Heating oil is produced from the refining of crude oil. The refining of crude yields 50% gasoline and 25% heating oil. This product of crude oil is also called distillate or Number 2 oil. In Europe, heating oil is called gas oil.
Heating oil is used primarily to heat homes in Northeast America. The US produces roughly 85% of its heating oil and imports the rest from Canada, Venezuela and the Virgin Islands. The production of heating oil generally increases in winter to ensure sufficient supply of oil to meet the seasonal demand. Heating oil futures are traded on the New York Mercantile Exchange (NYMEX) and on the ICE Europe Exchange.
Heating Oil Futures: How Weather Impacts Price
Thursday, January 27, 2011
Mid East Sour Crude Futures
East sour crude is the type of oil that is extracted from the Middle East countries, such as Saudi Arabia, Kuwait, Iran and Iraq. This region has more than 60% of the world's proven oil reserves. The distinctive feature of this crude oil is that it is high in sulfur and other impurities. As a result, East sour crude is difficult to refine into various distillate products, especially unleaded gasoline.
East Sour Crude Futures: Basics
East sour crude futures are standardized contracts in which a buyer agrees to take delivery of a specific quantity of sour crude oil at a predetermined price and date from the seller. The East sour crude futures market enables traders to:
hedge against adverse movements in oil prices. Companies and even individuals can benefit from hedging
speculate on the movement of East sour crude oil prices. Crude oil futures are extremely popular among big financial institutions and retail traders alike.
East Sour Crude Futures: Trading
Trading of the Middle East sour crude futures takes place at the Intercontinental Exchange (ICE). The ICE launched this derivative on May 21, 2007.
Low liquidity
East Sour Crude Futures: Basics
East sour crude futures are standardized contracts in which a buyer agrees to take delivery of a specific quantity of sour crude oil at a predetermined price and date from the seller. The East sour crude futures market enables traders to:
hedge against adverse movements in oil prices. Companies and even individuals can benefit from hedging
speculate on the movement of East sour crude oil prices. Crude oil futures are extremely popular among big financial institutions and retail traders alike.
East Sour Crude Futures: Trading
Trading of the Middle East sour crude futures takes place at the Intercontinental Exchange (ICE). The ICE launched this derivative on May 21, 2007.
Low liquidity
The Basics of Brent Oil Trading (BRT)
Brent oil is the light, sweet crude sourced from the North Sea. This crude oil was named 'Brent' after the Brent goose, as the oil exploration company Shell Oil had a policy to name its fields after birds. This crude oil is also known as Brent petroleum, Brent blend and London Brent and is used as a benchmark to price two thirds of the world's internationally traded crude oil supplies. Thus, when an economist mentions the price of oil, there is a high probability that they are quoting the cost of a barrel of Brent oil. This price is based on deals in the London-based Brent market, which is an informal arena where about $100 billion worth of oil contracts are traded each year.
Characteristics of Brent Oil
The following are the characteristics of Brent oil:
Characteristics of Brent Oil
The following are the characteristics of Brent oil:
Trading Commodities online with Easy-Forex®
Trading commodities on the Visual Trading™ platform is as simple and straight forward as it is to trade currencies. Easy-Forex® offers a number of commodities which are traded differently to currencies.
Energy Commodities
Energy Commodities traded with Easy-Forex® include, WTI Crude Oil, Brent Crude, Gas Oil and Heating Oil. These commodities are traded by investors for a number of reasons, including hedging, investing and speculating. On a large scale, energy commodities are traded by energy companies and consumers to hedge themselves against rising or falling prices.
Commodities are usually traded using futures contracts. A futures contract is a contractual agreement,
Energy Commodities
Energy Commodities traded with Easy-Forex® include, WTI Crude Oil, Brent Crude, Gas Oil and Heating Oil. These commodities are traded by investors for a number of reasons, including hedging, investing and speculating. On a large scale, energy commodities are traded by energy companies and consumers to hedge themselves against rising or falling prices.
Commodities are usually traded using futures contracts. A futures contract is a contractual agreement,
Leveraged Forex Trading
What is leverage in Forex trading?
Traders in Forex trade a contract of currency exchange rates. As the movement of currency rates can be very small, traders use leverage to increase their profit potential.
