All About Forex Trading With Forexgen

Develop a Forex Trading Online Strategy

2008-08-22T10:30:00.000-07:00

If you understand exactly who you are as a trader, you will learn to trade to your strength. Trading to your strengths will only increase your effectiveness if you have a strategy to help you. There are thousands of trading strategies out there today. Just look in any search engine for a forex trading strategy and you will find countless sites about this topic.
There are two basic forex trading strategies; trend-following and range-bound. Any trading strategy that you come across will use indicators and combinations, moving averages, chart patterns, candlesticks, pivot points, Elliot wave analysis, and the list can go on and on. Each of these indicators is simply to help you measure the trends in the forex market.
I would imagine that you are using someone else’s strategy, aren’t you? Don’t worry, because, most of us are too! It is much easier to use a successful trader’s strategy than come up with our own. You must be very careful if you decide to change part of the strategy. I would recommend that before you change the strategy to your liking, you completely understand all aspects of the strategy through actual trading experience.
Most important, don’t jump from strategy to strategy. You should also stay far away from combining two or three different strategies. A lot of traders find themselves doing this and having no success. If you take the time and effort to truly understand the online forex trading strategy that you chose, you will be able to master the strategy and be a powerful trader.

Forex Trading Tools With Forexgen

2008-08-21T15:26:00.000-07:00

The presented Forex tools can assist you both in technical analysis and money management which will greatly enhance your trading results. All these online Forex tools are totally free and can be used at no cost:
MT4 Expert Advisors - Download free expert advisors for a Metatrader 4 trading platform. Test and use these EAs to empower your automated Forex trading and also to help the developing of your own Metatrader expert advisor or Forex strategy.
MT4 Forex Indicators - Free downloads of the MetaTrader indicators for a Metatrader 4 trading platform. You can use these indicators to improve your Forex trading strategy or develop your own MetaTrader 4 expert advisors.
Pivot Points Calculator - Four online web based pivot points calculators will help you to generate pivot points for any given time period. Pivot points are used to as the most important market trend points, where trend can meet support or resistance and actually change its course. Floor, Tom Demark's, Woodie's and Camarilla pivot points building rules are available with this free calculator. You don't need to download any software, just fill the form and get instant pivot point, resistance and support levels.
Pip Value Calculator - How much is one pip? How about EUR/CHF or CAD/JPY? With this free and fast online tool you can find out the value of 1 pip in USD for any lot size and any major or cross currency pair. Fill the form and get the pip value in one moment. No need to download any software!
Fibonacci Calculator - The web based Fibonacci retracement calculator will help you to generate basic Fibonacci retracement values for any given trend. These retracement values can be used as the most natural points of support and resistance for a given trend for any currency pair. On the currency trading market, the use of Fibonacci retracement levels to set orders and targets is one of the best ways to organize trader's portfolio.

Trading Signals ::Dash Board indicator
Dash board is an assisting tool that makes strategies combinations where its calculations depend on volumes and correlations between strategies including a function that weights the indicators’ signal depending on strategies based on trend, oscillators, bill Williams, volumes and custom indicator; it gets the average signal among all the strategies over a specific time frame. It shows the buy/sell signals by different strengths in the short, middle and long periods:
- Short strength expected results may take from 2 to 8 hours to produce profit and the expected gain may reach average 20 to 30 pips.
- Middle strength expected results may take from 8 to 24 hours to produce profit and the expected gain may reach an average of 30 to 60 pips.
- Long strength expected results may take from 1 to 5 days to produce profit and the expected gain may reach average 60 to 30 pips.
Indicator features:
- History mode feature that allows traders to get the dash board indications for any point in history.
- The ability to show or hide all strategies.
- The ability to add or remove any strategy from Dash Board calculations.
- Assigning weights for each strategy in Dash Board calculations.
- The ability to store Dash Board values in files.read more.....

Strategies Tester ::The Strategy tester main structure will be as the following
Strategy tester will enable the traders to apply more than one strategy for one or multi pairs and simulate these strategies in history to see the results of these strategies and try to tune its parameters to achieve its maximum profit and minimum loss.
The system offers reporting facilities to the traders to save the results of each applied strategy and their total profit/loss.
The strategy tester uses the following two components to carry out its process.
Validator
- Validates the prior used strategy to be applied on the historical data.
- Integrate with the optimizer to filtrate the pair’s loops generated by the optimizer.
- Accept ranges from different parameters to enable selecting the ideal setup to produce the maximum expected profit.
Verifier
- Scoring and ranking the time results from using the strategy.
- Providing the trader with feedbacks on different strategies performance.

Disclaimer
The accuracy or completeness of the services supplied connected with this agreement or any information included within will not be warranted or guaranteed by ForexGen. Any person or entity that obtains results from the use of information or software included in the services provided will have no warranties, expressed or implied from ForexGen, neither will ForexGen make warranties of fitness for a particular purpose or use. ForexGen and its partners will not be held responsible for any direct, indirect, incidental, special or consequential damages done to subscribers or any third parties. These damages include without limitation ForexGen's neglecting or either these damages were foreseen or unforeseen. ForexGen will never have any responsibility regarding the delays or interruptions caused by uncontrolled circumstances. The performance of the Internet delivered services are usually affected by the following factors:
Registered client's physical location.
Registered client's systems configuration (browser, processor, operating system and hardware).
Registered client's Internet connection and communication hardware (ISP, network card, modem, gateway).
Data traffic conditions on the internet.read more about forexgen strategy tester

Pair’s Hedging Detector::In today’s financial and business world, the hedging concept can be considered as one of the most important issues traders’ faces everyday. Some people think that applying hedging concepts is something confidential or highly classified; in fact almost all Forex traders in Forex trading market apply the hedging concept. To make this term more understandable we can say that hedging concept can be described as applying insurance in our trading activities In Forex markets, hedging concept is almost the same as getting insurance, the only clear difference is that hedging does not cover for accident; instead, hedging covers for the amount of losses traders might face in Forex trading. Moreover, hedging is commonly applied in the business and financial world where most of traders hedge their transactions in order to protect themselves from losing their gain.for more info....

www.forexgen.com wishes you a profitable trading.

