2 letters that spread . Forex currencies by buying another one can undermine the market exchange rates instead of business .
Currencies are always traded in pairs , for example Euro - USD ( EUR / USD ) or U.S. Dollars , - Yap.Iyen ( USD / JPY ) , and so on . Unlike stock trading , there is no centralized trading forex . All transactions and transactions carried out directly by telephone or electronic network .
Currency trading who make that happen ?
Daily flow between countries of the world are generally 2 main sources . These include :
Foreign trade ( 5 % ) . Foreign trade turnover of goods . In other words , exports and imports of goods in line with cash flow .
Trading profit ( 95 % ) .
Most traders ( trader ) between most of the major currencies , mainly transaction . These major currencies "The Majors" , which is called the U.S. dollar and the Japanese yen , Euro , British Pound , Swiss Franc , Canadian Dollar and Australian Dollar . Total forex trading account for over 85 % of these major money transactions between units .
The world 's largest transactions occur markets .
Forex market daily average turnover of U.S. $ 3.2 trillion , is measured by the world 's other market indicators dominant .
Lasts for 5 days , 24 hours , 7 days of trading . The first trading begins in Sydney , Australia stock , and then Tokyo , London and New York , Sydney , of course again , will continue trading . In other words , for 5 working days Forex trading continues around the world .
Unlike other financial markets , investors invest in both day and night, and recall operations can be done directly .
Forex quotas or exchange (Forex Quotes) What is it?
Forex combinations comparative exchange rate at the time , and that quota XXX / YYY mark . For example , USD / JPY , etc. . The following 2 items have been identified , while a quota is a very simple thing to understand Forex :
Commercial units are always in pairs , the first currency is called the base unit .
Basic unit value is always equal to 1 .
Forex market is the most common unit of the foundation of this market - leading $ . In other words , the currency mix of the first unit is USD $ 1 shows that the price of other currencies is the means . For example , USD / JPY - 89.77 to $ 1 = 89.77 yen .
USD is the basic unit of the above Graph Celsius USD appreciation , but it is in another currency depreciation .
USD is the base unit can not be cases
USD 3 the following exchange when acting basis points . : British Pound ( GBP ) , Australian dollar ( AUD ) and the Euro ( EUR ) . This the currency combinations GBP / USD , AUD / USD , EUR / USD is written as Graph shows the depreciation of the upward at USD .
In other words , Graph increases , the base unit will understand that this is the stronger graphics worsened depreciation .
Cross currencies
USD- with base called cross currency and in this case , a sum of money in the beginning of the base unit . As the chart also .
Bid and ask spread and what ?
Forex as a bank selling rate for a certain amount of difference is that rate of 2 Bid and Ask is called .
BID is a basic unit to be sold ( sell ) .
ASK that you get the basic units sold , those that ( BUY ) .
But Spread a Bid / Ask is the difference of 2 . In other words , when you buy one currency Ask that the purchase price or more expensive . Back to sell , Bid can sell at that price . But Bid <Ask . So , the IPO profits in the Forex market to drop bid price of your purchase that ask more from the truth , time will have to wait . So Spread brokers that work by using as little as possible , especially since you have to help you . Vary from one broker Spread on the currency pair . Some Spread brokers also fixed while others are variable , depending on demand . Great for combination is traded Spread of brokers is a raise . This Bid / Ask price difference , broker companies are making profits .
What is a Pip ?
The smallest unit of money in the Forex Pip called . It will be on the currency since 4th point in the . Ie 0.0001 = 1pip. USD- Box get 1pip the 1cent 100 smaller equals 1tei . However , in some cases , for example , the Japanese yen , or combined is 0.01 = 1pip where .
Leverage & Margin
Leverage drawing rights , or leverage, that translates to a little help . Using Leverage you trading is very much equal to the subscription amount of money orders . For example , the amount of $ 10,000 to give orders to Leverage 200:1 is the case, you will make investments of $ 50 . The rate desired each pip change direction , you can profit of $ 1 .
Forex drawing rights as the other shares are much higher than the market , and a great benefit as well as granting access , and include the risks that can lead to memory loss . The above example , if the exchange rate has moved in the opposite direction , and so the amount of loss is included . If your broker , the loss in the account , you go up by orders closes . This way , the amount of money paid to you more losses is to prevent falling into debt . However, you can also set itself the expected loss limit . In doing so, the broker , the account can be protected completely depleted .
Profit and loss calculation
Easy to use , to keep using most commercial software / loss automatically calculate . However , this is no way , knowing how it calculates probably good .
For example :
Bid / Ask price is EUR / USD is 1.4616/1.4619 . You buy 1 euro $ 1.4619 , or $ 1.4616 , and is able to sell .
If you think that the euro compared to the dollar will rise , "Buy" or orders to buy or sell the USD will be the euro . And the euro growth waiting .
146,190 EUR 100,000 in this case you bought for $ Suppose (100,000 x 1.4619). Seem a large number , there is not . When drawing rights 200:1 investment of $ 730.95 you can execute the order .
Now, while the appreciation of the euro on the other estimated Ask / Bid price 1.4623/1.4626 was suppose . In fact, it is a small amount of exchange rate changes . However , this small change you much profit bring . So Buy your current brokerage rate of € 100,000 , or 1 euro 1.4623 sold for $ 146,230 with $ are . Now benefits. End balance of $ 146,230 minus the first drawing using the right investment from 146.190 $ (146,230-146,190) = 40 $ ! ! ! Rate changes , only 4 pip profit of $ 40 . However , in the forex market exchange rates change everyday 100pip a common phenomenon .
But now, if the price is not reversed then we are wrong in this case calculated.
Imagine , if you purchase by euro 146,190 $ 100,000 (100,000 x 1.4619). Then, against the anticipated return of $ tight Bid / Ask = 1.4616/1.4619 was . Further, in order to reduce the deficit is expected to be continued this way , even if you have to sell the euro at 1.4611 rate . So you got back $ 146.110 . Loss of ( $ 146,190 - $ 146,110 ) = $ 80 ! ! ! 8pip- change losses of $ 80 you bring.
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