Here is a step-by-step, practical example:
You decide to open a contract for trade and it has these elements in it:
The currency pair for trading – e.g. EUR/USD
The direction of the trade - BUY euro and SELL US dollars
The price - say 1.3500
The contract value - EUR 100,000
As the trader, you purchase this contract, believing you will profit once you close (offset) the contract.
If you are right (for example: the rate increased to 1.3600), then you would profit: for every euro in this contract you made profit of 1 US cent. In total, the profit would be $1,000 (100,000 x 1 cent).
Traders in Forex trade a contract of currency exchange rates. As the movement of currency rates can be very small, traders use leverage to increase their profit potential.
Here is a step-by-step, practical example:
You decide to open a contract for trade and it has these elements in it:
The currency pair for trading – e.g. EUR/USD
The direction of the trade - BUY euro and SELL US dollars
The price - say 1.3500
The contract value - EUR 100,000
As the trader, you purchase this contract, believing you will profit once you close (offset) the contract.
If you are right (for example: the rate increased to 1.3600), then you would profit: for every euro in this contract you made profit of 1 US cent. In total, the profit would be $1,000 (100,000 x 1 cent).
Pips and spreads
Pips and spreads show the value of a currency pair to the investor and to the broker.
What is a pip?
A pip is a number value. In the Forex market, the value of currency is given in pips. One pip equals 0.0001, two pips equals 0.0002, three pips equals 0.0003 and so on.
One pip is the smallest price change that an exchange rate can make. Most currencies are priced to four numbers after the point. For example, a five pip spread for EUR/USD is 1.2530/1.2535.
What is a pip?
A pip is a number value. In the Forex market, the value of currency is given in pips. One pip equals 0.0001, two pips equals 0.0002, three pips equals 0.0003 and so on.
One pip is the smallest price change that an exchange rate can make. Most currencies are priced to four numbers after the point. For example, a five pip spread for EUR/USD is 1.2530/1.2535.
Real Time Foreign Exchange Software
Online foreign exchange occurs in real time. Exchange rates are constantly changing, in intervals of seconds. Thus, an online Forex system operates in real time. That means that quotes are accurate at the very moment they are displayed, and in 10 seconds or less a different rate may be quoted. Also, when a user locks in a rate and executes a transaction, that transaction is immediately processed and the exchange/trade has been executed.
Up-to-date exchange rates
As exchange rates change so rapidly, any Forex software must display the most up-to-date rates to the user. That means that Forex software is continuously communicating with a remote server that provides the current
Up-to-date exchange rates
As exchange rates change so rapidly, any Forex software must display the most up-to-date rates to the user. That means that Forex software is continuously communicating with a remote server that provides the current
Forex Software Security
An overview of the security needs of Forex software
Foreign exchange software should be designed for the utmost security, privacy, integrity and if necessary, recovery of data. Clearly, any security holes can mean millions of dollars in losses.
Secured data exchange
The common method for securing the exchange of data is to encrypt it. Encryption means that the data transferred over the communication line is encoded in a special way at the sending end, and decoded using the same algorithm in reverse at the receiving end. The data that goes through the communication channel is
Foreign exchange software should be designed for the utmost security, privacy, integrity and if necessary, recovery of data. Clearly, any security holes can mean millions of dollars in losses.
Secured data exchange
The common method for securing the exchange of data is to encrypt it. Encryption means that the data transferred over the communication line is encoded in a special way at the sending end, and decoded using the same algorithm in reverse at the receiving end. The data that goes through the communication channel is
Tools for Technical Analysis
Relative Strength Index (RSI):
The RSI measures the ratio of up-moves to down-moves and normalizes the calculation so that the index is expressed in a range of 0-100. If the RSI is 70 or greater, then the instrument is assumed to be overbought (a situation in which prices have risen more than market expectations). An RSI of 30 or less is taken as a signal that the instrument may be oversold (a situation in which prices have fallen more than the market expectations).
Stochastic oscillator:
This is used to indicate overbought/oversold conditions on a scale of 0-100%. The indicator is based on the observation that in a strong up trend, period closing prices tend to concentrate in the higher part of the
The RSI measures the ratio of up-moves to down-moves and normalizes the calculation so that the index is expressed in a range of 0-100. If the RSI is 70 or greater, then the instrument is assumed to be overbought (a situation in which prices have risen more than market expectations). An RSI of 30 or less is taken as a signal that the instrument may be oversold (a situation in which prices have fallen more than the market expectations).
