High Leverage Margin

High Leverage Margin

Forex brokers offer trade margin of 50, 100, 150, or even 200 to 1 of trade margin.
Forex traders often find themselves controlling a huge sum of money with little cash outlay on the table. For example, a $1,000 in a 150:1 Forex account will gives you the purchase power of $150,000 in the currency market.
While certainly not for everyone, the substantial leverage available from online currency trading firms is a powerful, moneymaking tool. Rather than merely loading up on risk as many people incorrectly assume, leverage is essential in the Forex market.
This is because the average daily percentage move of a major currency is less than 1%, whereas a stock can easily have a 10% price move on any given day.

High Liquidity Market

Turnover value in Forex is $1.9 trillion per day. It is the largest trade market in the world and the liquidity of the market is huge. Traders can easily cash in or cash out their capital in Forex market.

How to read Forex Quotes ?

Reading Forex quotes is easy although it looks a bit confusing at the beginning
Currencies are always quoted in pairs. Each pair of currencies thus constitutes an individual product and is traditionally noted XXX/YYY, where YYY is the ISO 4217 international three-letter code of the currency into which the price of one unit of XXX currency is expressed.
The first currency in the quotes act as the 'base currency'.
For example USD/JPY, EUR/GBP, and GBP/AUD, in such cases, USD, Euro Dollar, and Britain Pound are acting as the base currency. Base currency in a Forex quote will always has a value of 1. USD/JPY indicates how much Japanese Yens you can buy with 1 United States Dollar; similarly EUR/GBP indicates the exchange rate of Great Britain Pound with 1 Euro Dollar.

FX Quoting: Bid/Ask and Spread

There are sometimes that you can only see one price but often currency exchange price are display in pairs with 'bid price and ask price'.
For example EUR/USD 1.2385/1.2390, 1.2385 is known as the bidding price, while 1.2390 is the asking price. Bidding price is the price that you sell the base currency (EUR in our case here); asking price is the price that you buy the base currency. The different of the bidding and the asking price is called 'spread'.
You might notice that bidding price is always lower than the asking price. Ever wonder why? The different of the bid-ask price (socall 'spread') is how currency brokers make profits without charging commissions to their clients (sell high and buy low in the same time

What's a pip?

A pip is the smallest value in a Forex quote. Take our example earlier on EUR/USD. If the exchange rate goes from 1.2385 to 1.2386; that's one pip. In mathematical definition, a pip means the last decimal place of a quotation.
Note that as each currency has its own value, the value of a pip is different from one another. Say USD/JPY rate at 120.75, a pip would be 0.01 (the second decimal place); while for EUR/USD 1.2385, a pip would be 0.0001 (the fourth decimal place).

Example of Forex Quotes

Confused about the quotes? Don't worry too much about it, you'll get used to them as soon as you move on and start your trades.
For the beginners, here are some quick examples. Try not look at the answer and determine the value of bid price, ask price, spread value, and the pip value.

EUR/USD 1.2385/1.2390

Base currency= Eur
Bid price= 1.2385; Ask price= 1.2390
When selling Euros, 1 Euro = USD$1.2385; when buying Euros, USD$1.2390 = 1 Euro.
Spread = 1.2385 - 1.2390 = 0.0005
Pip value= 0.0001

EUR/JPY 127.95/128.00

Base currency= Eur
Bid price= 127.95; Ask price= 128.00
When selling Euros, 1 Euro = JPY127.95; when buying Euros, JPY128.00 = 1 Euro.
Spread = 127.95 - 128.00 = 0.05
Pip value= 0.01

GBP/USD 1.7400/10

Base currency= GBP
Bid price= 1.7400; Ask price= 1.7410
When selling Pound, 1 Pound = USD$1.7400; when buying Pound, USD$1.7410 = 1 Pound.
Spread = 1.7400 - 1.7410 = 0.001
Pip value= 0.0001

USD/JPY 119.8

Base currency= USD
No bid-ask price is displayed, spread value not available.
Pip value= 0.1
Getting used to the quotes now? Well, don't feel down if you're still slow... you'll be picking up on reading them as you move along.

What is forex ?

So, you wanna make some bucks via Forex trading. Before you read further, let us warn you that 7 out of 10 traders keep losing money in Forex market; while the rest of the 30% work freely at home and earn millions annually.
What makes the difference is that the top 30% are either those with insider news, or those with skills and knowledge.
It is no secret that the foreign currency exchange (FOREX) market is a market full with crocodiles that you will lose your hard-earned money in a fraction of second. Yes, that's right! If you wanna make money in Forex trading, you either have to build up the network with so-call insiders (which seems a wasteful of time and energy to us); or, educate yourself well enough.
If you ever wish to get into this trading game, you better LEARN Forex trading before you start trading Forex. Forex market is definitely not a game for newbie and you need to brush up your skills before getting your hands wet.

A very brief intro on Forex trading
Foreign currency exchange (Forex) market is the largest trading market in the world. It yields an average turnover of $1.9 trillion daily. The figure is nearly 30 times larger than the total volume of equity trades in United States.
Forex is a very unique market.
Trades are always done in pairs, traders are basically buying and selling money in the same time. Beside of trading in pairs, Forex is also very special as it has no centralized trade location and trades are done around the clock.
Unlike any other financial market, investors can respond to money-value fluctuations caused by economic, social and political events at the time they occur - day or night.

