart so that you can see both long term movement and short term movement.
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ForexGen LTD History

ForexGen LTD is an online trading service provider supplying a unique and individualized service to Forex traders worldwide. We are dedicated to absolutely provide the best online trading services in the Forex market.ForexGen LTD provides a unique online trading experience based on our intelligent online Forex trading package, the ForexGen Trading Station, including the best online trading system.
ForexGen LLXserves both private and institutional clients. We have a strong commitment to maintain a long term relationship with our clients.Read more…

Money Manager with ForexGen

An individual who is responsible for the entire financial portfolio of another individual or another entity.

A money manager receives payment in exchange for choosing and monitoring appropriate investments for the client.
Benefits of being a Money Manager with ForexGen:
Providing three different commission sources.
Weekly commission plan.
Easy & fast commission withdrawals.
Fixed percentage of the profits.
P = k * D “P=Profit, k=Variable Parameter, D=Deposits”
The money manager gets a fixed percentage of the profit previously agreed upon with the client for managing the client funds as a bonus feature. Read more…

Forex Trading Education with ForexGen

How To Learn Forex Trading To Become A Profitable Trader

If you are seeking to educate yourself about forex trading, most probably your main objective is to gain trading skills so that you are able to trade independently and to be able to create personal consistent wealth through forex trading. Most forex traders are independent traders or individuals who are trading from the comfort of their own homes and not institutional traders who are backed with large quantities of capital by commercial organisations or sponsored by large investing funds.
The distinction between private forex education and academic education
If you are an individual private forex trader, then what you need is a practical forex trading education that will encompass the practical aspects of trading and how to make money from your trades rather than an all comprehensive education involving the historical background of forex, the intricacies of price movements or the more mundane academic statistical studies of finance and currencies. So if you are someone entering into the forex market with the intention to make money from trading forex, then look for someone or a mentor or a trading course that can allow you to learn how to trade profitably.
As a wealth creator, this is what you should look out for in planning your own forex trading education or learning plan. Read more…

ForexGen Opens Doors for Complaints

I haven’t been able to make any progress monetarily in about a month. I’m up about 4% this month but breaking my account balance all-time high has been a struggle. I’m pretty much stuck where I was around this time last month. I’m not all that concerned and shouldn’t be considering I was preaching patience a couple of days ago. It’s just that every time I open my trading platform, the account balance is just staring me in the face. Read more…

ForexGen Solutions

It’s more important that I progress as a risk-aversed trader. For newer traders, it’s very important for you to understand that learning methods to control your risk should be a priority. Making gains monetarily is obviously important but making gains and strides elsewhere are more important. When I first started trading mostly with demo accounts, I had some unbelievably profitable trades but my strategies were random and my risk and leverage too high. A lot of this is just pure luck and not going to take you to the next level. Your account balance shouldn’t be used as a guage for success. Some questions to ask yourself to guage your success may be:

Have you managed to minimize your risk and maximize your reward?
Have you maintained consistency?
Have you been able to control your emotions?
Have you developed a complete trading system that you’ve been able to follow without deviation?
If you haven’t been profitable, have you at least been able to turn those gushing drawdowns into slow bleeders?
For more information please contact us at www.forexgen.com

The Mathematical Think-Tank with ForexGen

The Mathematical Think-Tank with ForexGen

Cash exchange rates, an Over-The-Counter (OTC) instrument, has become an easy-profit tool for many private business ventures, calling themselves legitimate Forex brokers. However they promote it, the business model reeks.

Selling Fantasies
Every ad starts with some wild claims of something along the lines of “Make $5,000 a week sitting at home!”, “Easy money from Forex!”, or anything else with excessive amounts of exclamation marks, you get the drift. They entice people with fantasies where truth lies away in distance. Read more…

Gaining Experience in Trading with ForexGen

Here is one secret that can shorten your learning curve as a forex trader. Get yourself a trade simulator and practise your trading methodology repeatedly till you are consistently profitable before you trade. Practice makes perfect, and you can pick up years of experience as a forex trader within weeks on a trade simulator with a large database of price movements. Read more…

ForexGen Mini Forex Trading Account
For the beginner trader, the use of a mini forex trading account will greatly reduce his risk as he puts into practise whatever he has learnt in forex trading. A mini forex trading account possesses more leverage and a trader can start to trade with very low capital, and therefore reduced risk. In that way, he can start to maintain discipline in trading without worrying too much on losing a big sum of money.