Stochastic oscillator:
This is used to indicate overbought/oversold conditions on a scale of 0-100%. The indicator is based on the observation that in a strong up trend, period closing prices tend to concentrate in the higher part of the
Forex Technical Analysis
This article provides insight into one of the two major methods of analysis used to forecast the behavior of the Forex market. Technical analysis and fundamental analysis differ greatly, but both can be useful forecast tools for the Forex trader. They have the same goal - to predict a price or movement. The technical analyst studies the effect while the fundamentalist studies the cause of market movement. Many successful traders combine a mixture of both approaches for superior results.
Technical analysis
Technical analysis is a method of predicting price movements and future market trends by studying charts of past market action. Technical analysis is concerned with what has actually happened in the market, rather than what should happen and takes into account the price of instruments and the volume of trading, and creates charts from that data to use as the primary tool. One major advantage of technical analysis is that experienced analysts can follow many markets and market instruments simultaneously.
Technical analysis
Technical analysis is a method of predicting price movements and future market trends by studying charts of past market action. Technical analysis is concerned with what has actually happened in the market, rather than what should happen and takes into account the price of instruments and the volume of trading, and creates charts from that data to use as the primary tool. One major advantage of technical analysis is that experienced analysts can follow many markets and market instruments simultaneously.
Relative Interest Rates
How changes in interest rates drive currency prices and Forward prices
A common way to think about U.S. interest rates is how much it's going to cost to borrow money (for our mortgages or for other purposes), or how much we'll earn on our bond and money market investments.
Currency traders think bigger. Interest rate policy is actually a key driver of currency prices and typically a strategy for currency traders.
Fundamentally, if a country raises its interest rates, the currency of that country will strengthen because the higher interest rates attract more foreign investors. When foreign investors invest in U.S. treasuries, they must sell their own currency and buy U.S. Dollars in order to purchase the bonds. If you believe U.S. interest rates will continue to rise, you could express that view by going long on U.S. Dollars.
In simple words: You wish to “buy” a certain currency which “pays” more interest than the currency you are buying it with, which now “pays” less interest.
A common way to think about U.S. interest rates is how much it's going to cost to borrow money (for our mortgages or for other purposes), or how much we'll earn on our bond and money market investments.
Currency traders think bigger. Interest rate policy is actually a key driver of currency prices and typically a strategy for currency traders.
Fundamentally, if a country raises its interest rates, the currency of that country will strengthen because the higher interest rates attract more foreign investors. When foreign investors invest in U.S. treasuries, they must sell their own currency and buy U.S. Dollars in order to purchase the bonds. If you believe U.S. interest rates will continue to rise, you could express that view by going long on U.S. Dollars.
In simple words: You wish to “buy” a certain currency which “pays” more interest than the currency you are buying it with, which now “pays” less interest.
Option Trading
What is option trading?
A currency option allows the trader to buy or sell currency for a certain price at a certain time in the future. An ‘option’ means you can choose – you choose the price you want to buy or sell the currency and you choose the time you want to buy or sell. You make these choices before buying the option.
But, an option also means you can choose if you want to buy or sell when the time arrives. You are able to decide against completing the deal if that is what you choose.
What is a premium?
A premium in the Forex market makes the option deal possible. The premium is the price the trader pays to the broker to establish the option deal.
A currency option allows the trader to buy or sell currency for a certain price at a certain time in the future. An ‘option’ means you can choose – you choose the price you want to buy or sell the currency and you choose the time you want to buy or sell. You make these choices before buying the option.
But, an option also means you can choose if you want to buy or sell when the time arrives. You are able to decide against completing the deal if that is what you choose.
What is a premium?
A premium in the Forex market makes the option deal possible. The premium is the price the trader pays to the broker to establish the option deal.
Futures Trading
What is futures trading?
Futures trading in the Forex market is buying or selling a currency pair on a date in the future for a price that has been agreed before the trade. The date for closing the deal is called the delivery date. On this date, final settlement is made and the deal is completed.
The delivery date is sometimes called the value date.
Futures trading is different from option trading.
- In option trading, you can decide if you want to buy or sell when the time arrives. You are able to decide against completing the deal if that is what you choose.
Futures trading in the Forex market is buying or selling a currency pair on a date in the future for a price that has been agreed before the trade. The date for closing the deal is called the delivery date. On this date, final settlement is made and the deal is completed.
The delivery date is sometimes called the value date.
Futures trading is different from option trading.
