Supply and demand
When a trader wants to open a deal in the Forex market, he should know the currency pair in addition to the price of the pair. In the forex market, the price of the currency pair is symbolized by two symbols: supply and demand, which contains the numbers for this pair.
The price of the order is the highest price in the pair’s pricing; based on this price the trader buys the currency, which is the first to shorten the currency pair. In that case the trader sells the other currency in the abbreviation. The bid price is the lowest price in the currency pair’s pricing; based on this price the trader sells the currency, which is the first to shorten the currency pair. The trader then buys the other currency in the abbreviation. Let’s look at an example: we have a currency pair EUR / USD and its price is 1.3652 / 1.3655. This means that you can buy 1 euro for $ 1.3655 or sell 1 euro for 1.3652. The difference between the bid price and the asking price is the so-called difference points. The difference points is a part paid to trade in the Forex market so-called brokerage commission. Point difference is very small in the exchange market; it is the smallest ten or one hundred times the difference points of banks. For most major groups the value of points difference up to 3 points.
The trading characteristics of the working days of the week in the Forex market
The movement of currency pairs in the Forex market has a trend, the so-called general direction of the market, which is finally followed well, but for more effective action, traders should know its direction at the beginning of the trading week. There are several factors, which make up the trend in the Forex market: First, the currency pairs move on Friday in the US stock market. Second, the opening gap (the price gap occurring at the end of the previous day and the beginning of the next day) at midnight on Monday (Asian trading session) The result is that the broken resistance levels in the pairs often become support levels, These levels begin to move in a certain direction during the week. Between the US session on Monday and the Asian session on Friday the price channel of the highest resistance level (on fractals and skips) sets the starting point for the currency pair, which breaks the resistance up or down and as a base moves the price in the general trend of the market. The first and fundamental characteristic of the behavior of currency pairs in the currency market is their movement on the US stock exchange on Friday. This is the real test of the strength of the general direction of the market and the trend during the weekend news. If the issue of negative news did not affect the currency pairs’ rebounds on Friday, this means that brokers and banks were not prepared for such strong movements and the move should start on Monday. If the currency makes a sharp jump in the direction of the market, there are two scenarios: First, the new wave in the same general direction, for example 400 points, which the currency pair crossed last week, will become the first wave, and the third wave will be in the same direction, Which will be 640 points, 60% longer. Second, be at the beginning of the wave to the middle of the general trend on the four hour charts until the daily and weekly charts, the return will be from 23% to 62%, the movement has a trend, in the new week – a new rebound on the trend. If the market does not start its move on Friday in the US session, it means that the brokers have not determined the direction of the trend or the direction of the movement for next week, and the trend will be known only on the day of the two. From all of the above we can conclude that: Depending on the Elliott wave behavior, Friday will determine the behavior of the currency for the beginning of next week. First, if the potential momentum for the trend is very strong and there is a strong jump in trend on Friday, it can be expected on Monday or Tuesday that there will be a reverse movement (correction) or reversal of trend or a new wave in the direction. Second, if the currency reverses on Friday reversing the general trend, Friday’s move will be reversed (correct) or the first wave will reverse. Thirdly, if the currency does not start moving on Friday, the movement is expected to be formed on Monday or Tuesday. Another important feature of the Forex market is the week’s analysis of the next economic forex calendar. For this purpose it is necessary to identify events that may anticipate and update the general trend of the market. Besides, there is more than one peculiarity. You have to pay attention to the gap, which appears in the middle of Monday night, if the currency pairs opened up or down and what will be the direction of the currency pair later in the Asian session, as a base will move the currency in this Trend next week. In order to win in the market, it is necessary to understand that the trend that is formed during the day does not exist by itself. Every trader should arrive at this important conclusion: the currency makes the bulk of the move until news is released and the smaller part of the movement is observed after confirming the news.
