I want to share a video with regards to youtube about a begginer Forex trading student with no previous trading experience shares results that cause disbelief among “professional” traders.
February 18, 2008
February 18, 2008
Leonardo Pisano (nickname Fibonacci) was a mathematician, born in 1170, in Pisa (now Italy). His father was Guilielmo, of the Bonacci family. His father was a diplomat, as a result Fibonacci was educated in North Africa, where he learned “accounting” and “mathematics”.
Fibonacci also contributed to the science of numbers, and introduced the “Fibonacci sequence”
Fibonacci sequence is a series of numbers. Every number is being produced by adding the last Fibonacci number to the previous. The first numbers of Fibonacci sequence are 1,2,3,5,8,13,21,34,55,….etc
After the first few numbers in the sequence, if you measure the ratio of any number to that of the next higher number you get .618. For example, 34 divided by 55 equals 0.618.
If you measure the ratio between alternate numbers you get .382. For example, 34 divided by 89 = 0.382 and that’s as far as into the explanation as we’ll go.
Traders use the Fibonacci extension levels as “profit taking levels“. Again, since so many traders are watching these levels and placing buy and sell orders to take profits, this tool usually works due self-fulfilling expectations.
In order to apply Fibonacci levels to your charts, you’ll need to identify Swing High and Swing Low points.
A Swing High is a candlestick with at least two lower highs on both the left and right of itself. A Swing Low is a candlestick with at least two higher lows on both the left and right of itself.
February 18, 2008
An exchange rate is the rate at which two currencies specifies how much one currency is worth in terms of the other. In other words, it is the value of another country’s currency compared to that of your own.
A market based exchange rate will change whenever the values of either of the two component currencies change. A currency will tend to become more valuable whenever demand for it is greater than the available supply. It will become less valuable whenever demand is less than available supply.
A fixed exchange rate, sometimes (less commonly) called a pegged exchange exchange rate, is a type of exchange rate regime wherein a currency’s value is matched to the value of another single currency or to a basket of other currencies, or to another measure of value. As the reference value rises and falls, so does the currency pegged to it.
A fixed, or pegged, rate is a rate the government (central bank) sets and maintains as the official exchange rate.
A floating exchange rate or a flexible exchange rate is the opposite of fixed exchange rate. It is a type of exchange rate regime wherein a currency’s value is allowed to fluctuate according to the foreign exchange market.
It is determined by the private market through supply and demand. It is a country’s exchange rate regime where its currency is set by the foreign-exchange market through supply and demand for that particular currency relative to other currencies. Thus, floating exchange rates change freely and are determined by trading in the forex market.
February 18, 2008
A currency is a unit of exchange, facilitating the transfer of goods and/or services. It is a generally accepted form of money, including coins and paper notes, which is issued by a government and circulated within an economy. Currency is the basis for trade.
Investors often trade currency on the foreign exchange market, which is one of the most heavily traded markets in the world.
A currency is the dominant medium of exchange. To facilitate trade between currency zones, there are exchange rates, which are the prices at which currencies (and the goods and services of individual currency zones) can be exchanged against each other. Currencies can be classified as either floating currencies or fixed currencies based on their exchange rate regime.
Floating currency means that a country’s exchange rate is not fixed or set in place by a main bank, but fluctuates. Fixed currency, on the other hand, is set and is the opposite of floating currency. Fixed currency is also called pegged currency and it is not commonly used, although it is often associated with the Euro and the US Dollar (USD).
February 18, 2008
Here are some lists of tips for forex traders most especially the beginners.
- Educate yourself properly on how trading works
- learn money management
- you should know how much you’re ready to lose
- learn risk management : you should know the risk in forex trading
- you should know have a good strategy and a good system
- do not buy a system! learn to create one
- plan your trader; trade your plan
- implement rules and follow it!