- In option trading, you can decide if you want to buy or sell when the time arrives. You are able to decide against completing the deal if that is what you choose.
Forward deals
What are forward deals?
A forward deal is a contract where the buyer and seller agree to buy or sell an asset or currency at a spot rate for a specified date in the future (usually up to 60 days). Forward contracts are conducted as a way to cover (hedge) future movements in exchange rates. Margin spreads are higher than in Day Trading but no renewal fees are charged. Forward deals with easy-forex® are only
offered in some world regions.
What is the difference between forwards and futures?
The main difference between forwards and futures is the way they are settled.
A forward deal is a contract where the buyer and seller agree to buy or sell an asset or currency at a spot rate for a specified date in the future (usually up to 60 days). Forward contracts are conducted as a way to cover (hedge) future movements in exchange rates. Margin spreads are higher than in Day Trading but no renewal fees are charged. Forward deals with easy-forex® are only
offered in some world regions.
What is the difference between forwards and futures?
The main difference between forwards and futures is the way they are settled.
Strategies Against Risk
Learn about the basic strategies for controlling risks while trading Forex
The Forex market behaves differently from other markets. The speed, volatility, and enormous size of the Forex market are unlike anything else in the financial world. The Forex market is uncontrollable - no single event, individual, or factor rules it. Just like any other speculative business, increased risk entails chances for a higher profit or loss.
Currency markets are highly speculative and volatile in nature. Any currency can become very expensive or very cheap in relation to any or all other currencies in a matter of days, hours, or sometimes, in minutes. This unpredictable nature of the currencies is what attracts an investor to trade and invest in the currency market.
The Forex market behaves differently from other markets. The speed, volatility, and enormous size of the Forex market are unlike anything else in the financial world. The Forex market is uncontrollable - no single event, individual, or factor rules it. Just like any other speculative business, increased risk entails chances for a higher profit or loss.
Currency markets are highly speculative and volatile in nature. Any currency can become very expensive or very cheap in relation to any or all other currencies in a matter of days, hours, or sometimes, in minutes. This unpredictable nature of the currencies is what attracts an investor to trade and invest in the currency market.
Economic Indicators
Following is a list of economic indicators which are used in the USA. Obviously, there are many more in other leading economies (such as Germany, the UK, Japan, etc.). In general, not only the numerical value of an indicator is important, but also the anticipation and 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 worldwide. The "quality" of the published data may differ over time. The value of the indicator data is considered important if it presents new information, or is instrumental to drawing conclusions which couldn't be drawn under other reports or data. Furthermore, an indicator is highly valuable if one may use it to better forecast future trends.
Each indicator is marked with [High], [Medium], or [Low] - according to its level of importance; though these levels may change over time.
CCI - Consumer Confidence Index [High]
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. households and is considered one of the most accurate indicators of confidence. The idea behind consumer confidence is that when the economy warrants more jobs, increased wages, and lower interest rates, it increases our confidence and spending power. The respondents answer questions about their income, the market condition as they see it, and the chances to see increase in their income. Confidence is looked at closely by the Federal Reserve when determining interest rates. It is considered to be a big market mover as private consumption is two thirds of the American economy.
CPI - Consumer Price Index; Core-CPI [High]
Bureau of Labor and Statistics; Around the 20th of each month, 8:30am EST, covers previous month's data
The CPI is considered the most widely used measure of inflation and is regarded as an indicator of the effectiveness of government 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 [High]
Such macro indicators are followed by the vast majority of traders worldwide. The "quality" of the published data may differ over time. The value of the indicator data is considered important if it presents new information, or is instrumental to drawing conclusions which couldn't be drawn under other reports or data. Furthermore, an indicator is highly valuable if one may use it to better forecast future trends.
Each indicator is marked with [High], [Medium], or [Low] - according to its level of importance; though these levels may change over time.
CCI - Consumer Confidence Index [High]
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. households and is considered one of the most accurate indicators of confidence. The idea behind consumer confidence is that when the economy warrants more jobs, increased wages, and lower interest rates, it increases our confidence and spending power. The respondents answer questions about their income, the market condition as they see it, and the chances to see increase in their income. Confidence is looked at closely by the Federal Reserve when determining interest rates. It is considered to be a big market mover as private consumption is two thirds of the American economy.
