Slide 1 Title Here

Your Description Here..................................

Slide 2 Title Here

Your Description Here..................................

Slide 3 Title Here

Your Description Here..................................

Slide 4 Title Here

Your Description Here..................................

Slide 5 Title Here

Your Description Here..................................

Pages

Day Trading On a Forex Platform

11:24 AM | , , , , , ,

(example, using the Easy-Forex platform

Step1: Deciding to perform a Forex deal

You have an intention to trade Forex, and you have your own reasoning for doing so - e.g. you feel that the USD will increase compared with the EUR.  The EUR/USD exchange rate is, at the time, around 1.5000 (the common presentation of the Euro-US$ pair is EUR/USD, meaning 1.5000 US dollars for 1 Euro). Your feeling can be based on your experience, or on technical analysis, or fundamental analysis, etc. For whatever reason, you belive that the USD will rise to around 1.4850 (EUR willbe down, which means USD will go up. Or you will need less USD for 1 euro). You want to profit if your forecast is correct, and so choose to make a trade.

Step2: Determining the deal

Below is a screen-shot of a day-Trading deal in the making and an explanation of each step required to put the trade into effect:


Select currencies:  Select the currency to buy and the currency to sell.  This is your  currency pair.  There is no connection between your   base working currency (or   account base currency , the currency in which you handle your Forex account and make deposits and withdravals)  and the currencies in the low in terms of Euro, and it will close the deal, and get more EUR for the USD you previosly 'bought' - hence, you make profit.

Select the Amount to trade:  Since Forex trading is ''non-delivery'' trading (i.e.- no physical currencies are transacted), the Forex deal (contract) has a "volume" , or "size" , meaning the amount of the currencies in this contract. You determine the volume of the contract, but you do not have to purchase the whole amount.  In general, you work in the most common leverage (see below), 1:100: therefore a deal of 10,000 Euro will require much less money to facilitate it.

Select the Amount (Margin) to risk:   This is your investment. This is the amount you risk, meaning the MAXIMUM amount you can lose.  On a 1:100 leverage, EUR 10,000 against USD thus requires only USD 100 (in fact, the actual leverage you are offered in this case is 1:150, since you "buy" EUR 10,000 with USD 15,000, according to the example rate of 1.5000, guaranteed using only USD 100 of your own money).

Stop-Loss rate:   This is a currency exchange rate at which your deal would automatically close in the event the market ran counter to your forecast.  In this event, you would lose your USD 100 investment.  You can define another Stop-Lose rate, however, the "Margin to risk" will change accordingly. There is a direct relationship between the Stop-Loss rate and the "Margin" (i.e the amount risked) required for the deal.

Freeze Rate:  This feature is unique to the Easy-Forex Trading Platform.  You see the rate for the deal and are almost ready to accept it, but before you do, you need another couple of seconds to think. With the freeze rate feature you are allowed a small window of time to either decline or accept the deal.

Accept:  When you are ready, click "Accept" and your deal is activated. You have enough money in your Forex account to make the deal, so it's in play. You are holding now an "Open Position" in Forex.

Set SMS Alert:  If you have signed up to the SMS Alert service you can set an alert for this deal.  You will be notified via text to your mobile phone when this deal closes (either because it reached it's  Stop-Loss or Take-Profit rate).

Please note, "Renewal until...":   The Day-Trading deal resembles a "spot" transaction (but is not identical).  The rates in the deal are the updated current rates ("spot"), and the deal may be closed anytime during the trading day. However, the trader can extend the deal to the following day (paying a small renewal fee).  Most platforms offer an automatic renewa of the deal, for a few days period.  The trader may close the position at any time.  If the trader closes the deal before the indicated closing time (usually it is 22:00 GMT), no renewal fee will be charged for that day.