What is an Inverse Strategy?

2008-08-20T17:46:00.000-07:00

In the last post we discussed what a parallel strategy was. Today I would like to discuss the inverse strategy.
The inverse strategy is a little more complex to the parallel strategy as it requires trades moving in opposite directions. So, what is required for this to work is the base and counter currencies on the first pair to be directly opposite to the second pair. Let's take a look at some examples of that.
EURUSD and USDCHF
GBPUSD and USDJPY
AUDUSD and USDCAD
In all three of the above examples, the first pair has the Dollar as the counter currency and the second pair has the Dollar as the base currency. So if the Euro strengthens against the Dollar then we will generally see the Dollar weaken against the Swissy.
The parallel and inverse strategies can be easily identifed almost every morning on the Dynamic Trader Forex Toolkit under the Daily Pivot Points.learn more....

http://www.forexgen.com/

What is a Parallel Strategy?

2008-08-20T17:22:00.000-07:00

Many of us use parallel strategies without knbowing we are and others use it as part of a trading plan. So what is a parallel strategy?
This is by far one of the easiest trading strategies to implement and follow. It requires a technical or fundamental set up and at Dynamic Trader we favour technical set ups. The set up has to be on two pairs that tend to move in the same direction. An exaqmple of that is the Euro v Dollar and Pound v Dollar. Both the Euro and Pound are the base currencies against the Dollar and both the Euro and Pound behave in similar fashions.
As Javid teaches this method on his forex mentoring courses, taking a position on the Euro Dollar based on a set up and taking the same position on the Pound Dollar with similar set up is referreed to as a parallel position and so the name Parallel Strategy.
The Parallel Strategy is a basic strategy but we will require good points for entry and stop as per usual and as always must have good money management.
Some suggestions for you to use the Parallel Strategy on are listed below:
EURUSD and GBPUSD
AUDNZD and NZDUSD
USDJPY and USDCHF
EURJPY and GBPJPY
AUDJPY and NZDJPY
The above listed pairs and crosses are suggestions for the Parallel Strategy but any two currencies pairs or crosses you find are similar in their behaviour can be used.learn more....

http://www.forexgen.com/ wishes best trading for you

Choosing a Forex Broker

2008-08-20T15:47:00.000-07:00

Dynamic traders will tend to have and use more than one forex trading account. New traders starting off in forex looking to open their first account will no doubt be confused as choosing a forex broker is not easy. Your broker, platform and service will be crucial to your trading so deicde carefully.
Forex brokers are in abundance and that makes it all the more difficult for someone new to forex trading to decide which is the right company to go with.
First off, We are not an Introducing Broker or affiliated with any forex broker. An Introducing Broker otherwise know as IB or an affiliate is a person or organization promoting the broker in return for some form of commission either once off or ongoing. Javid was on a seminar where the seminar company was heavily promoting a broker and offering all sorts of freebies if he signed up that weekend. It was clear they were some how associated with the broker and they were serving their own needs and not the seminar attendees requirements.
Never rush into signing up with a broker. You wouldnt buy a car without knowing something about it so don't rush into opening a broker account without knowing more about them.
Choosing a forex broker can be confusing but here are some tips to help you identify the qualities your broker should have.

Low Spreads::

The spreads is the difference between the buy price and sell price and is measured in pips. Compare spreads across a few brokers and look for the brokers with smaller spreads.
Accounts:New forex traders should look to start trading with either a Micro or Mini account. Once experienced then a trader can move onto a Standard account. Your broker should offer a micro or mini account. read more....

Regulation:

The forex broker should be registered as a Futures Commission Merchant with the Commodity Futures Trading Commission (CTFC).

Customer Service and Speed:

Trading in forex is available 24 hours a day from Sunday evening until Friday evening. Customer service should be open during these exact times. Try calling the trading desk or helpdesk to see if they are open and check the speed at which they answer the phone. When in a trade the last thing a forex trader wants is to be kept waiting for the phone to be answered.read more...

Trading Platform:

If you use many different computers you may prefer the trading platform that is web based. If you will be trading from just one computer all the time then downloading and installing the software to your computer will be fine. Check to see if your broker is software based or web based. Some brokers offer both options which would be the better option.
How Many Currencies:Check to see what currencies they offer trading on. As a guidance confirm they trade most of the major pairs and all the ones that you may like to trade in addition.download forexgen META TRADER 4 platform.

Leverage:

How much leverage does the broker offer? For inexperienced traders using mini accounts should not use too much leverage and 100:1 would be adequate in most cases. read more...

Money:

Check what the procedure is to fund your account and also to withdraw your profits including the time it takes to do both.

Tools:

What tools are offered with the account? Some brokers offer an array of charting tools and although useful and well worth having I do not recommend relying on these solely for your trading. You get what you pay for and even though any free tools offered with the trading account is always great, a trader needs to invest in good tools to become a good trader. Advanced Get is one of our favourite trading tools. Read more about this excellent trading software.

The above is just a guideline to help choosing the right broker.

http://www.forexgen.com/ wishes happy trading for you

Two Kinds of Forex Broker: Which Forex Broker is Right for You?

2008-08-20T14:29:00.000-07:00

There are two major types of Forex brokers, and which one is best for you can depend on your specific trading strategies. There are Market Makers (MM) and Electronic Communications Network (ECN) in the Forex market, and knowing the difference between the two is extremely important if you want to be a successful Forex trader.
Market Makers (MM) are brokerage firms that set both the asking price and the bid price. This means that an MM sets up every part of your trade. No matter if you are buying or selling, the MM is your trading partner and taking the other side of that trade, therefore ensuring that your trade will go through.
Electronic Communications Networks (ECNs) take the bid and ask prices from several different market participants (such as individual traders, banks, MMs) and then the bid and ask prices are displayed as bid/ask quotes.
When you place an order to buy, it’s matched with a sell order set at the same price. If there is no match, then your order simply will not take place because you will have no partner to trade under those terms. Unlike the MMs, the broker in an ECN does not take the other side of the trade, and is under no obligation to do so. The partner ends up being whatever trader wants to go the other way with the same .currency pair.

