All About Forex: Knowledge, Discussions, Idea, Reviews, Tips

[LarryForex]

In this thread, I will post:
- Forex knowledge
- Forex discussions
- My personal trading idea
- My personal reviews and tips on forex products, services
- Entertainment materials (just to ease trading tensions)

Hope to receive active responses from all of you
Best regards!

[Mike]

Welcome to Forex Forums, looking forward to our discussions.

[LarryForex]

Thank you Mike for approving my thread

[LarryForex]

Source: http://www.forexadvantage.info/forex...ogy-explained/

Explanations of popular forex terminology are given as follows.
Equity*– the secure part of the client account, considering the open positions, bound with the balance and floating rate (profit/loss) by the following formula: Balance + Floating rate + Swap, i.e. the funds on the client account less the current amount for the open positions, plus the current earnings for the open positions.
Free margin*– the funds, which are not used for the security of the opened positions. It is calculated by the formula: Free Margin = Equity – Margin.
Margin*– The required equity that an investor must deposit to collateralize a position equal to 1% (when leverage = 1:100) of an open position deposit.
Margin level*– determines the condition of an account. Calculated according to the formula: (Equity / Margin) * 100%.
Base currency*– currency unit in which an account, balances, commission fees and payments are designated and calculated.
Balance*– the total financial result of all fully executed transactions and deposits/withdrawals to/from an account.
Broker*– the firm that provides crediting services and trader support.
Bulls*– traders that count on currency rate escalation.
Bull market*– market that tends toward escalating rates.
Currency pair*– The two currencies that make up a foreign exchange rate. For Example, EUR/USD.
Rising trend*– every time the highest value of a curve appears, compared to previous rate values. The lowest curve points are connected by a straight line – trend line.

Currencies exchange logo (Photo credit: Wikipedia)


Intraday trade*– trade oriented at gaining profit within one day.
Dealing*– non-cash currency trading.
Dealing centre*– company that provides access to the money market.
Account history*– list of complete transactions and non-trading operations for a trading account.
Client*– physical or legal party executing operations with the company.
Client terminal*– MetaTrader 4.xx software product lets the client get information about financial market trades in real time terms (quantity defined by the company), perform technical analysis of markets, operate, set/change/cancel orders and receive messages from the dealer and the company as well.
Trend lines*– These are straight lines, with a positive slope, drawn on a graph through low points when tendencies are rising, and with a negative slope, drawn through the high points when tendencies are on the decline. These lines define the current trends. Trend line gaps usually signal tendency changes.
Client log file*– file, created by the client terminal, which records all requests and orders sent from the client to a dealer with 1 second accuracy.
Server log file*– file, created by the server, which records all requests and orders received from the client to a dealer, as well as the processing result, with 1 second accuracy.
Margin trading*– using borrowed money to buy securities, with the expectation of increasing profits. Margin trading can bring big returns, but is also risky.
Market-makers*– major banks and financial firms that pledge to provide liquidity by accepting the other side of a trade in a currency, security or futures contract.

Initial margin*- The initial deposit of collateral required to enter into a position as a guarantee on future performance.
Non-trading operation*– depositing or withdrawing funds from a trading account, or extending credit.
.
Normal market conditions*– condition of a market that meets the following requirements:

• absence of noticeable breaks in relation to the trading platform quotes;
• absence of rushing price dynamics;
• absence of essential price gaps.

Trade operation volume*– number of lots multiplied by lot size.
Open position*– the first part of a complete transaction result; at the opening position, the client accepts the following obligations:

• to close reverse trading of equal amount;
• to maintain equity no lower than 10% of the necessary margin.