There are many differences between the stock market (USA) and the Forex market. In Russia, the stock market is called the stock market. What is the difference between the two markets? First, the stock ticker starts at 9:30 and ends at 16:00 New York time. That’s why traders who carry out most of the afternoon trades can not trade at this time. On the contrary, the Forex market operates 24 hours (besides Saturday and Sunday, these days have no trading) and this allows traders to not reconcile with the market to choose the most appropriate time for trading itself. Second, because trading in the stock market is done through thousands of shares from different companies it is very difficult to predict which stocks will go up or down, down, it is almost impossible, and also to know them all. For this reason, the selection of some key companies to follow up from other available companies is a difficult task. However, in most cases forex trading is executed in several currencies, where the price is in US dollars. The price of these currencies against the US dollar and against each other is more affected by economic events and news, from the shares of companies in the stock market. It is easier to analyze objective economic factors that affect the state of affairs within countries of interest. As economic news can always be accessed free of charge as a result of regular publication in the media. Thirdly, as economic conditions worsen and the country continues to decline, traders in the stock market face severe problems. Profits in these periods will drop sharply and may reach zero if the investor does not borrow money from the broker to deal with the decline. As a result of the periodic evolution after the collapse, it is always coming up, and may range from some months to some years. In the Forex market, and because of its difference from the stock market, traders are trading in the currency of the bulls and selling the falling currencies. This is the fundamental principle of trading and profit taking in the Forex market. Despite the many advantages of the Forex market on the stock market, 100% profit is not guaranteed in the stock market, there is also the possibility of losing all your money.
Trading in Forex without relying on news
Information has become more accessible as a result of the continuous improvement of the Internet and the means of communication for Forex traders. This is why many traders and investors are encouraged to take advantage of new news releases, read bulletins and other similar information that increase their chances of profit taking. But it is not quite the case: reliance on news can lead to huge financial losses. Why is this happening? Without detailed consideration of this matter, the real reason for understanding this reason would hardly be a concept. So let’s do a thorough analysis: most novice traders imagine that the news application on trading will certainly be useful. But that’s a mistake. The first thing that is said about the news is that it fully reflects changes in the market. But as a rule, all these assertions are not constant and the reaction of the currency to this news is different than expected. Certainly, the leading centers of supply and demand do not pass on the market, but at the same time there is no logic in their movements. The main reason for reducing the importance of news is the market. That’s why news circulation is almost non-real. Therefore, knowing when the news will be published and what effect it will leave on the market, investors will begin to act. So when news is released to the public it is difficult to see a reaction to the market or there will be no reaction at all, as everything is taken into consideration. It is also important to pay attention to the personality of the people and the real picture that shows the “importance” of the news will be clear. Another reason that affects trading during the news is the emotions of people, which violate a big difference in trading discipline. Similarly, analysts can sometimes be wrong. In some situations when it is better to close the open trade, the trader will not do so, as it is said that there is started to an active movement. At the same time, the news should not be ignored. It is widely known that peaks often occur in the market after news with positive expectations, and bottoms on the contrary after the news is promising. It is possible to conclude that for traders with large capital and who are trading with the major pairs, the correct decision is not to use news trading and instead to apply it to a structured trading method. Because this news is already registered in the system. The news is also part of technical analysis, which is an indispensable component of any well-designed trading system.
The Forex market is the interbank exchange market. The term “forex” refers to currency exchange only, and does not indicate all transactions on currencies. Market operations are trading, speculation and hedging. Thanks to the rapid development of global Internet services. The Forex market offers real opportunities for anyone at any age. It will require Internet access and a trading platform. About Forex In August 1971, US President Richard Nixon expressed his dissatisfaction with the ease of converting from dollar to gold. In December 1971, the Simethonian Agreement was signed in Washington, which stipulated a change in the volatility rate against the dollar from 1% to 4.5% (9% For non-dollar pairs). This put an end to the price stability of the pair. These reforms were aimed at liberalizing the price of gold. Before these changes currency exchange rates were fixed in accordance with the gold price standard, however, after these reforms the volatile gold prices led to the inevitable wobble of the different pairs. This led to the emergence of a new activity which is trading in currencies, so that currency prices do not depend on gold prices but on the supply and demand in the market on different currencies. In January 1976, during a meeting of IMF ministers in Kingston, a new agreement was signed on the international currency system in the form of amendments to the articles of the IMF agreement. A number of countries refused to peg the dollar and gold. However, in 1978 these terms were approved by the International Monetary Fund. Since this moment, currency fluctuations have become the principle of trading in the currency market. The new system of currencies is not based on determining the purchasing power of money on the basis of the equivalent of gold. Countries’ funds – participants in the agreement – have ceased to be associated with the official gold value. Exchange in the currency market started at flexible prices. The establishment of the variable interest rate system has led to the eligibility of central banks to influence currency prices and to influence the economic situation in the country through the application of certain measures. Importers, exporters and banking institutions have become an integral part of the liquidity of the currency and the control of its price as the liquidity of currency rates now reflects the financial situation of the business whether positive or negative. Daily Forex Market Volume: There are no exact numbers, this market has more than one prescription, and there are no mandatory conditions for recording and publishing transaction data. In 2005-2006, the daily volume of the forex market was monitored at about 2-4 trillion US dollars. Part of this money is given to margin trading, which allows contracts to be made for amounts that exceed the real funds of the parties. Regardless of the nature and objectives of the operations, large volume trading ensures high liquidity for the Forex market. Getting Profits from the Forex Market There are a lot of online advertising about how to raise money from the Forex market. However, you should take into account that this is not a regular business and has no fixed pay. You can only determine your pay according to your profits and losses. This work is about starting the investment of the head of the owner with the inevitable risks. Forex trading has many characteristics: no job hierarchy, no capital required, operations are similar, there is no need for continuing education, the possibility of adjusting the rate of profit and loss. These characteristics have made marginal trading attractive to start trading in the currency market with a small budget. You can introduce yourself to the Forex market through demo accounts. For this purpose you only need to choose the brokerage company you want, download the trading platform and then register a demo account. Every action brings profits or losses. To increase the volume of your profits for your losses you should study the Forex market. Once you are fully aware of Forex trading rules, you can become a successful trader.