 Step3: Checking account status

Below is a screen-shot of a typical "My Position" report:


With online platforms ,traders have 24x7 access in order to monitor open positions, to close positions, or change parameters (definitions) in the deal.
You can check your positions for Day Trades, Limit Orders and Forwards (if this is offered in your region).  You can also check the status of the SMS Alerts you have set.

To view the details of a specific deal, click on the + (plus) sign.

Visual Trading is unique to Easy-Forex and it allows you to easily view the significant details of your deal, in real time, as shown in the sliding graph on the right.

ID:  The reference number of the deal, as recorded in the platform.

Buy:   The volume of the currency "bought".

Sell:  The volume of the currency "sold".

Open Rate:  The exchange rate of the currency pair at the time the deal was oppened by the trader.

Current Rate:  The exchange rate of this currency pair at the time the trader is viewing the screen.

Stop-Lose rate:  The rate defined for automatic "stop-loss" of the deal.  The deal will close if this rate accurs in the market during the time the deal is active.

Take-Profit rate:   (Not defined in this example).  This is the rate at which the deal will close automatically assuming the market moves in the direction forecast by the trader.  When defined, this rate allows a trader to take profit automatically when a set rate is achieved, thus allowing the trader to focus on other tasks rather than watching the market closely.

Profit/Loss:   The current status of the trader's position.  This will be the profit (or the loss) from this deal, if it was closed at this very second.

Open date:  The day the deal was oppened by the trader.

Rolling until:  The last day to which the deal will be automatically renewed.

Amount (Margin) to risk:  The amount invested by the trader for the deal. This is the maximum amount the trader can lose.

Step4: Modifying your deal

This is where you can change Stop-Loss and Take Profit rates.  You can also test out profit and loss scenarios with the Trade Controller.


Change Stop-Loss:  The trader is allowed to change their Stop-Loss, at any time while the deal is still active.  As previously mentioned, doing so would affect the amount of margin needed for the deal.  If the trader changes the Stop-Loss downward (in a case where the position is losing, and is now near the automatic closing), then additional funds will be required for margin.  If the trader changes the Stop-Loss upward (in a case where the deal will already see a profit, and the trader wishes to define a higher Stop-Loss to decrease the original risk), then the difference will be credited.

Change Take-Profit:  Similarly, the trader is allowed to define, or change, a Take-Profit rate. Note that unlike a Stop-Loss rate, the trader does not have to define any Take-Profit rate; it simply allows the trader to focus on tasks other than rate-watching.

Trade Controller:  The trader can key in various hypothetical exchange rates to see their impacton their overall position (amount of profit or loss), if and when such rates accur in the market.  You can do this manually on the trading ticket or to make it even easier use the Trade Controller.

Inside Viewer:  This is a snapshot of all open Day Trades by traders on the Easy-Forex platform.  You can view the Popularity of a specific currency pair.  The Direction or percentage of buy or sell of a pair.  And the Structure of open deals, the average Stop-Loss and Take-Profit rates set by other traders.
Read More

Fundamental Analysis

12:40 PM | , , , , ,

   Fundamental analysis is a method of forecasting future price movements of a financial instrument based on economic, political, environmental and other relevant factors, as well as data that will affect the basic supply and demand of whatever underlies the financial instrument.   In practice, many market players use technical analysis in conjunction with fundamental analysis to determine their trading strategy.   One major advantage of technical analysis is that experienced analysis can follow many markets and market instruments, whereas the fundamental analysis focuses on what ought to happen in a market.   Among the factors considered are; supply and demand; seasonal cycles; weather; govemment policy.

fundamental analysis for dummies, forex fundamental analysis, financial statement analysis, fundamental analysis tools, financial analysis report, financial ratio analysis

The fundamental analyst studies the causes of market movements, while the technical analyst studies the effect. Fundamental analysis is a macro, or strategic, assessment of where a currency should be traded, based on any criteria but the movement of the currency's price itself. These criteria often include the economic conditions of the country that the currency represents, monetary policy, and other ''fundamental'' elements.
Many profitable trades are made moments prior to, or shortly after, major economic announcements.