Three positives of an MM:
1. Most market makers have set spreads.2. Market makers normally have user-friendly, downloadable trading platforms that include free charting software3. MMs, since they are your trading partner, tend to guarantee that your orders will almost always be filled.

Three positives of using an ECN:
1. The bid/ask prices are normally better because there are multiple sources used to derive them.2. You can make trades within the spread itself and take the role of an MM.3. Prices are more volatile, which is better for scalping.
Many traders who use diverse styles of trading will have accounts with both types of brokers. In fact, I have accounts with both. Knowing the differences between these broker types will help you know how to have the best set up for each type of trading strategy your system calls for you to use. For some the MM is a better choice, while for others an ECN clearly reigns supreme.
Once you intimately know the pros and cons of both types of Forex brokers you’ll be one step closer to being ready to learn to make a killing in the Forex market.

http://www.forexgen.com/ wishes a profitable trading to you...

Forex Trading Strategies

2008-08-19T17:46:00.000-07:00

The Forex market incorporates two primary types of Forex trading strategies. One such Forex strategy is based on a fundamental analysis and the other is based on a technical analysis. As a trader, you will likely have to incorporate both types of Forex strategies in your overall Forex trading strategy. Fundamental analyses are based on economic factors while technical analyses are based on price. There is a general consensus among market participants that the most highly traded currency pairs in the Forex market tend to be technical and the more exotic currency pairs tend to be more fundamental.While both types of analysis are necessary for successful and profitable trades, most traders tend to rely more on one type than the other. When your Forex trading strategy incorporates technical analysis, you must be prepared to deal with the mathematical concepts necessary to manipulate pricing data. Likewise, when you incorporate fundamental analysis in your trading strategy, you must be prepared to handle the multitude of economic factors necessary to base your trades. In the end, the variety of economic data must be converted into price predictions and many traders resort to technical analysis because it is thought to have a built in mechanism for completing the conversion. However, incorporating a purely technical Forex trading strategy without regard for the fundamental aspects of the market is much like trading on luck. Sometimes you win, sometimes not.Other factors that will influence your Forex trading strategy are your ability to manage money and to handle the psychological implications of participating in the Forex market. While many people have profited from their Forex trading strategies, losses are all but guaranteed with Forex trading systems. One of the nuances of Forex trading is that it involves calculated risks. If your financial situation or emotional circumstance is such that you cannot afford to sustain losses, you will likely loose more than your investment dollars, particularly if your losses are easily converted to physical illness.It is important to develop a Forex trading strategy that complements your lifestyle and temperament. You need to understand the investment, the risks and the impact that your choices will have on your investment dollars and your lifestyle. In Forex trading, it is quite possible for a loss to multiple itself as market conditions vary and change. Your Forex trading strategy must include a plan of action in the case of a loss as well as a win. Another consequence of Forex trading is overconfidence. Overconfidence has caused many traders to engage other more costly and more risky trades following a win or series of wins. You will have to be responsible to dedicate the time necessary to track and analyze the trades that you engage. It only makes since that you engage a number a trades that you are reasonably able to manage during a given trading session. Forex trading can also become addictive for certain personalities. Your Forex trading strategy should include indicators that alert you when it is time to enter or exit trading. You cannot become overconfident about a win or series of wins. Likewise you cannot become too depressed over a loss or series of losses. FOREX trading systems are based on calculated risks and the wrong calculation leads to more risk and the potential for more loss.learn more about forex strategies with www.forexgen.com

Main forex trading strategies:

1.Trend Trade :

One reasons I want you to study this lesson is because it is too easy to get caught up in a complex method or system. Remember, it doesn't matter what approach you take to the market, the market can only do one of three things: 1. Go Up 2. Go Down 3. Go sideways
The move below is such a classic that it is worth studying. The more you can identify and recognize a good move, t he better the chances you have of becoming a good trader. Let's have a look at the first daily chart of the GBP/USD (Pound/Dollar). If you look at the red line marked resistance, you can see that the market tested this area twice before but couldn't break through. This is your first clue. The more a market tests an area without breaking thro ugh, the more likely the move will be explosive when it does happen.
In this particular case, the GBP was unable to break the resistance area for months. The market came back up to the resistance area and that is where you would pay careful attention. In a situation like this, the market will normally do one of two things:
1. Break through previous resistance, in which case you could expect a big move. 2. Fail at this level and make its way back down. Let's look at each scenario. If the market breaks out, we can expect a big move because it has tested this area before and a push above the resistance area will take out a lot of stop loss orders. If this happens we should be ready to jump on and hang on in there until we have reached our target. If we missed the initial breakout, then we should be ready to take advantage of any pullbacks to get in. The second scenario is that the market fails to break through previous resistance and start back down. If the is the case then there is nearly always an area of consolidation. If the market passes back through support then there is an opportunity to go short. learn more....

2.Trading With the Trend - ADX Strategy :

The currency markets are known to trend well. At the same time, catching a trend and staying with it, is not as easy as it seem s.
Price always moves in wave motion, forming impulsive and corrective waves and m any a times a major retracement could be interpreted as a reversal, only to see the trend continue.
The market saying of "trading the pullback" would fit this situation well.
Hence, if we can identify a strong trend and correctly interpret the corrective waves of the trend as a retracement, it would make trading more profitable.
With this in mind, we shall make a system that gives us the ability to trade pullbacks in the direction of the main trend by combining 2 technical indicators. The advantage is that the unique characteristic of each, gives us the combined interpretation that we are looking for. The first indicator is the ADX with the standard setting of 14. It is a trend indicator, which identifies a sustained movement in one direction. Once the ADX rises above a certain level a trend is said to have been established. You stay with trending positions longer, simply by observing that the ADX is not declining. An ADX reading of above 30 indicates that a strong trend is in place and we shall use this parameter for our strategy.
The second indicator is the Exponential moving average with a look back period of 21. The basic use of the EMA 21 is that it often acts as a dynamic barrier of support and resistance. In an uptrend price will remain above the 21EMA and more often than not, find support on the average in a continuing trend.
By combining these unique characteristics of the above two indicators we now define our parameters f or the system. We will define a long trade and the same rules apply f or a short trade by reversing the parameters.
Initially an ADX reading of above 30 is needed, which indicates that a strong trend is in place.
Once this parameter has been met and price retraces back to the 21 EMA we have a buy signal. learn more.....