PAMM is a type of investment, under which funds are transferred to a trustworthy client to operate in a successful trading session so that the other gets a percentage of the profits. PAMM Account Principle The investors put their money into another trading account. The other trader manages the account using the balance of his account and therefore all transactions are automatically removed to the investor account. In the case of increased profits, they are divided between the investor and the trader who managed the account according to the size of the deposit. In addition, the trader wins a percentage of the profit. The risk of investing in PAMM accounts is a very profitable way of trading in the Forex market, especially if the trader does not have enough time to trade in Forex. Moreover, this method can bring additional profits if the core trade is linked to currency trading. However, it should be noted that the trading system on PAMM accounts has a risk level. Trading is done by a trader using the investor’s money, which can bring in profits or losses. This is why it is important to choose the trader who will manage the account. As a general rule, before investing in the PAMM system, the professionalism and professionalism of the selected traders is tested. First, it is important to examine the number of transactions completed and their results, and also examine the extent of the activity of the trader and his experience and skills in trading on PAMM accounts. A successful trader is the right recipe to bring in profits from the investment. Safety degree There are certain rules to ensure the integrity of a PAMM account. First, the trader uses investor funds for trading only. Any other transactions at the investor’s expense are not allowed. PAMM accounts also include that the trader trades his money to make his own profits as well. All account manager operations are transparent and monitored at any time, in addition to the speed of withdrawals from PAMM accounts. Moreover, the investor determines the risk level himself, and limits the potential losses. In order for investors not to lose their money and receive inconsistent profits, investors should adhere to basic security rules: working with the account manager through a brokerage firm only. Otherwise, the investor bears the risk of losing all his money.
A stop loss order is widely used in order to limit loss in case of negative market movement. A stop loss order is used only with open positions. When the market situation is unfavorable to see the trader and the price reaches the stop loss level, the transaction is automatically closed. Therefore, a stop loss order helps to control its losses and in the event of failures, it helps to maintain the remaining portion of its deposits. If the trader does not use the stop loss order, the transaction will be closed by the broker if the loss volume reaches the trader’s deposit size. There are 3 types of Stop Loss: Stop Loss, Stop Loss and Stop Loss. Fixed stop loss orders are determined with the opening of the deal. It has not been changed until the deal is closed. The stop orders, in contrast, are changed at any time according to price action. It can also be changed manually or automatically according to its rolling settings. At present, there are many discussions about the importance of whether or not to place a stop loss order. Some traders believe that a stop loss order is mandatory and inevitable for trading, with a focus on the ability to limit losses for the entire deposit. If the price moves very quickly in a specific direction contrary to the direction expected by the trader and thus such a thing will happen a big loss. Other traders believe that this limits both loss and profit at the same time. Since the price is always difficult to predict the movement but the price can move according to the view of the trader, but some jumps first hit the stop-loss order. In this case the transaction is closed with a loss, although it is possible to close the transaction without a stop loss order. As a general rule, the decision to place a stop loss order is based on the trader’s own strategy. Therefore, there is no single opinion on the importance of placing a loss order to the limit of losses.
Wave analysis is a technical analysis technique based on Elliott wave analysis theory. Today, this analysis is considered one of the most popular Forex analyzes by novice and professional traders. Furthermore, wave analysis is a fundamental analysis of technical analysis in the currency market.