Manage Risk Profile with ForexGen

The second consideration is your personal risk profile. Are you an aggressive trader or a conservative trader? This is important form the aspect of forex education because you will not be able to fit into day trading forex if you are a conservative trader who is not looking for multiple trades a day. On the contrary, the aggressive trader will like to be proficient in day trading and learning how to trade as a forex day trader will be suitable for him. By knowing your own risk profile, you will be able to start in the correct direction finding a mentor or a trading course that is suitable for your own needs. Read more…

Trend Analysis and The Forex Market with ForexGen

Trend analysis is an indispensable function of the successful Forex trader. Just like a good mechanic or carpenter, having the right tools in your toolbox will make all the difference in your ability to break down trends and trade in the direction of established trends. Following are some essential Forex trend analysis tools to include in your toolbox: Mark the trends using trend linesUsing multiple chart compressions, decide on the overall direction.Use moving averages to distinguish trend direction. Read more…

Forex Hedge Funds with ForexGen

Hedge funds gained their popularity in the U.S. but foreign markets are starting to catch on to the idea. Hedge funds are known for their secrecy and exemption from regulatory rules. This investment vehicle moving overseas only makes it more attractive. There are however a few concerns when thinking about FOREX hedge funds.

Even less regulatory oversight
Less legal protection against losses
For now mostly meant to attract U.S. investors
Still relatively new and untested
This is not meant to completely discourage FOREX hedge fund investing but to make you aware of the potential risks involved. Hedge funds typically require hundreds of thousands of dollars in initial investments and that would be no small loss in a new trend scam if that’s what your first FOREX hedge fund investment turned out to be. Read more…

What is the truth with ForexGen?

Unlike centralized exchanges (e.g. NYSE, AMEX, CBOE, and etc.), OTC item prices settle upon agreement of two private parties, unregulated. The Forex brokers understand this and exploit it for profit.
These bucket shops trade against the clients, i.e. they serve as market makers and more often than not take the other side of trades against clients. They understand statistically that most financial market traders perform with negative expectancies, hence making trading against a losing crowd profitable business. This aslo explains why they target and welcome financial industry newbies so much.

What about the ones smart enough to eventually trade profitably? These brokers operate to preserve capital, and they resort to whatever means available and prevent consistent winnings off any client. Software disconnects, lagging/fraudulent price quotes, unfilled orders, or simply account banning have become some, certainly not all, common bucket-shop practices.

MACD

Moving Average Convergence Divergence (MACD)

A trend indicator used to show the relation between two moving averages of prices.

with the MACD chart ,You will see three numbers
• 1- the number of periods used to calculate the faster moving average.
• 2-the number of periods used to calculate the slower moving average
• 3- the number of bars used to differentiate between the fast and slow moving averages.

MACD crossover is a signal to buy or sell
re are 2 moving averages with different speed, the faster will be quicker to react to price movement than the slower.

THR MACD STILL ONE OF THE MOST FAMOUS TYPES USED BY MANY TRADERS

Stochastics

A stochastic is an oscillator that will help us measure the overbought and oversold conditions in the market .The Stochastic is an another indicator to help us to know where a trend will be ending.

The Stochastic are scaled from 0 to 100.The stochastic tells us when the market is overbought or oversold.
When the stochastic lines are under 30 (the green line), it means that the market is oversold ,When the stochastic lines are up 70 (the red line in the chart) it means the market is overbought.

Stochastics are another indicators used to helps us to determine where a trend will be ending.A stochastic is an oscillator that measures overbought and oversold conditions in the market.

HOW TO APPLY STOCHASTICS
The stochastics let us know when the market is overbought or oversold. When the stochastic lines are under 30 (the green line) ,it means that the market is oversold but When the stochastic lines are up 70 (the red line), it means that the market is oversold

Relative Strength Index (RSI)

Relative Strength Index, or RSI mean

A technical indicator used to compare the magnitude of recent gains to recent losses to determine overbought and oversold conditions in the market. . It can be calculated using the this formula:

RSI=100
100- 1+rs

readings below 20 refer to oversold, while readings over 80 indicate overbought. the RSI ranges from 0 to 100

The RSI is best used as a valuable complement to other stock-picking tools. Relative Strength Index, or RSI, is like the stochastic in that it means overbought and oversold conditions in the market.

RSI is a famous tool because it can be used to indicate the trend formations. When you find a trend is forming, you can take a look at the RSI and look at if it is up or under 50.

Lowest Spread with ForexGen

If we take no commissions or fees, then how are we compensated for our brokerage services, might you ask? The answer is: the spread. As you may have noticed, a currency pair quote comes with two displayed rates for instance, GBP/USD 2.025/2.028. Those refer respectively to the bid price (the rate at which you may short sell the pair) and the ask price (the rate at which you may buy the pair).

The spread is the difference between those two rates. The tighter the spread, the more advantageous it is for you. ForexGen offers spreads as low as 1 pip on the main currency pairs. ForexGen is able to offer such tight spreads thanks to the huge capital traded by its clients each day and the excellent inter-bank conditions thus negotiated.

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Forex Options Trading with ForexGen

A currency option is a contract that gives the holder the right, but not the obligation to buy or sell a specified currency during a specific time period. It can be used to hedge a FOREX transaction and are a favored method of reducing risk in companies that trade goods overseas.