Market opening*– trade re-opening after a weekend, holidays or after a rest interval during trading sessions.
Pending order*– the client instructs the dealer to buy or sell once the price reaches the order level.
Complete closed transaction*– consists of two opposite and equal trading operations (opening and closing positions): buying followed by selling or selling followed by buying.
Quote tread*– a block of numerical data that describes the meaning of the price at a specific time period.
Pips (points)*– The smallest unit of price for any foreign currency, also referred to as points.
Lot Size*– number of assets, products, or base currency defined in the contract per one lot.
Developer*– “MetaQuotes Software Corp.” is the trading platform developer.
Accounting currency*– currency unit in which deposit/withdrawal operations are performed.
Range*– the distance between levels of support and levels of resistance.
Swap*– money resources reduced or added to a client’s account for passing a position overnight.
Adviser*– kind of trading account management algorithm in form of a program based on MetaQuotes Language 4. This program sends requests and orders to a server using the client terminal.
Spike*– see “Non-market quoting”.
Contract specifications*– main trading terms (such as spread, lot size, minimal trading operation quantity, change in trading operation volume move, initial margin, lock margin etc.) for each instrument.
Spread*– The difference in pips between the Bid and the Ask quote.
Account*– a special personal account opened with the company by a client. This account is used to offset the obligations of the client and dealer, resulting from the deals concluded under the present agreement.
Ticker*– unique identification number given to every opening position or pending order within the trading platform.
Trading operation*– When a client buys or sells any instrument.
Trading platform*– the set of software and technical resources that support financial market trading information to be received in real time; processes trading operations, takes into account mutual obligations between the client and the dealer, and observes conditions and restrictions as well. For the purposes of the present regulation, it consists of the “Server” and “Client” terminals.
Trading Account*– unique personalized stock-taking operations register on the trading platform, where complete closed transactions, opened positions, non-market operations and orders are reflected.
Transaction*– trade operations where money resources move from base currency into quoting currency and vice versa.
Trader*– person, who trades currency on the Forex market in order to earn profit.
Trend*– current general direction of price movement.
Order level*– price given in order.
Support level*– lowest channel’s borderline.
Resistance level*– highest channel’s borderline.
Figure*– price change for 100 pips. For example, price change EUR/USD from 1.3770 to 1.3870 – this means figure increase.
Force major circumstances*– occurrences which could not be foreseen or prevented. These include: natural disasters; wars; acts of terrorism; government actions, actions of executive and legislative government authority, hacker attacks, and other unlawful acts toward servers.
Hedging*– operation that protects an asset or liability against a fluctuation in the foreign exchange rate.
Price prior to non-market quoting*– closing price of minute bar, prior to minute bar with non-market quoting. Price Gap – either of the following situations:

• Present quoting Bid is greater than prior quoting Ask;
• Present quoting Ask is less than prior quoting Bid.

Market opening price gap*– either of the following situations:

• Market opening quote Bid is greater than market closing quote Ask;
• Market opening quote Ask is less than market closing quoteBid.

Obvious mistake*– opening/closing client positions or executing client order at a price that greatly differs from price quoted per instrument in present flow quoting at the moment of processing. Or some other dealer activity or inactivity that deals with mistaken determination of market prices at the present moment.

[LarryForex]

Forex Terminology Explained

Explanations of popular forex terminology are given as follows.


Equity – the secure part of the client account, considering the open positions, bound with the balance and floating rate (profit/loss) by the following formula: Balance + Floating rate + Swap, i.e. the funds on the client account less the current amount for the open positions, plus the current earnings for the open positions.
Free margin – the funds, which are not used for the security of the opened positions. It is calculated by the formula: Free Margin = Equity – Margin.
Margin – The required equity that an investor must deposit to collateralize a position equal to 1% (when leverage = 1:100) of an open position deposit.
Margin level – determines the condition of an account. Calculated according to the formula: (Equity / Margin) * 100%.
Base currency – currency unit in which an account, balances, commission fees and payments are designated and calculated.
Balance – the total financial result of all fully executed transactions and deposits/withdrawals to/from an account.
Broker – the firm that provides crediting services and trader support.
Bulls – traders that count on currency rate escalation.
Bull market – market that tends toward escalating rates.
Currency pair – The two currencies that make up a foreign exchange rate. For Example, EUR/USD.
Rising trend – every time the highest value of a curve appears, compared to previous rate values. The lowest curve points are connected by a straight line – trend line.
Intraday trade – trade oriented at gaining profit within one day.
Dealing – non-cash currency trading.
Dealing centre – company that provides access to the money market.
Account history – list of complete transactions and non-trading operations for a trading account.
Client – physical or legal party executing operations with the company.
Client terminal – MetaTrader 4.xx software product lets the client get information about financial market trades in real time terms (quantity defined by the company), perform technical analysis of markets, operate, set/change/cancel orders and receive messages from the dealer and the company as well.
Trend lines – These are straight lines, with a positive slope, drawn on a graph through low points when tendencies are rising, and with a negative slope, drawn through the high points when tendencies are on the decline. These lines define the current trends. Trend line gaps usually signal tendency changes.
Client log file – file, created by the client terminal, which records all requests and orders sent from the client to a dealer with 1 second accuracy.
Server log file – file, created by the server, which records all requests and orders received from the client to a dealer, as well as the processing result, with 1 second accuracy.
Margin trading – using borrowed money to buy securities, with the expectation of increasing profits. Margin trading can bring big returns, but is also risky.
Market-makers – major banks and financial firms that pledge to provide liquidity by accepting the other side of a trade in a currency, security or futures contract.