3.Rate of Change - ROC :

Technical analysis tends to give a mathematical face to the emotional factors, which guide the market. But it is a difficult task to logically dissect the trading activity into a straight forward formula. Hence, it is important to view the market from as many different angles as possible. Looking at the same picture from different angles can often give a better picture to the overall price action.
With this in mind, let's use price action and an indicator to look for potential set up's. The price action can be defined as the normal trading range of the market and we shall use the "Rate of Change" (ROC) indicator to confirm this normal price action or the deviation from it.
The Rate of Change is a simple momentum oscillator that calculates and plots the net change (expressed as a percent) between a bar's price and the price a specified number of bars ago. Basically, it is no different from the Momentum indicator, but it expresses price movement as a percentage around 100 rather than a number of points around a zero line.
The ROC gives a value that will be above 100 (if price is moving higher) or below 100 (if price is moving lower). With the center line set at either 0 or 100, the ROC can be used to identify range bound conditions. As the ROC forms a triangle shape, indicating consolidation we should then take note of what is happening on the candlestick chart.
This is the reason why we have chosen the ROC oscillator. Because, when the market breaks out of its trading range, the ROC will reflect this change as it breaks out of its own .read more...

How to Profit Trading Forex

2008-08-19T13:04:00.000-07:00

Basic yet important things every trader should know.
If you hear from anyone that making money in Forex is easy, do not believe it. It is a myth. The truth is – being profitable in Forex requires a lot of work, dedication, practice, more than a good discipline, sharp knowledge of money management and understanding of the psychology of the currency market. Not so little and therefore not so easy...

Trading Forex was never about gambling:

Trading is not a gambling by guessing where the price will move, although there are many traders (mostly beginners) that are exactly gambling... Trading currencies on the Forex market requires logical and analytical calculations based either on fundamental or technical analysis of price moves.learn more...

Making money in Forex requires a set of rulesa set :

Making money starts with a plan to make money. Such plan is of enormous importance when it comes to trading foreign currencies. But, besides creating a plan, a trader needs constantly follow it. How often trader brake his rules will affect how much money he will make trading Forex. Sounds simple: create and follow... However, there is a real challenge when trader follows the rules but rules fail to make money... it happens inevitably for every trading system known. If system had proven to be successful, sticking to the trading plan and firmly following the rules even when losing money will eventually yield profitable outcome. Having strong trading discipline and taking losses when necessary is a sign of serious trading approach.

Succeeding in Forex by using money management:
To profit in Forex sticking to a set of rules is not enough. Good money management is also needed. Knowledge of how much to trade per each open position and where and when to stop – is what separates successful trader from bankrupt trader. Many beginner traders over-leverage themselves being attracted by big and promising leverages offered by Forex brokers. The truth is that a big leverage is not only about a big win, but also when it comes to be so – a big loss. Leverage higher than 1:20 will not attract serious investors.

Know your losses, before counting profits:
Opening a new trading position must be first of all about how much money may be lost and then what would be the profits. Good money management implies that trader is expecting to win at least twice as much as he could lose on each trade. This way being right only 50% of the time will still make trading profitable.Using good money management in Forex trading is hundred times more important than having any great trading system itself.

Forex traders' mind:
And last but not least is trader’s psychology. Going in profit or losing money always create psychological challenge for trader to act responsively. Not being greedy and also cutting losses short is the key to this game.Trading Forex you need to accept losses. They are inevitable and occur in any money involving operations. Therefore, instead of battling losses trader needs to accurately analyze unfavorable situations and take lessons from losing trades.Every experienced trader would also suggest – there must be no attempts for revenge when losing money. Trying to return your money at any cost will put a trader in deeper troubles. Instead, the trader should return to trading rules and honestly analyze own mistakes, accept that the market was not in his favor and try to improve the trading plan for future success.kindly contact us

Open Demo Account with Forexgen:
ForexGen provides its traders with a free Forex demo account where the trader is allowed to participate in Forex trading with real market conditions and get used to the Forex trading employing ForexGen professionalized online trading platform. A Forex demo account permits the trader utilize the advantages and the benefited features provided by our online trading services. The trader must enter a valid e-mail address to freely open a demo account. You will be able to upgrade to Live Account at any time with minimal efforts.
ForexGen demo account advantages:
Innovated trading with no request for a quote for up to 200 lots (20 million).
The client is provided by a simple system with included options that are easily grasped and used.
Real time prices are usually modified and provided.
ForexGen provides Real time charts with the most famous indicators.
Daily reports for the account status.
Summarization of the current client's orders, account equity, profit and loss ranging.
Exclusive technical analysis provided daily to your mailbox in the Trading Platform. The trading real time technical analysis by Capital Management is sent daily to the trader’s mail
Streaming News headlines are supplied by AFX News.
The ability to form the traders own strategies using the Expert Advisor. Available for real accounts upon written request
Important notes:
When opening a demo account you will have the same features on the system as a real client, however this account is for demonstration purposes only. Please notice that the demo platform is fully automated and does not enjoy the attention of our dealing room. In volatile markets the dealing room may increase the spread slightly for a short period of time, however all temporary changes are only made on the live server and does as such not affect the demo accounts.
To open a demo account you must enter a valid e-mail address.
The demo account is only valid for a period of 30 days. Please be aware that all data will be lost when the demo account expires.Download forexgen Meta trader 4

www.forexgen.com wishes a profitable trading to you

How Forex Trading Works?

