If you ever wanted to know how currencies are traded in the world of finance, then you need to understand the business of Forex trading. Exchange of currencies between various nations of the world is an important and integral part of the global financial circle that we now live in.

Did you know that Forex market is even larger than the stock market? Forex trading in the spot market has gained popularity in the past several years because it is the tangible asset on which futures and forwards markets rely upon but which do not actually trade currencies like the spot market does.

Currencies, like the stock market, have a real time exchange price and are traded on the Forex exchange (bought and sold in real time) in the spot market. Forwards and Futures markets only deal in contracts for any particular currency type, a price per unit, and a future date of settlement. In the forwards market, two parties on the OTC buy and sell contracts, and they have to decide on the terms of the deal by themselves.

In the futures market, people can buy and sell contracts based upon a standard size and settlement date on public commodities markets. In every case, it is a binding contract and settlement is generally done during expiration time in cash. Large companies and funds mainly deal with the futures and forwards markets while the retail trader in the forex trading world deals in the spot market only.

Though big corporations use the futures and forwards markets to hedge against any unknown and volatile exchange rate fluctuations, speculators can get involved in the forex trading business as well. When a currency is quoted on forex, there is another currency that it is quoted in relation to, so the value of one currency is made visible through the value of the other currency.

Basic Terms of Forex Trading

Foreign exchange trading, or Forex trading, has become hugely popular over the past few years. Many traders have realized that there is potential in the Forex market, and they can make a lot of money if they trade intelligently. However, the Forex market is extremely complex, and it can take a while to get a full understanding of how everything works. Here is a look at some of the basic terms and characteristics of Forex trading.

Trading Hours:

Forex trading takes place 24/7 for five days a week. The first trade of the week begins at 22:00 GMT on Sunday, and the last trade comes to a close at 21:00 GMT on Friday. Depending on the instruments being traded, there may be specific trading hours. However, most instruments will be open for trade as long as the Forex market is running.

PIP:

PIP is short for Percentage In Point. This is the equivalent to the smallest price difference that can occur to an exchange rate. For example, if an exchange rate changes from 1.1215 to 1.1216 the change of .0001 can be defined as the PIP.

Leverage:

A person is trading with leverage when they are using borrowed money to increase their potential return on a Forex investment. Leverage allows you to increase the purchasing power you have. For example, someone who makes a deposit of only $1000 can use leverage to get purchasing power up to $30,000.

Spread:

This is the different between the buy and sell prices for two different currencies. As an example, we will take the Euro and United States dollar. If they EURO/US Dollar exchange rate is trading at 1.43 for buy and 1.4295 for sell then the spread of the trade is 5 PIPS.

Automatic Rollover:

Automatic rollover allows an investor to keep their position open for as long as they want. Every new position that is opened has an expiry date. If that expiry date is reached, the processes will be automatically rolled over until the next expiry date (or a time of your choosing).

Automatic Risk Management System:

The automatic risk management system at iForex (www.iforex.in) is designed to ensure that you do not lose more than your initial investment. This ensures that whenever the market is turning against your prediction, you are closed out of that trade when you are at a risk of losing more money than you put in.

Example of a Trade on iForex:

You open up your trading account and decide to invest $200. iForex allows you to increase your leverage up to 400, which means you can open up a trade for as much as $80,000.

However, you decide that you do not want to put in too much leverage. Thus you decide to leverage at 10 times what you put in. You have also chosen to trade in Euros/US Dollars. The currencies are trading at 1.33 when you begin your trade, and you purchase 2000 euros ($2660).

After a few days pass, the value of the Euros/US Dollars is now 1.345. At this price, you decide to convert your 2000 euros back to Dollars and it leaves you with $2690. This means that you made a total profit of $30 on the trade.

The Best Approach To Forex Trading

Sifting through the internet you’ll find a great many articles claiming that a particular strategy is the best, most sure-fire way of making money from trading currency. The fact is that different approaches will suit different investors depending on the level of risk that they’re willing to accept and the amount of time that they intend to spend actively trading on the market. However, there are some basic rules and strategies that everyone should take into account when trading forex.

The first thing to note is that to trade currency you will either require vast sums of money or access to a broker that is willing to offer leverage. The fact that spread betting providers allow you to bet significant sums on currency pairs with only a small deposit makes this an attractive approach for currency speculators with more limited means. Spread betting with IG and other providers also currently has significant tax advantages in the UK.

As ever with any form of trading that involves leverage be sure to set stop losses so that you’re protected if the market unexpectedly turned against your position.

For all traders, including those who are primarily engaged in technical analysis, it is worth giving yourself a grounding in the fundamentals that affect currencies. Without an understanding of how data like oil prices, employment figures and interest rates can influence currencies it is difficult to predict in advance how the markets will move after a particular announcement. You should also know when announcements on relevant data will be made so that you’re ready to act if necessary.

