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Currency Trading World Business News Headlines:
Forex Trading News from the USA and around the World Charlie Hebdo to Continue Publishing French magazine Charlie Hebdo will continue publishing,
despite the brutal attack on its offices that robbed the magazine of its publisher and most of its veteran cartoonists. Nestlé to Sell Part of Frozen Food Operation Nestlé is to sell a piece of its Spanish frozen food
operation, part of the Swiss food giant’s move to hive off fringe businesses. Papers Show Support for Charlie Hebdo Newspapers across Europe showed solidarity with the victims
at French satirical magazine Charlie Hebdo, reprinting an array of cartoons and slogans across their mastheads expressing outrage at the killings. Stocks bounce as risk appetite returns Steadier oil price and hopes for ECB stimulus lift
spirits Officials: Charlie Hebdo Suspect Left ID in Getaway Investigators chasing the two brothers who allegedly attacked
satirical weekly Charlie Hebdo, killing 12, found an improbable clue in their abandoned getaway car: a national identity card, according to French officials. ECB Stimulus Hopes Lift Stocks European stock markets surged, propelled by the prospects of
further central bank stimulus which pushed the euro to a nine-year low. Santander to Raise $8.88 Billion in Capital Spanish lender Banco Santander said it would raise up to
$8.88 billion in a capital, a bid to address concerns among investors and analysts that its financial cushion was weaker than those of its peers. Polish Government to Shut Coal Mines The Polish government said it would close four coal mines in
an effort to stave off bankruptcy at Europe’s largest coal producer, a plan that was met with labor-union protests. Fed Warns on Global Growth Fears Federal Reserve officials, worried about weak growth
overseas, are endorsing new measures by foreign officials—most notably at the European Central Bank—to stimulate their economies. Deezer buys Muve Music to tap US market Paris-based streaming service hopes deal will fuel
expansion Credit Suisse Milan Offices Searched Credit Suisse Group confirmed that its offices in Milan were
raided last month by Italian police, a new wrinkle in the Swiss bank’s dealings with foreign authorities cracking down on offshore tax evasion. Tesco to close 43 stores across UK The beleaguered supermarket Tesco has said it will close 43
unprofitable stores, and look to make cuts of £250m, despite enjoying better Christmas sales. French police make Hebdo murder arrests Tension rises after officer dies in separate Paris
shooting IMF mission resumes work in Ukraine
An IMF mission has
arrived in Ukraine to resume talks on providing financial assistance to the country, which is on the brink of default. The IMF estimates Kiev needs an extra $15 billion of aid to overcome the crisis. Read Full Article at RT.com Santander to raise $9bn via share sale Spanish bank aims to use funds to strengthen capital ratio to
allow it to pay cash dividend Juncker proposes third Ukraine bailout European Commission urges another €1.8bn in aid for the
cash-strapped country Economic Report: Jobless claims stay below 300,000 in sign of The number of people who applied for U.S. unemployment
benefits at the end of the year fell slightly and remained below the key 300,000 mark for the 16th time in 17 weeks, offering more proof the labor market is still on an upswing. Initial jobless claims declined by 4,000 to 294,000 in the seven days stretching from Dec. 27 to Jan. 3. ‘Strong case’ for abandoning CPI An official review of inflation measures says there is a
strong case for switching the way it is measured. Samsung Earnings Hint at Recovery Samsung Electronics Co.’s latest earnings preview suggests
the profit declines that have dogged the world’s largest maker of smartphones may be bottoming out. Euro near 1999 level in losing streak Common currency suffers 10 daily declines in a row
Oil Matters Less than Wall Street Thinks $50 oil is certainly
bad for producers and their supply base. It is at the same time good for transportation businesses and energy intensive manufacturers. Consumers will probably spend a bit more too. The net effect on our economy in the short term is […]
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What is Forex Currency Trading Leverage and PIPs?
PIP Price Movement
A pip unit is the measurement of a currency pair price movement. A pip is stated in the amount of $0.0001 for U.S.-dollar related currency pairs. A 100 pip move is equal to a one cent move when traded with U. S. Dollar pairs.
Forex Leverage
Leverage is the amount of money you are able to invest as a result of borrowing investment capital from your Forex currency broker. Basically, the more leverage you use, the more capital you have at risk in your position. Most Forex currency brokers in the United States offer 50 to 1 leverage. A $10,000 account enables you to trade $500,000 of currency.