2008-08-18T15:26:00.000-07:00

Currency trading is mainly about buy and sell activities. Currencies are traded on a price interest point (normally called pip) system. Every currency pair has their own pip value. The objective of a trader is to hold as many profitable pips as possible. Some pip values are fixed, but some can fluctuate depends on the currency gain or loses strength. Normally I trade by using margin trading, where small deposit is required to control much larger amount in the market. Here I will use 1 percent margin deposit so that $1000 control $100,000 of trade currency. $100,000 is the notional amount. Let me shows some major currency pair with the currency exchange rate and the pip values.

CURRENCY ,Currency exchange rate ,Pip Value

GBP/USD ,1.7204 ,$10.00 per pip (fixed)

EUR/USD ,1.1789 ,$10.00 per pip (fixed)

USD/CAD ,1.1642 ,$8.59 per pip (fluctuating)

USD/JPY ,117.82 ,$8.49 per pip (fluctuating)

For GBP/USD, 1 pip movement can be from 1.7203 to 1.7204. That means from 1.7102 to 1.7202, it should be 100 pip movement. Lets look for another example, USD/JPY, 1 pip movement is from 117.82 to 117.83 and 100 pips movement is from 117.83 to 118.83.learn more...

Foreign Exchange Calculation:

Below will show you how to calculate pip values.
Formula is (1 pip value/currency exchange rate) x (Notional Amount)
For GBP/USD, 1 pip value is 0.0001. Assume currency exchange rate is 1.7204. Notional Amount is GBP 100,000.
Therefore, (0.0001/1.7204) x GBP 100,000 = GBP 0.58
If we want to convert back to USD, then GBP 0.58 x 1.7204 and we will get $1
For EUR/JPY, 1 pip value is 0.01 . Assume currency exchange rate is 138.96. Notional Amount is EUR100,000 . EUR/USD=1.1789
Therefore, (0.01/138.96)x EUR 100,000 = EUR 7.20
If we want to convert back to USD, then EUR 7.20 x 1.1789= USD8.49

make Profit in Forex Trading

Foreign exchange trading is mainly about buy and sell activities. The theory is slightly similar with share market. To make the profit, there is the only way which is buy at lower price and sell at higher price, or we can also sell at higher price first and buy at lower price. Is it very easy? It is actually not that difficult. What we need to do is to analyze the forex in a correct way and do the good trade. Together with good money management and proper guideline, I can say that success will be eventually more on your side.
Sometimes, trader involves in foreign exchange not because of make profit but just do not want to lose money. Let me take an example, A US Construction Company want to build a subway in India and it is going to take about 7 years with $50 million construction cost. The first thing this company will do is to hedge the dollar value of the project. By buying or selling US dollar against the future market value, no matter how big the amplitude of the fluctuation, the company will not lose any money. read more....

Key Concepts Behind a Retail Forex Trade With Forexgen:

2008-08-18T14:25:00.000-07:00

Currency Pairs:
Currency prices can only fluctuate relative to another currency, so they are traded in pairs. Take two of the most common currency pairs, the EUR/USD (the price for euros in US dollars) and the GBP/USD (the price for the British pound in US dollars).

High Leverage:

The idea of margin (leverage) and floating loss is another important trading concept and is perhaps best understood using an example. Most retail Forex market makers permit 100:1 leverage, but also, crucially, require you to have a certain amount of money in your account to protect against a critical loss point. For example, if a $100,000 position is held in EUR/USD on 100:1 leverage, the trader has to put up $1,000 to control the position. However, in the event of a declining value of your positions, Forex market makers, mindful of the fast nature of forex price swings and the amplifying effect of leverage, typically do not allow their traders to go negative and make up the difference at a later date. In order to make sure the trader does not lose more money than is held in the account, forex market makers typically employ automatic systems to close out positions when clients run out of margin (the amount of money in their account not tied to a position). If the trader has $2,000 in his account, and he is buying a $100,000 lot of EUR/USD, he has $1,000 of his $2,000 tied up in margin, with $1,000 left to allow his position to fluctuate downward without being closed out.

Typically a trader's trading platform will show him three important numbers associated with his account: his balance, his equity, and his margin remaining. If trader X has two positions: $100,000 long (buy) in EUR/USD, and $100,000 short (sell) in GBP/USD, and he has $10,000 in his account, his positions would look as follows: Because of the 100:1 leverage, it took him $1,000 to control each position. This means that he has used up $2,000 in his margin, out of a $10,000 account, and thus he has $8,000 of margin still available. With this margin, he can either take more positions or keep the margin relatively high to allow his current positions to be maintained in the event of downturns. If the client chooses to open a new position of $100,000, this will again take another $1,000 of his margin, leaving $7,000. He will have used up $3,000 in margin among the three positions. The other way margin will decrease is if the positions he currently has open lose money. If his 3 positions of $100,000 decrease by $5,000 in value (which is fairly common), he now has, of his original $7,000 in margin, only $2,000 left.
If you have a $10,000 account and only open one $100,000 position, this has committed only $1,000 of your money plus you must maintain $1,000 in margin. While this leaves $9,000 free in your account, it is possible to lose almost all of it if the speculation loses money.

Transaction Costs and Market Makers:

Market makers are compensated for allowing clients to enter the market. They take part or all of the spread in all currency pairs traded. In a common example, EUR/USD, the spread is typically 3 pips (3/100 of a cent). Thus prices are quoted with both bid and offer prices (e.g., Buy EUR/USD 1.4900, Sell EUR/USD 1.4903).
That difference of 3 pips is the spread and can amount to a significant amount of money. Because the typical standard lot is 100,000 units of the base currency, those 3 pips on EUR/USD translate to $30 paid by the client to the market maker. However, a pip is not always $10. A pip is 1/100th of a cent (or whatever), and the currency pairs are always purchased by buying 100,000 of the base currency.
For the pair EUR/USD, the quote currency is USD; thus, 1/100th of a cent on a pair with USD as the quote currency will always have a pip of $10. If, on the other hand, your currency pair has Swiss francs (CHF) as a quote instead of USD, then 1/100th of a cent is now worth around $9, because you are buying 100,000 of whatever in Swiss francs.read more.....