A good approach that many professional traders use when speculating on currency is to trade baskets. An example of this strategy would be if a trader believed that the Australian Dollar was going to be weak for the foreseeable future then rather than trying to pick the one currency against which it would be weakest, the trader would instead buy a basket of currency pairs that each involve the AUD. This has the advantage of ensuring that you won’t lose out due to unforeseen events weakening the one currency you picked against the AUD.

Another good tip is to look for currencies that are correlated. Famously, the Canadian Dollar tends to appreciate with the oil price while the Japanese Yen depreciates. You can help ensure a return from oil price changes by simultaneously betting on one of these appreciating and the other depreciating.

Price Action Strategies for Simple Yet Powerful Forex Trading

Foreign Exchange or Forex trading is expanding its reach exponentially in the recent years, and more traders are pulled into this trading process every day. Though there are a lot of Forex Trading tips, guides and technical essays, some of the most successful Forex Trading companies and individuals are believed to have used the most simplistic methods to succeed in their business. Price Action trading is one of such strategies believed to have helped many traders to become successful. This is because of the fact that the charts used in this strategy are very use to read and understand. There are some important aspects in this strategy apart from its simplicity that makes Price Action as one of the most reliable and most followed Forex trading techniques.

Out of the crowd Strategy:

Two types of analysis methods were commonly used by traders of all sorts: Fundamental Analysis and Technical Analysis. The Fundamental analysis is done by studying financial data, world events and economic figures, whereas the Technical Analysis involves studying technical variables deeply. The former method is too unreliable whereas the latter is too complex for everyone to learn. But the Price Action Strategies are simple, reliable and if used correctly, accurate. It is not comprised of technical terms neither is calculated by taking external factors like world events into account. The only indicator is the price and only for support & assistance, the technical terms and financial data were used.

Clear Charts

Technical Analysis using some of the most complex indicators like RSI and Stochastic gives out a chart that would confuse any normal man. The signals were not clear and were sometimes were not genuine. This leads to the trader in getting anxiety and above all, to lose money by believing false signals. Even though, it requires a lot of technical knowledge about a lot of indicators to draw any information out of those confusing, false leading readings. But, with price as the only indicator, the Price Action charts are so simple to read and drawing trade plans based on the signals are easy as well.

Less Day Trading

It is believed that 95% day traders, i.e. traders who trade every day, lose more money than the traders who trade not so frequently. Experienced and successful traders always suggest less market interaction. The Price Action Strategies prevents a trader from deciding the buying or selling of materials so quickly just by looking at a bearish or bullish signal that may be false. There is a basic rule called “Two Attempts rule” in this type of trading, where a trader has to look for two similar but rhythmic signals before deciding the bearish or bullish behaviour of the market. This in turn reduces the frequent interaction of the trader with the market because two similar signals may take long to appear on the chart and hence quick and negative consequent decisions are prevented.

These are only a part of all the advantages a trader can enjoy while following Price Action techniques. More detailed guides are freely available, helping people to learn and succeed in forex trading quicker than they’ve imagined.

Tips for MCX & NCDEX Trading

The stock market has always ruled the newspapers general, economic, and trade magazines. Reading these news items either puts a scare or the feeling that you can make it in this market. Depending on your optimistic temperament and cautious approach making profitable gains is all possible. Nevertheless, learning to make the right strategized move to invest and make profit can be helped by following tips from professionals in this trading sector who can guide you for long term investments or short term ones. Then there are also options for intraday trading in Intraday NCDEX and Intraday MCX to make safe timely investments. However, it is important that you are aware of the possible risks you might face of losing some money in the stock market.

The amount of efforts and success you need to put should be balanced for effectual gains in this market. The stock market trading importantly involves taking the right decision of the market by studying the market and following the trends. Here, you need to understand that if all those tasks are done by a professionally experienced trading company who provides you with daily tips like Intraday MCX tips for various intraday options and updates to guide you through the procedures and invest wisely for making financial gains.

The right attitude and right moves can help you make the right sort of income. There are a number of professional companies who can help you in learning the ropes of Intraday NCDEX, Intraday MCX Nifty Future, and Intraday Options by providing you tips as stock option contract conveying you the right, without any obligation, for buying and selling shares in safest manner with negligible risk but generous profits. These financial companies generally provide about five or less recommendations and follow-up with you for every recommended stock. Definitely, you need to develop your own understanding, as it is your money and investment plan. Additionally, it is advisable, to go through the terms and conditions along with the level of risk involved.

Investing in commodities also requires proper information to benefits handsomely before investing in commodities. You can opt for Intraday MCX Tips designed basically for traders and brokers working in commodities like gold, metals, and energy to make profits. In these tips the client are provided with around six recommendations every day and you can work with the suitable Intraday Strategy to maximize your returns.

It is important that you understand the various important concepts and ideas from the right source. Of note, you need to know that a number of investors are not able to make decent profits in the commodity market all because they do not study the market. Remember, guesses do not work and could lead to bankruptcy.