How to earn on Forex
In contrast to exchange transactions with real supply or real currency exchange, FOREX participants use the trade with an insurance deposit - margin or leverage trading. In marginal trading, each transaction has two obligatory stages (which can be divided arbitrarily long period of time): buying (selling) of currency at one price and then selling (buying) it at another (or same) price. The first is called opening the position, the second - the closing position.
When you open a position, a trader furnishes a deposit sum from 0.5 to 4% of the credit line, granted for the transaction. Thus, in order to buy or sell 100,000 dollars for Japanese yens not need the entire amount, but only from 500 to 4000 dollars depending on your risk management policy. After the position closing the deposit sum returns, and calculation of profits or losses, and any gains or losses arising from changes in currency rates is credited on your account.
Let us now consider a concrete example of a profit when the European currency, the euro exchange rate from 0.9162 to 0.9292. If you are using technical or fundamental analysis have anticipated this change, you can buy the Euro cheaper for dollars, and then sell it back at a higher price. Let's say you choose a leverage of 1:100, then added to 1000 dollars 99,000 dollars of the credit line, granted by the dealing center, and you buy the euro price of 0.9162. As a result of this transaction we get: $ 100,000 / 0.9162 = EUR 109.146,47. When the rate changes (an average daily change in euro is approximately 70-100 points), closing the position and sell euros for dollars, but the rate of 0.9292. Receive 109.146,47 * 0.9292 = 101,418.89 dollars. Your profit is $ 1,418.89. If you performed the same transaction with leverage 1:200, then your profit would be $ 2837.78, with leverage 1:50 - 709.45, with leverage 1:25 - 354.72.
Once again we remind you that the higher the leverage, the higher the profits with the correct prediction of currency fluctuations, but the greater will be your loss if your assumptions were incorrect.
Feel confident in the FOREX market without a thorough knowledge of the terms used there.
Foreign exchange quotes are exchange relationships to each other.
USDCHF - the cost of $ 1 in Swiss Francs.USDJPY - the cost of $ 1 in Japanese yens.EURUSD - the cost of 1 euro in U.S. dollars.GBPUSD - the cost of 1 pound sterling in U.S. dollars.Thus quotes are expressed in units of the second currency for a unit of the first. For example, quote USDJPY 108.91 shows that one dollar costs 108,91 Japanese yens. A quote EURUSD 0,9561 suggests that one euro is worth 0.9561 U.S. dollars.
The last figure in the quote is called point. For each currency, the pip value varies and depends on the leverage and current quote.
The formula for calculating 1 pip is:
where K = 1 at leverage 1:100,K = 2 at leverage 1:200,K = 0,5 at leverage 1:50,K = 0,25 at leverage 1:25.
Examples:
USDJPY = 108.91 leverage 1:100100,000 / 10,891 x 1 = 9,18 USD
EURUSD = 0.9561 1:200100,000 / 9561 x 2 = 20,92 USD
GBPUSD and EURUSD - are direct quotes, ie, when the chart is more expensive up GBP and EUR, and when the chart down cheaper. USDCHF and USDJPY - are backward quotes, and when the chart grows, prices on CHF and JPY fall, and when the chart goes down - are growing.
On direct quotes you buy according to ASK, and the sale of BID. In the case of backward quotes - on the contrary.
Trading on the FOREX market is realized in lots. When you open a position, you can choose the number of lots from 1 to 10. One lot equals $ 100,000. The deposit sum for one lot will vary from $ 500 to $ 2,000, depending on the credit leverage you choose. Leverage (leverage) - is a financial mechanism that allows crediting speculative transactions with a small deposit.
In the trade the opportunity to lock in profits or cut losses on yours, predetermined commands LIMIT and STOP.
LIMIT - set up higher than the current value for money.STOP - set up lower than the current value for money.
With these commands the positions is closed without further guidance on the price reaches a specified level.
In the process of trading you can create pending positions, that will be activated when the price reaches the agreed level (open price). When creating and closing orders, a temporary delay of approximately 30 - 40 seconds. In response to the query you are given a real market price corresponding to the time of proposal, not a request.
Concepts which characterize the account:
Transaction (Deal) - realization of 2 trade transactions, and is bought (sold) the currency and then the reverse conversion.Balance - the sum of the customer's account after the last transaction.Floating Profit - current profit on open positions.Floating storage - transfer fee for the open position over midnight GMT.Equity = Balance + Floating + Floating storageMargin requirement - a necessary deposit sum calculated according to the formula:1000 1000 * K + * K + * K 1000where K = coefficient, and the number of items equals the number of open positionsPercentage - index of an account.Percentage = Equity / Margin Requirement. At Percentage lower than 50% can not open new positions.Margin call - the state accounts for which all opened positions dealing center closes at current prices. Percentage state occurs at below 10%.Please note that even in established companies price levels of client orders may differ from the current price points at 5-8. However, there are rare situations when, due to high market volatility, the orders can be executed worse declared.