Lot Trading Sizes
A standard Forex currency account has specific trading size lots. A lot is the minimum quantity of a currency pair that may be traded. Typically, one regular trading unit lot is worth $100,000, a mini trading unit lot is worth $10,000 and these are the most common lot sizes. Other “lot” sizes are available depending on which Forex currency trading broker you trade with.
A Forex Currency Trade Explanation
For example; standard lot size is $100,000, pip value is $10 (1 lot or $100,000 x 0.0001 or 1 PIP = $10.00). If your account contains $10,000 and you have a leverage of 50:1, then you will have $500,000 of available potential trading funds ($10,000 x 50 = $500,000) which equals 5 lots (5 lots x $100,000 = $500,000) that you can use for investing in the Forex currency market. It would be extremely risky to use the entire $500,000 that you have available for trading because each single PIP movement would be worth $50 when trading 5 lots which are worth $500,000. You could wipe out half your account just by losing 100 pips, a one cent move, (100 pips or .0100 x $500,000 or five lots = $5,000). Although there is large downside risk to having high leverage, there is also a large upside for potential gain – if you were to make 100 pips (one cent), your original account value of $10,000 would increase to $15,000, and you would rake in a 50% return in one hour, one day, one month or whatever the time frame the gain transpired over!”
New Maximum Leverage Rules/Laws
As received from Forex.com: “Effective Monday, October 18, 2010 a new CFTC regulation will go into effect that limits the maximum leverage in the retail Forex markets to 50:1. The new margin requirement is 2% (50:1 leverage) for the major currencies and 5% for all other currencies (20:1 leverage). Metals will be offered at 100:1”.
When Trading Forex Currency Go With The Trend
Trade with the Forex FX Currency trend to maximize your chances to succeed. Trading against the trend won’t kill a trader, but will definitely require more attention and your chance of losses will increase. In the end the trend will almost always be your friend.
Using a highly leveraged Forex currency account can come at a cost
Using a highly leveraged Forex FX trading account comes at a cost. It will, of course, give a trader more financial gear to trade into more profits quickly, but for inexperienced traders high leverage, and, in fact, any Forex leverage can be disastrous. When a trader signs up for a high leverage without knowing how to accurately use it to his own advantage, he simply signs up for additional risks that multiply.
What is International Forex Currency Market?
The Forex FX currency market is the largest market in the world.
The market in which participants from around the world are able to buy, sell, exchange and speculate on different currencies. International currency markets are made up of banks, commercial companies, central banks, investment management firms, hedge funds, retail forex brokers and investors.
The international Forex currency markets are large and liquid, therefore it is thought that they are extremely efficient. International Forex currency transactions do not occur on a single exchange, but in a global computer network of large banks and brokers from around the world.
The Forex FX currency market focuses on the trade of currencies by both large investment banks and individuals around the world. All trading is done over-the-counter, which adds to the market’s liquidity, allowing trades to be made 24 hours a day. Trading can be done in nearly all currencies, however, a small group known as the ‘majors’ is used in most trades. These currencies are the U.S. dollar, the euro, the British pound, the Japanese yen, the Swiss franc, the Canadian dollar and the Australian dollar. All currencies are quoted in currency pairs.
When a trade is made in the forex fx currency market, it has two sides – someone is buying one currency in the pair, while another individual is selling the other. Although the positions traded in forex are often in excess of 100,000 currency units, only a fraction of the total position comes from the investor. The remainder is provided by a broker, which offers the leverage needed to make the trade.
Traders look to make a profit by betting that a currency’s value will either appreciate or depreciate against another currency. For example, assume that you purchase US$100,000 by selling 80,000 euros. In this case, you are betting that the value of the dollar will increase against the euro. If your bet is correct and the value of the dollar increases, you will make a profit. In order to collect this profit, you will have to close your position. To do this, you must sell the US$100,000, in which case you will receive more than 80,000 euros in return.
Traders are not required to settle their positions on the delivery date, which usually arises two business days after the position is opened. Traders can roll over their positions to the next available delivery date. However, if a trader takes this route, he or she is left open to incurring a charge that can arise depending on his or her position and the difference between the interest rates on the two currencies in the pair.
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