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Algorithmic trading in forex

2008-08-18T13:34:00.000-07:00

Electronic trading is growing in the FX market, and algorithmic trading is becoming much more common. According to financial consultancy Celent estimates, by 2008 up to 25% of all trades by volume will be executed using algorithm, up from about 18% in 2005.

Financial instruments:

Spot:
A spot transaction is a two-day delivery transaction (except in the case of the Canadian dollar, which settles the next day), as opposed to the futures contracts, which are usually three months. This trade represents a “direct exchange” between two currencies, has the shortest time frame, involves cash rather than a contract; and interest is not included in the agreed-upon transaction. The data for this study come from the spot market. Spot has the largest share by volume in FX transactions among all instruments.

forward contract:
One way to deal with the Forex risk is to engage in a forward transaction. In this transaction, money does not actually change hands until some agreed upon future date. A buyer and seller agree on an exchange rate for any date in the future, and the transaction occurs on that date, regardless of what the market rates are then. The duration of the trade can be a few days, months or years.

Currency future:
Foreign currency futures are forward transactions with standard contract sizes and maturity dates — for example, 500,000 British pounds for next November at an agreed rate. Futures are standardized and are usually traded on an exchange created for this purpose. The average contract length is roughly 3 months. Futures contracts are usually inclusive of any interest amounts.

Forex swap:
The most common type of forward transaction is the currency swap. In a swap, two parties exchange currencies for a certain length of time and agree to reverse the transaction at a later date. These are not standardized contracts and are not traded through an exchange.

Foreign exchange option:
A foreign exchange option (commonly shortened to just FX option) is a derivative where the owner has the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date. The FX options market is the deepest, largest and most liquid market for options of any kind in the world.

Exchange-traded fund
Exchange-traded funds (or ETFs) are Open Ended investment companies that can be traded at any time throughout the course of the day. Typically, ETFs try to replicate a stock market index such as the S&P 500 (e.g. SPY), but recently they are now replicating investments in the currency markets with the ETF increasing in value when the US Dollar weakness versus a specific currency, such as the Euro. Certain of these funds track the price movements of world currencies versus the US Dollar, and increase in value directly counter to the US Dollar, allowing for speculation in the US Dollar for US and US Dollar denominated investors and speculators.

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Factors affecting currency trading With Forexgen

2008-08-17T18:08:00.000-07:00

Although exchange rates are affected by many factors, in the end, currency prices are a result of supply and demand forces. The world's currency markets can be viewed as a huge melting pot: in a large and ever-changing mix of current events, supply and demand factors are constantly shifting, and the price of one currency in relation to another shifts accordingly. No other market encompasses (and distills) as much of what is going on in the world at any given time as foreign exchange.
Supply and demand for any given currency, and thus its value, are not influenced by any single element, but rather by several. These elements generally fall into three categories: economic factors, political conditions and market psychology.

Economic factors:
These include economic policy, disseminated by government agencies and central banks, economic conditions, generally revealed through economic reports, and other economic indicators.
Economic policy comprises government fiscal policy (budget/spending practices) and monetary policy (the means by which a government's central bank influences the supply and "cost" of money, which is reflected by the level of interest rates).
Economic conditions include:
Government budget deficits or surpluses: The market usually reacts negatively to widening government budget deficits, and positively to narrowing budget deficits. The impact is reflected in the value of a country's currency.
Balance of trade levels and trends: The trade flow between countries illustrates the demand for goods and services, which in turn indicates demand for a country's currency to conduct trade. Surpluses and deficits in trade of goods and services reflect the competitiveness of a nation's economy. For example, trade deficits may have a negative impact on a nation's currency.
Inflation levels and trends: Typically, a currency will lose value if there is a high level of inflation in the country or if inflation levels are perceived to be rising. This is because inflation erodes purchasing power, thus demand, for that particular currency. However, a currency may sometimes strengthen when inflation rises because of expectations that the central bank will raise short-term interest rates to combat rising inflation.
Economic growth and health: Reports such as gross domestic product (GDP), employment levels, retail sales, capacity utilization and others, detail the levels of a country's economic growth and health. Generally, the more healthy and robust a country's economy, the better its currency will perform, and the more demand for it there will be.

Political conditions:
Internal, regional, and international political conditions and events can have a profound effect on currency markets.
For instance, political upheaval and instability can have a negative impact on a nation's economy. The rise of a political faction that is perceived to be fiscally responsible can have the opposite effect. Also, events in one country in a region may spur positive or negative interest in a neighboring country and, in the process, affect its currency.

Market psychology:
Market psychology and trader perceptions influence the foreign exchange market in a variety of ways:
Flights to quality: Unsettling international events can lead to a "flight to quality," with investors seeking a "safe haven". There will be a greater demand, thus a higher price, for currencies perceived as stronger over their relatively weaker counterparts. The Swiss franc has been a traditional safe haven during times of political or economic uncertainty.[8]
Long-term trends: Currency markets often move in visible long-term trends. Although currencies do not have an annual growing season like physical commodities, business cycles do make themselves felt. Cycle analysis looks at longer-term price trends that may rise from economic or political trends. [9]
"Buy the rumor, sell the fact:" This market truism can apply to many currency situations. It is the tendency for the price of a currency to reflect the impact of a particular action before it occurs and, when the anticipated event comes to pass, react in exactly the opposite direction. This may also be referred to as a market being "oversold" or "overbought".[10] To buy the rumor or sell the fact can also be an example of the cognitive bias known as anchoring, when investors focus too much on the relevance of outside events to currency prices.
Economic numbers: While economic numbers can certainly reflect economic policy, some reports and numbers take on a talisman-like effect: the number itself becomes important to market psychology and may have an immediate impact on short-term market moves. "What to watch" can change over time. In recent years, for example, money supply, employment, trade balance figures and inflation numbers have all taken turns in the spotlight.
Technical trading considerations: As in other markets, the accumulated price movements in a currency pair such as EUR/USD can form apparent patterns that traders may attempt to use. Many traders study price charts in order to identify such patterns.learn more.....