According to the Elliott Wave Analysis Theory, any currency on the chart is drawn in waves. The waves are divided into three waves moving towards the general trend of the currency, and two corrective waves in the opposite direction of the trend. These waves are encoded in numbers 1, 2, 3, 4 and 5. At the beginning of the trend formation, the price begins with a corrective movement through three waves on the chart. Two of them are impulse waves and the other are corrective. These waves are encoded in A, B and C.
The main point of the wave analysis is that price action is normal and always in the same pattern. The implementation of wave analysis in Forex allows forecasting market movement in a particular part of the trend and indicates the best place to close transactions in a timely manner. To minimize risk and determine the best stop loss level, consider measuring the length of the waves. As a rule, the longer the driving wave, the longer the correction wave is. The most difficult thing about wave analysis is precisely determining the wave size. To predict price action more efficiently, it is necessary to determine which impulse waves are correct and which ones are correct. As a rule, corrective waves are the most difficult to identify. The application of wave analysis allows accurate price behavior to be recognized within a given time frame. This method of predicting price action can be the most important and effective tool for any trader.
Fundamentals of Technical Analysis
Technical analysis is a means of predicting price action by making comparisons in different time frames and by studying the nature of market movement. The application of technical analysis is an indispensable activity for most traders. Technical analysis is based on three general principles: 1. Market movement is taken into consideration by everyone. Price is always influenced by external factors. However, technical analysis means that the verification of the political, economic and financial factors that affect the movement of prices is not obligatory , As price action is the main indicator as it is. Any minor effects are considered and reflected on the price movement, so this will be the reason why this is considered. 2. Price movement in a certain direction to apply technical analysis It is necessary to understand the meaning of the trend. The main objective of the technical analysis is to determine the direction of the price in order to trade in the direction of the trend. There are three types of bonds: • Ascending when the price moves up • Down when the price moves down • Side – There is no specific direction The price moves to it As a general rule, through the price movement you can get all types of bonds, but one trend will be dominant. It should be borne in mind that changing the direction of the trend occurs only after certain signals have emerged. 3. History repeats itself This principle implies that rules and types of analysis do not change, and that on pre-conditions price movements are repeated at different time intervals. The dynamics of the market are first studied through charting techniques during technical analysis. The main instruments are as follows: • Oscillators • Japanese Candlesticks • Drawing Columns (Periods) • Linear Chart • Trends Indicators • Wave Analysis Technical analysis can be the fundamental predictor of the currency market. This analysis is used successfully by professional traders and forex analysts. Their extensive experience in Forex helps them to use technical analysis in trading.
Forex and Securities Markets (Stocks)
The Forex market and the stock market (stocks and securities) are markets that are independent of each other and have no relationship. The difference between them is that in the Forex market currencies are traded, while in the stock market the shares are sold and bought. Forex markets are often located in currency markets. The world’s largest Forex markets are in New York, London and Tokyo. There is another fundamental difference between the Forex market and the stock market and is in the amounts through which the trading is conducted. In order to buy shares in the stock market, you need capital of $ 10 and up to $ 100,000. In the stock market, trading is conducted at a steady and moderate pace, unlike the Forex market, where in a short time you can make huge profits or suffer large losses. Some traders after saving capital in the Forex market, moved to the stock market later. The stock market is in turn divided into a primary market and a secondary market. The basic market plays an important role in the market economy of the state; the pace of development and effectiveness of the state depends heavily on it. Here are the securities issued for the first time. Those who purchase securities in this market, as a rule are individuals and investment institutions (investment funds, insurance companies and so on). Securities in the underlying market are developed in such a way that they are transformed into investors directly and through intermediaries. The secondary market includes a market for trading outside the exchange market itself and the stock exchange. Here the issued securities and securities are sold to other investors. Unlike the primary market, the secondary market has no impact on the volume of investment in the country. The main participants in this market are speculators who buy securities at low prices and sell them at high prices. One of the largest regulators in the stock market is price. Its composition is comprised of specialists, agencies, brokers and investors. Prices in the stock market are formed in accordance with several principles: the profitability of securities, their direction, the reduction of their profits, the demand for investors, the differences, the decline or increase of their revenues. These principles have been realized through the strategies of price in the stock market: to prepare the highest and lowest price, to collect the profits from selling quickly, to enter the market and own part of the market. Working in the stock market can be done in different directions. Shares are bought for: profit by changing their prices, obtaining dividends, etc. In spite of the stability and security of the stock market, the analysis must be carried out before doing the work in order to reduce the risk of investment.