Initial margin - The initial deposit of collateral required to enter into a position as a guarantee on future performance.
Non-trading operation – depositing or withdrawing funds from a trading account, or extending credit.
.
Normal market conditions – condition of a market that meets the following requirements:

• absence of noticeable breaks in relation to the trading platform quotes;
• absence of rushing price dynamics;
• absence of essential price gaps.

Trade operation volume – number of lots multiplied by lot size.
Open position – the first part of a complete transaction result; at the opening position, the client accepts the following obligations:

• to close reverse trading of equal amount;
• to maintain equity no lower than 10% of the necessary margin.

Market opening – trade re-opening after a weekend, holidays or after a rest interval during trading sessions.
Pending order – the client instructs the dealer to buy or sell once the price reaches the order level.
Complete closed transaction – consists of two opposite and equal trading operations (opening and closing positions): buying followed by selling or selling followed by buying.
Quote tread – a block of numerical data that describes the meaning of the price at a specific time period.
Pips (points) – The smallest unit of price for any foreign currency, also referred to as points.
Lot Size – number of assets, products, or base currency defined in the contract per one lot.
Developer – “MetaQuotes Software Corp.” is the trading platform developer.
Accounting currency – currency unit in which deposit/withdrawal operations are performed.
Range – the distance between levels of support and levels of resistance.
Swap – money resources reduced or added to a client’s account for passing a position overnight.
Adviser – kind of trading account management algorithm in form of a program based on MetaQuotes Language 4. This program sends requests and orders to a server using the client terminal.
Spike – see “Non-market quoting”.
Contract specifications – main trading terms (such as spread, lot size, minimal trading operation quantity, change in trading operation volume move, initial margin, lock margin etc.) for each instrument.
Spread – The difference in pips between the Bid and the Ask quote.
Account – a special personal account opened with the company by a client. This account is used to offset the obligations of the client and dealer, resulting from the deals concluded under the present agreement.
Ticker – unique identification number given to every opening position or pending order within the trading platform.
Trading operation – When a client buys or sells any instrument.
Trading platform – the set of software and technical resources that support financial market trading information to be received in real time; processes trading operations, takes into account mutual obligations between the client and the dealer, and observes conditions and restrictions as well. For the purposes of the present regulation, it consists of the “Server” and “Client” terminals.
Trading Account – unique personalized stock-taking operations register on the trading platform, where complete closed transactions, opened positions, non-market operations and orders are reflected.
Transaction – trade operations where money resources move from base currency into quoting currency and vice versa.
Trader – person, who trades currency on the Forex market in order to earn profit.
Trend – current general direction of price movement.
Order level – price given in order.
Support level – lowest channel’s borderline.
Resistance level – highest channel’s borderline.
Figure – price change for 100 pips. For example, price change EUR/USD from 1.3770 to 1.3870 – this means figure increase.
Force major circumstances – occurrences which could not be foreseen or prevented. These include: natural disasters; wars; acts of terrorism; government actions, actions of executive and legislative government authority, hacker attacks, and other unlawful acts toward servers.
Hedging – operation that protects an asset or liability against a fluctuation in the foreign exchange rate.
Price prior to non-market quoting – closing price of minute bar, prior to minute bar with non-market quoting. Price Gap – either of the following situations:

• Present quoting Bid is greater than prior quoting Ask;
• Present quoting Ask is less than prior quoting Bid.

Market opening price gap – either of the following situations:

• Market opening quote Bid is greater than market closing quote Ask;
• Market opening quote Ask is less than market closing quoteBid.