Leading economic indicators

The following is a list of economic indicators used in the USA. Obviosly, there are many more, as well as those of other leading economies (such as Germanyi the UK, Japan, etc.). In general,it is not only the numerical value of an indicator that is important, but also the market's anticipation and prediction of the forecast, and the impact of the relation between anticipated and actual figures on the market.

Such macro indicators are followed by the vast majority of traders worlwide. The quality of the published data can differ over time. The value of the indicator data is considered greater if it presents new information, or is instrumental to drawing conclusions which could not be drawn under other reports or data. Furthermore, an indicator is highly valuable if one may use it to better forecast future trends.
Note that in the USA most indicators are published on certain weekdays, rather than on a particular monthly date (e.g. the second Wednesday in each month,  as opposed to the 14th of each month, etc.).
Each indicator is marked as High (H), Medium (M), or Low (L), according to the importance commonly attributed to it.

CCI - Consumer Confidence Index

The Conference Board; last Tuesday of each month, 10:00am EST, covers current month's data
The CCI is a survey based on a sample of 5,000 U.S. household is considered one of the most accurate indicators of the effectiveness of govemment policy. The CPI is a basket of consumer goods (and services) tracked from month to month (excluding taxes). The CPI is one of the most followed economic indicators and considered to be a very big market mover. A rising CPI indicates inflation. The Core-CPI (CPI, excluding food and energy, expense items which are subject to seasonal fluctuations) gives a more stringent measure of general prices.

Employment Report

Department of Labor; the first Friday of each month, 8:30am EST, covers previous month data
The collection of the data is gathered through a survey among 375,000 business and 60,000 households. The report reviews: the number of new work places created or cancelled in the economy, average wages per hour and the average lenght of the work week. The report is considered as one of the most important economic publications, both for the fact that it discloses new up-to-date information and due to the fact that, together with NFP, it gives a good picture of the total state of the economy. The report also breaks out data by sector (e.g. manufacturing, services, building, mining, public, etc.)

Employment Situation Report

Bureau of Labor and Statistics; the first Friday of each month, 8:30am EST, covers previous month data
The Employment Situation Report is a monthly indicator which contains two major parts. One parts is the unemployment rate and the charge in the unemployment rate. The second part of the report indicates things like average weekly hours worked and average hourly earnings.   This data is important for determining the tightness of the labor market, which is a major determinant of inflation. The Bureau of Labor surveys over 250regions across the United States and covers almost every major industry. This indicator is certainly one of the most watched indicators and almost always moves markets. Investors value the fact that information in the Employment report is very timely as it is less than a week old. The report provides one of the best snapshots of the health of the economy.

GDP - Gross Domestic Product

BEA (Bureau of Economic Analysis); last day of the quarter, 8:30am EST, covers previous quarter data.
GDP is a gross measure of market activity. It represents the monetary value of all the goods and services produced by an economy over a specified period. This includes consumption, govemment purchases, investment, and the trade balance. The GDP is perhaps the greatest indicators of the economic helath of a country. It is usually measured on a yearly basis, but quarterly stats are also released.
The Commerse Department release an advance report on the last day of each quarter. Within a month it follows up with the preliminary report and then the final report is released yet a month later. GDP indicates the pace at which a country's economy is growing (or shring).

NFP-Changes in non-farm payrolls

Department of Labor; the first friday of each month, 8:30am EST, covers previous month data
The data intended to represent changes in the total number of paid U.S. workers of any business, excluding the following:
-general govemment employees;
-private household employees;
-employees of nonprofit organizations that provide assistance to individuals;
-farm employess.

The total non- farm payroll accounts for approximately 80% of the workers responsible for the entire gross domestic product of the United States.   The report is used to assist govemment policy-makers and economists in determining the current state of the economy and predicting future levels of economic activity. It is a very big market mover, due largely to high fluctuations in the forecasting.
Read More