Trading characteristics With Forexgen

2008-08-17T17:57:00.000-07:00

There is no unified or centrally cleared market for the majority of FX trades, and there is very little cross-border regulation. Due to the over-the-counter (OTC) nature of currency markets, there are rather a number of interconnected marketplaces, where different currencies instruments are traded. This implies that there is not a single exchange rate but rather a number of different rates (prices), depending on what bank or market maker is trading, and where it is. In practice the rates are often very close, otherwise they could be exploited by arbitrageurs instantaneously. Due to London's dominance in the market, a particular currency's quoted price is usually the London market price. A joint venture of the Chicago Mercantile Exchange and Reuters, called FxMarketSpace opened in 2007 and aspires to the role of a central market clearing mechanism.learn more.....

The main trading center is London, but New York, Tokyo, Hong Kong and Singapore are all important centers as well. Banks throughout the world participate. Currency trading happens continuously throughout the day; as the Asian trading session ends, the European session begins, followed by the North American session and then back to the Asian session, excluding weekends.
There is little or no 'inside information' in the foreign exchange markets. Exchange rate fluctuations are usually caused by actual monetary flows as well as by expectations of changes in monetary flows caused by changes in GDP growth, inflation, interest rates, budget and trade deficits or surpluses, large cross-border M&A deals and other macroeconomic conditions. Major news is released publicly, often on scheduled dates, so many people have access to the same news at the same time. However, the large banks have an important advantage; they can see their customers' order flow.
Currencies are traded against one another. 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 is expressed (called base currency). For instance, EUR/USD is the price of the euro expressed in US dollars, as in 1 euro = 1.5465 dollar. Out of convention, the first currency in the pair, the base currency, was the stronger currency at the creation of the pair. The second currency, counter currency, was the weaker currency at the creation of the pair.
The factors affecting XXX will affect both XXX/YYY and XXX/ZZZ. This causes positive currency correlation between XXX/YYY and XXX/ZZZ.
On the spot market, according to the BIS study, the most heavily traded products were:
EUR/USD: 27 %
USD/JPY: 13 %
GBP/USD (also called sterling or cable): 12 %
and the US currency was involved in 86.3% of transactions, followed by the euro (37.0%), the yen (16.5%), and sterling (15.0%) (see table). Note that volume percentages should add up to 200%: 100% for all the sellers and 100% for all the buyers.
Trading in the euro has grown considerably since the currency's creation in January 1999, and how long the foreign exchange market will remain dollar-centered is open to debate. Until recently, trading the euro versus a non-European currency ZZZ would have usually involved two trades: EUR/USD and USD/ZZZ. The exception to this is EUR/JPY, which is an established traded currency pair in the interbank spot market. As the dollar's value has eroded during 2008, interest in using the euro as reference currency for prices in commodities (such as oil), as well as a larger component of foreign reserves by banks, has increased dramatically. Transactions in the currencies of commodity-producing countries, such as AUD, NZD, CAD, have also increased.read more.... (http://www.forexgen.com/)

Learn About Forex Market participants With Forexgen

2008-08-17T17:14:00.000-07:00

Forex Market participants:

Unlike a stock market, where all participants have access to the same prices, the forex market is divided into levels of access. At the top is the inter-bank market, which is made up of the largest investment banking firms. Within the inter-bank market, spreads, which are the difference between the bid and ask prices, are razor sharp and usually unavailable, and not known to players outside the inner circle. As you descend the levels of access, the difference between the bid and ask prices widens (from 0-1 pip to 1-2 pips for some currencies such as the EUR). This is due to volume. If a trader can guarantee large numbers of transactions for large amounts, they can demand a smaller difference between the bid and ask price, which is referred to as a better spread. The levels of access that make up the forex market are determined by the size of the “line” (the amount of money with which they are trading). The top-tier inter-bank market accounts for 53% of all transactions. After that there are usually smaller investment banks, followed by large multi-national corporations (which need to hedge risk and pay employees in different countries), large hedge funds, and even some of the retail forex market makers. According to Galati and Melvin, “Pension funds, insurance companies, mutual funds, and other institutional investors have played an increasingly important role in financial markets in general, and in FX markets in particular, since the early 2000s.” (2004) In addition, he notes, “Hedge funds have grown markedly over the 2001–2004 period in terms of both number and overall size” Central banks also participate in the forex market to align currencies to their economic needs.

Banks:
The interbank market caters for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary desks, trading for the bank's own account.
Until recently, foreign exchange brokers did large amounts of business, facilitating interbank trading and matching anonymous counterparts for small fees. Today, however, much of this business has moved on to more efficient electronic systems. The broker squawk box lets traders listen in on ongoing interbank trading and is heard in most trading rooms, but turnover is noticeably smaller than just a few years ago.

Commercial companies:

An important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators, and their trades often have little short term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when very large positions are covered due to exposures that are not widely known by other market participants.

Central banks:
National central banks play an important role in the foreign exchange markets. They try to control the money supply, inflation, and/or interest rates and often have official or unofficial target rates for their currencies. They can use their often substantial foreign exchange reserves to stabilize the market. Milton Friedman argued that the best stabilization strategy would be for central banks to buy when the exchange rate is too low, and to sell when the rate is too high — that is, to trade for a profit based on their more precise information. Nevertheless, the effectiveness of central bank "stabilizing speculation" is doubtful because central banks do not go bankrupt if they make large losses, like other traders would, and there is no convincing evidence that they do make a profit trading.
The mere expectation or rumor of central bank intervention might be enough to stabilize a currency, but aggressive intervention might be used several times each year in countries with a dirty float currency regime. Central banks do not always achieve their objectives. The combined resources of the market can easily overwhelm any central bank.[4] Several scenarios of this nature were seen in the 1992–93 ERM collapse, and in more recent times in Southeast Asia.