Obvious mistake – opening/closing client positions or executing client order at a price that greatly differs from price quoted per instrument in present flow quoting at the moment of processing. Or some other dealer activity or inactivity that deals with mistaken determination of market prices at the present moment.

[dwi_siswati]

So, what is the clue guys??

[LarryForex]

So, what is the clue guys??

I will gradually add forex articles, and soon I will post my trading idea.

Thank you for viewing my topic.

[LarryForex]

What Is Forex?

The very first lesson into forex trading is to understand forex what is it. OK, here is the full answer for you.

Forex market is an international money market. Forex formed its name from foreign currency exchange operation: FOReign EXchange, or FOREX for short.Forex is one of the youngest financial markets and has had its present appearance since the 1970s. Due to the sheer volume of the money market, Forex is the most dynamically developing market.
Forex’s daily trading rotations reach 5+ trillion USD (July 2013 data), that is approximately 30 times more than the general volume of all stock market exchange in the US. Like any other market, Forex trades certain goods. In the case of the money market, these goods consist of national foreign currency. Fundamentally, currency rates are set by government institutions as well as commerce companies all around the world that need to convert currency for trading in foreign countries. They make up 5% of the general currency market rotation volume. The other 95% comes from speculative trading on the part of traders trying to earn profit from buying and selling currency at fluctuation rates. An important money market feature is its steadiness.


USD/CAD forex chart (Photo credit: Wikipedia)


The main financial market danger comes from sudden drops, or when the stock index collapses. However unlike the stock market, Forex doesn’t drop. When stocks depreciate, that means a crash is coming. But should the dollar fall, this simply means that some other currency will become stronger.
Let’s take a look at the yen for example. Within a few months at the end of 1998 the price of the yen increased by 25% in relation to the US dollar. On particular days, the USD decrease was measured with a tenth of a percent. However a drop in the USD, as with any other currency, could not cause the money market to crash, and trading would carry on as before. This is the key to the market’s steadiness, which works for businesses as well. Currency is the most liquid and secure trading tool.
Speculators have a great interest in so called liquid or base currencies. Nowadays over 85% of all deals are in base currencies, often the following currencies: US dollar (USD), Japanese yen (JPY), euro (EUR), British pound (GBP), Swiss franc (CHF), Canadian dollar (CAD) and the Australian dollar (AUD).
Important to getting to know currency trading is understanding the exchange rate notation system. This is relatively simple if you remember that all currency pairs are noted in the same way. Two currency symbols are present on either side of the slash “/”. The correlation of their cost to each other expresses the rate of the given currency pair: EUR/USD (euro to US dollar rate), GBP/USD (British Pound to US dollar rate), USD/JPY (US dollar to Japanese yen rate) and so on. However, when defining currency pair symbols, the slash (“/”) symbol is usually absent and the currency pair notation is written: EURUSD, GBPUSD, USDJPY.

The concept of money market operations is pretty clear: you earn profit from the movement of one type of currency rate in relation to the movement of another currency rate. The entire currency market consists of currency pair rates, where each one reflects the relational cost of one national currency compared to another. For example, when people say that for 1 euro it is possible to get 34 cents, this means that the currency pair EUR/USD rate equals 1.3400.

[LarryForex]

Bruce Kovner Talking About Technical Analysis

Bruce Kovner is a legendary billionaire trader who made a fortune of approximately $4.5 billions from trading financial markets. His trading decisions were based on a reasonable combination of fundamental analysis and technical analysis. The following quote (derived from the best-selling book “Market Wizards“) is his original thoughts on technical analysis, which partly explains his extreme success in trading. Let’s see Bruce Kovner technical analysis.

Technical analysis, I think, has a great deal that is right and a great deal that is mumbo jumbo…
There is a great deal of hype attached to technical analysis by some technicians who claim that it predicts the future. Technical analysis tracks the past; it does not predict the future. You have to use your own intelligence to draw conclusions about what the past activity of some traders may say about the future activity of other traders.

For me, technical analysis is like a thermometer. Fundamentalists who say they are not going to pay any attention to the charts are like a doctor who says he’s not going to take a patient’s temperature. But, of course, that would be sheer folly. If you are a responsible participant in the market, you always want to know where the market is — whether it is hot and excitable, or cold and stagnant. You want to know everything you can about the market to give you an edge.