In contrast to exchange transactions with real supply or real currency exchange, FOREX participants use the trade with an insurance deposit - margin or leverage trading. In marginal trading, each transaction has two obligatory stages (which can be divided arbitrarily long period of time): buying (selling) of currency at one price and then selling (buying) it at another (or same) price. The first is called opening the position, the second - the closing position.
When you open a position, a trader furnishes a deposit sum from 0.5 to 4% of the credit line, granted for the transaction. Thus, in order to buy or sell 100,000 dollars for Japanese yens not need the entire amount, but only from 500 to 4000 dollars depending on your risk management policy. After the position closing the deposit sum returns, and calculation of profits or losses, and any gains or losses arising from changes in currency rates is credited on your account.
Let us now consider a concrete example of a profit when the European currency, the euro exchange rate from 0.9162 to 0.9292. If you are using technical or fundamental analysis have anticipated this change, you can buy the Euro cheaper for dollars, and then sell it back at a higher price. Let's say you choose a leverage of 1:100, then added to 1000 dollars 99,000 dollars of the credit line, granted by the dealing center, and you buy the euro price of 0.9162. As a result of this transaction we get: $ 100,000 / 0.9162 = EUR 109.146,47. When the rate changes (an average daily change in euro is approximately 70-100 points), closing the position and sell euros for dollars, but the rate of 0.9292. Receive 109.146,47 * 0.9292 = 101,418.89 dollars. Your profit is $ 1,418.89. If you performed the same transaction with leverage 1:200, then your profit would be $ 2837.78, with leverage 1:50 - 709.45, with leverage 1:25 - 354.72.
Once again we remind you that the higher the leverage, the higher the profits with the correct prediction of currency fluctuations, but the greater will be your loss if your assumptions were incorrect.
Feel confident in the FOREX market without a thorough knowledge of the terms used there.
Foreign exchange quotes are exchange relationships to each other.
USDCHF - the cost of $ 1 in Swiss Francs.USDJPY - the cost of $ 1 in Japanese yens.EURUSD - the cost of 1 euro in U.S. dollars.GBPUSD - the cost of 1 pound sterling in U.S. dollars.Thus quotes are expressed in units of the second currency for a unit of the first. For example, quote USDJPY 108.91 shows that one dollar costs 108,91 Japanese yens. A quote EURUSD 0,9561 suggests that one euro is worth 0.9561 U.S. dollars.
The last figure in the quote is called point. For each currency, the pip value varies and depends on the leverage and current quote.
The formula for calculating 1 pip is:
where K = 1 at leverage 1:100,K = 2 at leverage 1:200,K = 0,5 at leverage 1:50,K = 0,25 at leverage 1:25.
Examples:
USDJPY = 108.91 leverage 1:100100,000 / 10,891 x 1 = 9,18 USD
EURUSD = 0.9561 1:200100,000 / 9561 x 2 = 20,92 USD
GBPUSD and EURUSD - are direct quotes, ie, when the chart is more expensive up GBP and EUR, and when the chart down cheaper. USDCHF and USDJPY - are backward quotes, and when the chart grows, prices on CHF and JPY fall, and when the chart goes down - are growing.
On direct quotes you buy according to ASK, and the sale of BID. In the case of backward quotes - on the contrary.
Trading on the FOREX market is realized in lots. When you open a position, you can choose the number of lots from 1 to 10. One lot equals $ 100,000. The deposit sum for one lot will vary from $ 500 to $ 2,000, depending on the credit leverage you choose. Leverage (leverage) - is a financial mechanism that allows crediting speculative transactions with a small deposit.
In the trade the opportunity to lock in profits or cut losses on yours, predetermined commands LIMIT and STOP.
LIMIT - set up higher than the current value for money.STOP - set up lower than the current value for money.
With these commands the positions is closed without further guidance on the price reaches a specified level.
In the process of trading you can create pending positions, that will be activated when the price reaches the agreed level (open price). When creating and closing orders, a temporary delay of approximately 30 - 40 seconds. In response to the query you are given a real market price corresponding to the time of proposal, not a request.
Concepts which characterize the account:
Transaction (Deal) - realization of 2 trade transactions, and is bought (sold) the currency and then the reverse conversion.Balance - the sum of the customer's account after the last transaction.Floating Profit - current profit on open positions.Floating storage - transfer fee for the open position over midnight GMT.Equity = Balance + Floating + Floating storageMargin requirement - a necessary deposit sum calculated according to the formula:1000 1000 * K + * K + * K 1000where K = coefficient, and the number of items equals the number of open positionsPercentage - index of an account.Percentage = Equity / Margin Requirement. At Percentage lower than 50% can not open new positions.Margin call - the state accounts for which all opened positions dealing center closes at current prices. Percentage state occurs at below 10%.Please note that even in established companies price levels of client orders may differ from the current price points at 5-8. However, there are rare situations when, due to high market volatility, the orders can be executed worse declared.
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