There are two basic types of option: Call options and Put options. A call option gives the holder the right to buy a currency while a put option gives the holder the right to sell. The worth of an option at expiry is equal to the value realized by the holder in exercising the option. If the holder gains nothing, the option is worth nothing. The value at any other time of the contract duration is the ‘intrinsic value’ – the value that can be realized if the holder exercises his option. Intrinsic value is linked to the ’strike price’ – the value specified by the option contract. A call option has intrinsic value if the spot (current) price is above the strike price. A put option has intrinsic value if the spot price is below the strike price. If the option contract has intrinsic value it is said to be ‘in the money’, otherwise it is ‘out of the money’ or ‘at the money’ (at par). Options would only be exercised if they are in the money. Options are priced according to complex formulas that take into consideration both the spot value and time value. Time value is calculated according to expected market conditions including volatility and the difference in interest rates between the two currencies. Options must be priced low enough to attract potential buyers and high enough to attract potential writers (the sellers or guarantors of the option). Currency options are used in FOREX to minimize risk against unexpected moves in the market. If you buy an option your losses are limited to the cost of the option. Those who sell options are more vulnerable. They gain the premium but they are exposed to unlimited loss if the market moves against them. As a hedging tool, there are many different types of options available. They are often used by companies that trade overseas to minimize the potential for loss due to fluctuations in the foreign exchange market. FOREX trades have a special type of option available known as a Digital Option. This option pays a specified amount at expiration if the criteria are met, otherwise it pays nothing. FOREX traders who wish to use a digital option first decide which direction the market is moving. They then decide on a payoff amount if the market moves as expected within a certain time frame. With this information the cost of the option is calculated. For example: The price of the euro is currently trading at about 1.2400 and you expect it to rise to 1.2800 within 3 months. You decide to buy a put digital option with a payoff of $5000. The cost of the option is $800. If at the end of the 3 months the euro is more than 1.2800 you get $5000. If the price is less, you lose $800.

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IB Program with ForexGen

ForexGen IB programme is a great opportunity for both individuals and companies to receive commission for introducing their customers or contacts to ForexGen. In fact, any individual or organisation that has proper contacts can become a successful Introducing Broker. To give you an idea, we have provided below some examples of businesses and individuals that can establish a successful brokerage business:· Banks ·

Companies providing financial services and training ·

Insurance companies ·

Successful traders on FOREX,

stock,

futures markets ·

Trading rooms ·

Investment or trading clubs ·

Stock brokerage or trading companies ·

Money managers ·

Real estate firms ·

Companies with large clientele ·

Attorneys, accountants and other business professionalsSome IBs prefer to concentrate mainly on the sales and marketing aspects of financial business and leave actual market trading to customer’s or a third party’s discretion. Others offer added value services like market advisory/analysis services and assist their customers with their trading decisions.

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On Line ForexGen Broker

Exchange vs. Over-The-Counter Options
ForexGen options can be traded either on an exchange or in the over-the-counter (OTC) market, meaning between two parties.

Types of Transactions
Manufacturing companies who buy in raw materials from abroad and export finished products undertake both the purchase and sales of foreign exchange, as they are always dependent upon the supplying companies’ country of origin and its currency for their invoicing.

Margin Trading
Margin means borrowing money from a broker to buy a stock, or commodity, or currency pair and using the investment as collateral. It is, to all intents and purposes, a performance bond in cash or another means of security deposited by a trader.

Role of the Adviser
As the adviser is the primary contact between a market maker and a client, the adviser must demonstrate an overall understanding of the foreign exchange market in order to earn and maintain the trust of clients.

Barriers
This is a standard option that automatically cancels out if spot trades through a prearranged knock-out level. This level is set below the initial spot for a call option, and above spot for a put.

Reversals
Reversals are primarily a Floor Trader strategy used to capitalize on minor price discrepancies between calls and puts. As implied by its name, reversals are the exact opposites of conversions.

When Is a System Suitable for Automation?
While the average trader can make money using any given toolkit, there are some cases that are not well-suited for complete automation.

Making Mistakes
When trading in the ForEx market it is best to come to grips with the cold hard fact that only 5% of all traders achieve their ultimate goal of being consistent with their profits. The difference between that 5% and everyone else is that they learn from their mistakes and recognize them as learning experiences, not personal failures to be ignored and swept under the rug.

Successful and Unsuccessful Traders
Unsuccessful traders don’t want to learn the charts, the signals, and other intricacies of the forex market, become prideful, believing that they deserve more profit, are therefore take unwise risks.
Successful traders painstakingly build outwardly simple systems that have taken years to perfect, wait for predictable signals that are obeyed without question, want to know everything about their broker and their broker’s practices.

Currency Value
The value of a currency is always given in terms of another currency. For example, the value of a US dollar in terms of British pounds is the £/$ exchange rate, and the value of the Japanese yen in terms of dollar is the $/¥ exchange rate. Understanding this procedure is particularly useful when dealing with unusual currencies.

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