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.
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 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.
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.
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
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…
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…
| 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.
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.
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.
FOREX traders almost always rely on analysis to make plan their trading strategies. There are two basic types of FOREX analysis – technical and fundamental. This article will look at fundamental analysis and how it used in FOREX trading.
that may affect currency prices. FOREX traders using fundamental analysis rely on news reports to gather information about unemployment rates, economic policies, inflation, and growth rates. Fundamental analysis is often used to get an overview of currency movements and to provide a broad picture of economic conditions affecting a specific currency. Most traders rely on technical analysis for plotting entry and exit points into the market and supplement their findings with fundamental analysis. Currency prices on the FOREX are affected by the forces of supply and demand, which in turn are affected by economic conditions. The two most important economic factors affecting supply and demand are interest rates and the strength of the economy. The strength of the economy is affected by the Gross Domestic Product (GDP), foreign investment and trade balance. Indicators Various indicators are released by government and academic sources. They are reliable measures of economic health and are followed by all sectors of the investment market. Indicators are usually released on a monthly basis but some are released weekly. Two of the most important fundamental indicators are interest rates and international trade. Other indicators include the Consumer Price Index (CPI), Durable Goods Orders, Producer Price Index (PPI), Purchasing Manager’s Index (PMI), and retail sales. Interest Rates - can have either a strengthening or weakening effect on a particular currency. On the one hand, high interest rates attract foreign investment which will strengthen the local currency. On the other hand, stock market investors often react to interest rate increases by selling off their holdings in the belief that higher borrowing costs will adversely affect many companies. Stock investors may sell off their holdings causing a downturn in the stock market and the national economy. Determining which of these two effects will predominate depends on many complex factors, but there is usually a consensus amongst economic observers of how particular interest rate changes will affect the economy and the price of a currency. International Trade – Trade balance which shows a deficit (more imports than exports) is usually an unfavourable indicator. Deficit trade balances means that money is flowing out of the country to purchase foreign-made goods and this may have a devaluing effect on the currency. Usually, however, market expectations dictate whether a deficit trade balance is unfavourable or not. If a county habitually operates with a deficit trade balance this has already been factored into the price of its currency. Trade deficits will only affect currency prices when they are more than market expectations. Other indicators include the CPI – a measurement of the cost of living, and the PPI – a measurement of the cost of producing goods. The GDP measures the value of all goods and services within a country, while the M2 Money Supply measures the total amount of all currency. More than 40 indicators are used in ForexGen. Indicators have strong effects on financial markets so FOREX traders should be aware of them when preparing strategies. Up-to-date information is available on many websites and many FOREX brokers supply this information as part of their trading service.
FOREX analysis is divided into two types: Fundamental and Technical. Fundamental analysis attempts to predict movements in currencies by examining current political and economic events. FOREX technical analysis uses historical economic data to predict movements in the FOREX.
