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Just like there are orders that get you into a trade, there are orders that can get you out of a trade. There are 2 kinds of exit orders, they are: 1. Stop Loss order 2. Take Profit order Each of these orders will take you out when you are in a position, and each are something you can change as you are in the trade. Stop Loss order: This is an order that goes behind you in the market. That is to say if you are buying, going up, the Stop Loss order (SL) will be placed under your current position. If you are selling and want the price […]

An order is how you get into a trade and there are 2 ways to place an order to enter the market with your Forex broker. You can place an order that gets you in the market instantly or there is an order that gets you in when the market gets to a specific price that is not the price it is at currently. It’s important to know the difference between these orders as it will save you a lot of frustrations and time when you go to place an order. There are the Forex traders’ generic terms and there are the MT4 terms, I will give you both. An […]

Margin goes hand in hand with leverage. Leverage is the amount you can magnify your position, margin is the amount of money you have to put up to trade a position. Currently in the US, brokers can offer you 50:1 leverage and that equates to 2% margin. With 50:1 leverage you can trade $1000 by putting up $20 of your own money. $20 times the 50:1 leverage equals the $1000 you can trade. The $20 that you have put up is the margin required to hold the $1000 position. $20 out of the $1000 equals 2%, so the margin is 2%. 50:1 leverage = 2% margin 100:1 leverage = 1% […]

One of the biggest attractions to the Forex markets is the leverage FX brokers are able to provide. Traders are leaving Stocks and Futures to trade Forex because the leverage is so attractive. So what is leverage? Leverage is a magnifier. It takes the money you want to put up to trade and magnifies its value. Trading currencies means you are buying and selling with the expectation that the exchange rate changes in your favour. These changes are 100ths of a cent so they don’t amount to much, but with the power of leverage you can make a small change magnify into a larger change. Right now in the US, […]

There are several Forex terms you will hear over the next little while, but the ones you will hear the most refer to the ups and downs of the market. Terms that relate to the markets going up: Buy – to enter a trade with the expectation that the value rises, or the chart goes up. Long – as to take a Long position, you can go Long. Bull – as in a Bull market, the Bulls have taken control, currently you are Bullish on the Euro. Terms that relate to the market going down: Sell – to enter a trade with the expectation that the value falls, or the […]

There are 2 major ways to analyze the markets to make our decisions to enter a trade. They are: 1. Fundamental analysis 2. Technical analysis There is nothing saying that you have to analyze the markets in only one of these ways, you can combine the 2 and get a better overall feel for what the markets will do. Let’s talk a little about each kind of market analysis. Fundamental Analysis This way of evaluating market movement is based on what is going on in the world. Taking a look at the economic, political and social forces will give you a good idea how the market will move. As a […]

Have you noticed that when you see a currency pair, it is always in the same order? I mean the base currency is always the base currency and the quote currency is always the quote currency for that pair, never switched around. Also, you may have noticed that the USD is not always the base currency either. Sometimes it is, but other times it’s the quote currency. Each currency is abbreviated with a 3 letter code as established by the International Organization for Standardization (the ISO). The ISO 4217 code list is the established norm in banking and business all over the world for defining different currencies. The rules for […]

In order to trade in the Forex markets we need something that increases or decreases in value. Pairing 2 currencies together gives us this market value fluctuation we are looking for. Each currency can be exchanged for another currency, and this rate of exchange changes on a per second basis. The changes are very small, only 100ths of a cent, but that is all we need to make money trading the Forex markets. When two currencies are paired together, we are looking for the rate of exchange to change in comparison with one another. As one gets stronger, the other one weakens in comparison. As they say, it’s all relative. […]

A pip used to be the smallest increment that a currency pair’s rate of exchange could change. Pip stands for “Percentage In Point”. For example, if a currency pair’s exchange rate is 1.2000 and then changes to 1.2001, we would have a change of 1 pip. A change from 1.2000 to 1.1950 would be a change of 50 pips. It can change up or down, this is not important as we can make money either way. I say a pip USED to be the smallest change, this has changed over the last year. Several brokers are now using something called a “Fractional Pip”, this is another decimal place and is […]

Now that you have considers trading the Forex markets, it might be a good idea to know what it is you are trading. The word Forex is short for Foreign Exchange. Known as the Forex market, FX, and Currency markets, what you are trading is the exchange rate between 2 currencies. Let’s look at an example of this. Let’s say you are traveling from the US to Canada. While at the airport you decide to change your 100 US dollars to Canadian dollars. In return for your US dollars you receive 100 Canadian dollars (this conveniently occurred when the two currencies are even). You tour Canada and finally it’s time […]