Currency Trade Pro

Archive for March, 2010

Pairs that do not contain the USD (EUR / JPY, GBP / CHF, AUD / JPY, EUR / GBP and GBP / JPY) How to calculate profit / loss are as follows:
Profit = (Selling Price – Purchase Price) x Rate Base Currency Current / Rate Pair x contract size x lot
Example:
Sell one standard lot of EUR / GBP at 0.6760 price
(EUR / USD is the base currency of EUR / GBP, because the front of the EUR / GBP is the Base Currency)

Buy a standard lot of EUR / GBP at 0.6750 price Rate EUR / USD: 1.1840
Profit = (0.6760 0.6750) x 1.1840 / 0.6750 x 100 000
Profit = $ 175.4

Margins and Leverage
The term margin leverage in the forex margin trading means that if you want to make trades for $ 10,000, you do not have to provide $ 10,000 but $ 100 is enough to provide meaningful leverage 1:100 as a guarantee fund to your broker. Leverage the value of this variety are usually in a ratio of 1:50, 1:100, and 1:200

So like you have the cash $ 1,000 in broker who has the leverage is 1:100. This means you can trade with the amount to nearly $ 100,000 (or almost 100 times of your capital). This also means that to use a $ 100,000 contract size.

The advantage of the leverage is with a smaller capital you can speculate with a total contract size / lot the same as if you did not use leverage. Or it can be said, with an equal capital, you can use the contract size is greater than not using the leverage. So with the same capital, you have a chance to get profit per pip is greater.

If you read the statement mentioning that Forex is easy then you should not believe it and you just have to throw it out from your mind. Statistical survey results stating that 90% beginner traders suffered loss. And only 10% that can use forex for a living (trading for living).

Easy is the way to play, but hard to win or gain profit. You must be brave sacrifice of time, even thought the money so that later you can really become expert. You must test your skills in a range of time, 1-2 yrs so really your trading method and the way a tested and proven.
Here are some tips that may help you in forex trading:

1. Demo Account: Demo account / virtual provides an opportunity for us to trade significantly, but using virtual money. So that you can use to test the ability and methods used for your router. And be sure to test it in a long time range 6 months to 1 year. New thereafter if you managed to boost your profits by becoming a live account.

2. Learning: Many methods of analysis method used in playing forex. Generally is a technical and fundamental analysis. Then the second study the science of it either through books, forums, seminars, e-books, or to the people who are more experienced in that field.

3. Personal style trading: After you read the articles (web / forums / etc) you will be confused by the many kinds of trading styles. This is reasonable because this style is highly subjective, masing2 different people. So grab a suitable one with your style (time, risk ratio, emotions) and the style test and evaluation. Until eventually you find a style of play forex your trading style and of course bring in profit.

4. Community: Try to form a community (friends) so you can quickly exchange information with the forex. This will speed up your learning.

5. Do not be a gamble: People gamble often rely on ‘feeling’ and ‘emotion’, if this is a feature or your style, you better not forex trading. You will lose and just burst spending money alone. You must know, you should not be emotional, you need discipline and you should be rational and can think clearly and self-control.