Retail forex brokers:

There are two types of retail brokers offering the opportunity for speculative trading. Retail forex brokers or Market makers.Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks. Retail forex brokers, while largely controlled and regulated by the CFTC and NFA might be subject to forex scams[5] [6]. At present, the NFA and CFTC are imposing stricter requirements, particularly in relation to the amount of Net Capitalization required of its members. As a result many of the smaller, and perhaps questionable brokers are now gone. It is not widely understood that retail brokers and market makers typically trade against their clients and frequently take the other side of their trades. This can often create a potential conflict of interest and give rise to some of the unpleasant experiences some traders have had. A move toward NDD(No Dealing Desk), And STP(Straight Through Processing) has helped to resolve some of these concerns and restore trader confidence, but caution is still advised in ensuring that all is as it is presented.

Other:

Non-bank foreign exchange companies offer currency exchange and international payments to private individuals and companies. These are also known as Foreign Exchange Brokers but are distinct from Forex Brokers as they do not offer speculative trading but currency exchange with payments. i.e. there is usually a physical delivery of currency to a bank account.
It is estimated that in the UK, 14% of currency transfers/payments are made via Foreign Exchange Companies[7]. These companies' selling point is usually that they will offer better exchange rates or cheaper payments than the customer's bank. These companies differ from Money Transfer/Remittance Companies in that they generally offer higher-value services.
Money Transfer/Remittance Companies perform high-volume low-value transfers generally by economic migrants back to their home country. In 2007, the Aite Group estimated that there were $369 billion of remittances (an increase of 8% on the previous year). The four largest markets (India, China, Mexico and the Philippines) receive $95 billion. The largest and best known provider is Western Union with 345,000 agents globally.

Forexgen Brokerage service:

ForexGen.com is an online trading service provider supplying a unique and individualized service to Forex traders worldwide. We are dedicated to absolutely provide the best online trading services in the Forex market.
ForexGen provides a unique online trading experience based on our intelligent online Forex trading package, the ForexGen Trading Station, including the best online trading system.
ForexGen serves both private and institutional clients. We have a strong commitment to maintain a long term relationship with our clients.
Throughout our partnership with the industrial leaders, we are capable of delivering incomparable quality of online currency trading service.

ForexGen services are all controlled by the international banking and financial regulatory standards. ForexGen is continuously providing the Forex market's safest trading terms & conditions. Providing professional currency trading services that meet our client's expectations is our first priority.KINDLY CONTACT US

Learn More About Forex Market With Forexgen

2008-08-17T16:42:00.000-07:00

What IS Forex Market?:

The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. It is the largest and most liquid financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The average daily trade in the global forex and related markets currently is almost US$ 4 trillion.

Market size and liquidity:

The foreign exchange market is unique because of
its trading volumes,
the extreme liquidity of the market,
the large number of, and variety of, traders in the market,
its geographical dispersion,
its long trading hours: 24 hours a day except on weekends (from 3pm EST on Sunday until 4pm EST Friday),
the variety of factors that affect exchange rates.
the low margins of profit compared with other markets of fixed income (but profits can be high due to very large trading volumes)
the use of leverage .

As such, it has been referred to as the market closest to the ideal perfect competition, notwithstanding market manipulation by central banks. According to the BIS,[1] average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. Trading in the world's main financial markets accounted for $3.21 trillion of this.
This $3.21 trillion in main foreign exchange market turnover was broken down as follows:
$1.005 trillion in spot transactions
$362 billion in outright forwards
$1.714 trillion in forex swaps
$129 billion estimated gaps in reporting
Of the $3.98 trillion daily global turnover, trading in London accounted for around $1.36 trillion, or 34.1% of the total, making London by far the global center for foreign exchange. In second and third places respectively, trading in New York accounted for 16.6%, and Tokyo accounted for 6.0%.
In addition to "traditional" turnover, $2.1 trillion was traded in derivatives.read more.....

Exchange-traded forex futures contracts were introduced in 1972 at the Chicago Mercantile Exchange and are actively traded relative to most other futures contracts. Forex futures volume has grown rapidly in recent years, and accounts for about 7% of the total foreign exchange market volume, according to The Wall Street Journal Europe (5/5/06, p. 20).

Foreign exchange trading increased by 38% between April 2005 and April 2006 and has more than doubled since 2001. This is largely due to the growing importance of foreign exchange as an asset class and an increase in fund management assets, particularly of hedge funds and pension funds. The diverse selection of execution venues such as internet trading platforms offered by companies such as First Prudential Markets and Saxo Bank have made it easier for retail traders to trade in the foreign exchange market.

[3].Because foreign exchange is an OTC market where brokers/dealers negotiate directly with one another, there is no central exchange or clearing house. The biggest geographic trading centre is the UK, primarily London, which according to IFSL estimates has increased its share of global turnover in traditional transactions from 31.3% in April 2004 to 34.1% in April 2007. RPP
The ten most active traders account for almost 73% of trading volume, according to The Wall Street Journal Europe, (2/9/06 p. 20). These large international banks continually provide the market with both bid (buy) and ask (sell) prices. The bid/ask spread is the difference between the price at which a bank or market maker will sell ("ask", or "offer") and the price at which a market-maker will buy ("bid") from a wholesale customer. This spread is minimal for actively traded pairs of currencies, usually 0–3 pips. For example, the bid/ask quote of EUR/USD might be 1.2200/1.2203 on a retail broker. Minimum trading size for most deals is usually 100,000 units of currency, which is a standard "lot".

These spreads might not apply to retail customers at banks, which will routinely mark up the difference to say 1.2100 / 1.2300 for transfers, or say 1.2000 / 1.2400 for banknotes or travelers' checks. Spot prices at market makers vary, but on EUR/USD are usually no more than 3 pips wide (i.e. 0.0003). Competition is greatly increased with larger transactions, and pip spreads shrink on the major pairs to as little as 1 to 2 pips.

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