Technical analysis reflects the vote of the entire marketplace and, therefore, does pick up unusual behaviors. By definition, anything that creates a new chart pattern is something unusual. It is very important for me to study the details of price action to see if I can observe something about how everybody is voting. Studying the charts is absolutely crucial and alerts me to existing disequilibria and potential changes.

Fascinated by Bruce Kovner technical analysis? Want to read more about his trading philosophy? The following article has been prepared for you: Bruce Kovner Trading Style.

[LarryForex]

Relationship Between Canadian Dollar and Crude Oil

Historically speaking, crude oil and the Canadian dollar have had a very strong relationship. Most of the time, CAD crude oil have a high degree of correlation.

This can be explained by the fact that Canada holds the second biggest oil reserves in the world, just after Saudi Arabia. Moreover, a large amount of these oil reserves are pumped into the United States, making Canada the biggest energy source for the U.S. economy. Thus, investors focus on crude oil prices to gauge the direction of CAD.


CAD Crude Oil Chart
The first chart shows how CAD crude oil have behaved over a period of 15 months from 03.01.2008 to 07.14.2009, while the second chart shows the weekly correlation between the two. The green area denotes the periods when the implied correlation was between -0.5 and -1.0, which are the phases when crude oil can be used to forecast CAD’s movements.

[LarryForex]

EUR/GBP Analysis: An Imminent Downtrend?

Let’s look at the big picture of EUR/GBP – monthly chart. You will easily find that the pair has been struggling at a sensitive zone for 6 months, yes I mean half a year. Why does it take EUR/GBP so much time at this zone? Because this is the upper edge of a multiple-year downward trend, with huge resistance accompanied. The market rule is very simple: if a pair cannot manage to go up, it will have to drop. Therefore, I see an imminent lasting downtrend for EUR/GBP, which will be solidly confirmed if the candle of this month closes as a doji.

Let’s zoom in the daily chart. EUR/GBP has reacted very fiercely after touching the 76.4 Fibonacci level as shown the figure below. The pair has fallen for 4 consecutive days. Because of this sharp drop, we have evidence to think that the previous upward move of the pair is just a temporary retracement; and after the retracement is an actual downtrend.

[LarryForex]

Imagined Versions of a Trader

Thank innerfx for making this funny picture =))

[LarryForex]

The Best Computer for Traders

Maybe you need to buy one for better trading experience.

[LarryForex]

NZD/USD Is Likely to Start an Uptrend

What do you think when looking at the weekly chart of NZD/USD? The pair has bounced up from the trend line of a multiple-month uptrend. So, there is a great possibility that this bounce is the start of an upward marathon. Remember, NZD as a commodity currency has a very typical characteristic of commodity family: once it actually rallies, it will keep climbing non-stop for a very long period (no one want to sell the currency due to its sweet interests).

Let’s zoom in to the daily chart. With naked eyes solely, we can still observe that NZD/USD just wants to go up. However, please notice that NZD/USD is approaching a considerable resistance at 0.81, where the upward momentum of the pair may pause temporarily for several days.

[LarryForex]

A Sexy Girl-Trend

A joke, but not a joke. Don’t be tempted by opportunities that look apparently sexy.

[LarryForex]

What's Next for NZDUSD?

As I said in the previous forecast of NZDUSD, the pair faced a firm barrier at 0.8100 and lost its upward momentum for several days. NZDUSD has then climbed again after bottoming at 0.7740, and it is aiming to test the 0.8100 resistance the second time.


So, what’s next for NZDUSD? To predict the future of NZDUSD, we have to look at the general tone of the forex market where EURUSD always plays a key role. I think EURUSD is not ripe enough for a sharp drop right in this week. The momentum of EURUSD still remains upward, and there will still be some room for EURUSD to push up a little bit. In a situation that NZD, AUD, CAD, GBP… have fallen so much against USD, any slight rise of EURUSD will provide a ground for these currencies to rally, perhaps very hard.

In conclusion, my forecast is that EURUSD will go up slightly, or at least move sideways this week. This brings a good condition for NZDUSD to break through the 0.8100 barrier.