What is Fibonacci numbers

In mathematics, the Fibonacci numbers are the following sequence of numbers:

By definition, the first two Fibonacci numbers are 0 and 1, and each remaining number is the sum of the previous two. Some sources omit the initial 0, instead beginning the sequence with two 1s.
In mathematical terms, the sequence Fn of Fibonacci numbers is defined by the recurrence relation

with seed values

The Fibonacci sequence is named after Leonardo of Pisa, who was known as Fibonacci (a contraction of filius Bonaccio, "son of Bonaccio".) Fibonacci's 1202 book Liber Abaci introduced the sequence to Western European mathematics, although the sequence had been previously described in Indian mathematics .
The first 21 Fibonacci numbers (sequence A000045 in OEIS), also denoted as Fn, for n = 0, 1, 2, ... ,20 are: 8 , 9
F0
F1
F2
F3
F4
F5
F6
F7
F8
F9
F10
F11
F12
F13
F14
F15
F16
F17
F18
F19
F20
0
1
1
2
3
5
8
13
21
34
55
89
144
233
377
610
987
1597
2584
4181
6765
Using the recurrence relation, the sequence can also be extended to negative index n. The result satisfies the equation

Thus the complete sequence is

Free Forex learning class

The Foreign exchange market is a nonstop cash market where currencies of nations are traded, typically via brokers. Foreign currencies are constantly and simultaneously bought and sold across local and global markets and traders' investments increase or decrease in value based upon currency movements. Foreign exchange market conditions can change at any time in response to real-time events.

The participants in the currency exchange markets have traditionally been the central and commercial banks, corporations, institutional investors, and hedge funds managers. In 2002, Bank of America alone made a $530 Million profit in Forex trading as stated on their annual statement under "Global Investment Income". In 1986, Caterpillar made a 100 Million profit in Forex trading and would have actually had an operating loss for the year on their normal business if it were not for that profit from Forex. In 2003, half of Daimler Chryslers 2Q operating profit was from currency trades, making more money on foreign exchange than by selling cars.

Due to its popularity and the potential for very lucrative returns on investment, many private investors have also migrated into this fast growing arena. Some of the major reasons why private investors are attracted to currency exchange market and short-term Forex trading are:

* The Forex market is open for business around the clock. Nonstop 24 hours a-day 7 days a- week access to global Forex dealers are at the disposal of the trader.
* The Forex market is the biggest market in the world. It is an enormous liquid

market, with a daily turnover of more than 2.5 trillion dollars, making it easy to trade most currencies around the clock.
* The Forex markets can be very volatile due to the interdependencies of the world economy on current events. As such, the Forex market offers opportunities for huge profit potentials that are derived from volatilities of world currency prices.
* The Forex Market contains inherent standard instruments for controlling risk exposure.
* An investor has the ability to profit in both a rising or falling market.
* The investor can maintain leveraged trading with relatively low margin requirements.
* The Forex trader has many options for zero commission trading.

Just like in any other market, the goal of the investor in Forex trading is to make profits from price movements. In Forex trading, an investor makes money by trading foreign currencies and the trading is always done in currency pairs. For example, the exchange rate of EUR/USD on Jan 15th, 2004 was 1.0757. This number is also referred to as a "Forex rate" or just "rate" for short. If the investor had bought 1000 euros on that date, he would have paid 1075.70 U.S. dollars. One year later, the Forex rate was 1.2083, which means that the value of the euro (the numerator of the EUR/USD ratio) increased in relation to the U.S. dollar. The investor could now sell the 1000 euros in order to receive 1208.30 dollars. Therefore, the investor would have USD 122.90 more than what he had started one year earlier. However, to know if the investor made a good investment, one needs to compare this investment option to alternative investments. At the very minimum, the return on investment (ROI) should be compared to the return on a "risk-free" investment. One example of a risk- free investment is long-term U.S. government bonds since there is practically no chance for a default, i.e. the U.S. government going bankrupt or being unable or unwilling to pay its debt obligation.
The whole premise behind trading currencies is that, the investor trades only when he expects the currency that he is buying to increase in value relative to the currency he is selling. If the currency he is buying does increase in value, he must sell back the other currency in order to lock in a profit. An open position is a trade in which a trader has bought or sold a particular currency pair and has not yet sold or bought back the equivalent amount to close the position. However, it is estimated that anywhere from 70%-90% of the FX market is speculative. In other words, the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end; rather, they were solely speculating on the movement of that particular currency. Most of the remaining percentage of the forex market belongs to hedging (managing business exposures to various currencies ) and other activities.

Forex trades (trading onboard internet platforms) are non-delivery trades, i.e., currencies are not physically traded, but rather there are currency contracts which are agreed upon and performed. Both parties to such contracts ( the trader and the trading platform ) undertake to fulfill their obligations: one side undertakes to sell the amount specified, and the other undertakes to buy it. As mentioned, over 70% of the market activity is for speculative purposes, so there is no intention on either side to actually perform the contract (i.e., the physical delivery of the currencies). Thus, the contract ends by offsetting it against an opposite position, resulting in the profit and loss of the parties involved.