- be discipline in everything
- leave your emotions at the door
- don’t fall in love with a position
- don’t revenge in a position
- read and understand forex charts
- be familiar with technical and fundamental analysis
- learn the basic market direction
- the trend is your friend
February 18, 2008
Many people have mixed up the terms “ Investor ” and “ Trader ” to mean the same thing. They can’t be more wrong. It is exactly the mixing up of these 2 very important terms that led to many people starting on the wrong foot in the capital markets.
So now, let’s differentiate the two:
An investor is any party that makes an investment.
The term has taken on a specific meaning in finance to describe the particular types of people and companies that regularly purchase equity or debt securities for financial gain in exchange for funding an expanding company. Less frequently, the term is applied to parties who purchase real estate, currency, commodity, derivatives, personal property or other assets.
The term implies that a party purchases and holds assets in hopes of achieving capital gain, not as a profession or for short-term income.
A trader is an individual who engages in the transfer of financial assets in any financial market, either for themselves, or on behalf of a someone else.
The main difference between a trader and an investor is the duration for which the person holds the asset. Investors tend to have a longer term time horizon, whereas traders tend to hold assets for shorter periods of time in order to capitalize on short-term trends.
February 18, 2008
Selling US dollars was one of the best trades of 2007. Since the beginning of 2008, the dollar has fallen against EUR, British Pound and other currencies.
Interest rates are the primary driver of currency market fluctuations and that will remain the case in 2008. The recovery of the US economy and the US dollar in the second half of the year will be contingent upon further easing by the Federal Reserve and easing by the European Central Bank.
The question now is will the turn in the dollar last or will the weakness resume in the coming year?
February 18, 2008
The hardest but also most important lesson to learn in trading is how to handle losses gracefully. Most traders will inevitably encounter a string of losses at some point, so those who can’t lose without being thrown off their game won’t survive the market. The traders who have realistic win/loss expectations and a trading system they trust have the best chance of prevailing over tough market conditions.
Since a large number of professional traders experience more losing than winning trades, learning how to lose is essential to making it as a trader. Furthermore, an effective money management program is absolutely necessary to a trader’s survival and long-term profitability. A key part of any money management program is having an effective trading plan and sticking to it.
The theory behind losing to win is that you will spend a little money learning the ropes and that will be money well spent once you learn the ins and outs of trading. It is quite likely that this will not be the only money that you will lose along the way as you journey into the world of forex trading but it is probably going to be the largest concentration of money that you will lose during the process.
February 18, 2008
How to deal trader’s anxieties
Posted by honeyfx under forex trading | Tags: uncertainty |Leave a Comment
Many people get stressed out in managing their investment portfolios and their trades. In some months, your are doing good and the next month you may be losing money. The good news is that there are ways that a person can reduce their anxiety and stresses.The key is to knowing how to manage the money you do have.
You must learn how to deal with uncertainty. You don’t know, and never will know, everything that will determine if your next trade will be a winner or not. You can’t beat yourself up about it, or go on a hunt to find every single piece of information to make the perfectly informed decision. You have to deal with the present.
Instead of wishing things were different or hoping that things will go the way you want them to, i suggest you’ll just detach yourself from your expectations and disappointments and just trust that whatever is happening is ultimately for the best. That there is always another opportunity for a good trade around the corner.
February 18, 2008
What is really an inflation and how does it affect the economy and people?
Inflation is the rise in the general level of prices of goods and services in a given economy over a period of time. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service.
A variety of inflation measures are in use, designed to measure different sets of prices that affect different people. But the most widely watched measure is the consumer price index (CPI), published monthly by the Bureau of Labor Statistics. It measures nominal consumer prices.
Inflation is not a good thing because it slows down economic growth. High Inflation cause many problems. It could hurt people on their fixed incomes by reducing their purchasing power. If inflation is higher in one country than in its trading partners’, and that country maintains fixed exchange rates, then the country’s exports will become more expensive abroad and it will tend toward a current-account deficit. High inflation also adds additional costs to long-term interest rates. These costs are to offset the risk associated with inflation. The additional costs make borrowing money less attractive. When people don’t buy things (when demand is down), then the supply of goods gets too high, production has to decrease, and unemployment increases, that is the time that recession hits.