CPI - Consumer Price Index; Core-CPI [High]
Bureau of Labor and Statistics; Around the 20th of each month, 8:30am EST, covers previous month's data
The CPI is considered the most widely used measure of inflation and is regarded as an indicator of the effectiveness of government 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 [High]
Day Trading
What is day trading?
Day trading is one way of performing foreign exchange trading. Usually day trading deals are opened and closed on the same day – you can make as many trades a day as you want. It is your decision.
It is possible for a day trading deal to last longer than one day. When this happens, the deal is automatically renewed at 22:00 GMT each night until the deal closes. Upon renewal you will be charged a fee for rolling the deal for an extra 24 hours. This fee will be collected once a day when the deal is renewed. The fee will be collected form your Free Balance in your trading account, and if there is no sufficient free balance then your credit card will be debited. If there is no credit card, the next time you have a free balance and execute a withdrawal from your account, the amount owed due to non-payments of the rolling fee will be deducted from the amount you have withdrawn.
Day trading is one way of performing foreign exchange trading. Usually day trading deals are opened and closed on the same day – you can make as many trades a day as you want. It is your decision.
It is possible for a day trading deal to last longer than one day. When this happens, the deal is automatically renewed at 22:00 GMT each night until the deal closes. Upon renewal you will be charged a fee for rolling the deal for an extra 24 hours. This fee will be collected once a day when the deal is renewed. The fee will be collected form your Free Balance in your trading account, and if there is no sufficient free balance then your credit card will be debited. If there is no credit card, the next time you have a free balance and execute a withdrawal from your account, the amount owed due to non-payments of the rolling fee will be deducted from the amount you have withdrawn.
Exotic Currency Trading
What is exotic currency?
Exotic currency is currency that is not common in the foreign exchange market. Exotic currency is usually from developing countries such as parts of Asia, the Pacific, the Middle East and Africa.
It is not as easy to trade exotic currency because the market does not have the same amount of activity for exotic currency as it does for main currencies. The main currencies include "majors" and "minors".
Major currencies are the ones most commonly traded. They include the United States dollar (USD), the euro (EUR), the Japanese yen (JPY), the British pound sterling (GBP), and the Swiss franc (CHF). Some groups also include the Australian dollar (AUD) as a major currency, though it is often considered a minor. Minor currencies also include the Canadian dollar (CAD) and the New Zealand dollar (NZD)
Exotic currency is currency that is not common in the foreign exchange market. Exotic currency is usually from developing countries such as parts of Asia, the Pacific, the Middle East and Africa.
It is not as easy to trade exotic currency because the market does not have the same amount of activity for exotic currency as it does for main currencies. The main currencies include "majors" and "minors".
Major currencies are the ones most commonly traded. They include the United States dollar (USD), the euro (EUR), the Japanese yen (JPY), the British pound sterling (GBP), and the Swiss franc (CHF). Some groups also include the Australian dollar (AUD) as a major currency, though it is often considered a minor. Minor currencies also include the Canadian dollar (CAD) and the New Zealand dollar (NZD)
The Euro-US Dollar Currency Exchange
The euro-dollar exchange rate is the price at which the world demand for US dollars equals the world supply of euros. Regardless of geographical origin, a rise in the world demand for euros leads to an appreciation of the euro.
Factors affecting exchange rates
Four factors are identified as fundamental determinants of the real euro to dollar exchange rate:
The international real interest rate differential
Relative prices in the traded and non-traded goods sectors
The real oil price, precious metals and other commodities.
The relative fiscal position
Factors affecting exchange rates
Four factors are identified as fundamental determinants of the real euro to dollar exchange rate:
The international real interest rate differential
Relative prices in the traded and non-traded goods sectors
The real oil price, precious metals and other commodities.
The relative fiscal position
E-currency
What is e-currency?
E-currency is money that is exchanged on computers. "E" is the first letter of the word "electronic" and "currency" is a money system. You can think of e-currency as Internet money.
Buying and selling products and services on the Internet is possible because of e-currency. In the present time, more security on the Internet means more people are now buying and selling online. Modern security means it is now safer to deal on the Internet, but there are still some risks involved.
Credit cards are a popular example of e-currency. E-wallets (online money vendors) is another.
E-currency is money that is exchanged on computers. "E" is the first letter of the word "electronic" and "currency" is a money system. You can think of e-currency as Internet money.
Buying and selling products and services on the Internet is possible because of e-currency. In the present time, more security on the Internet means more people are now buying and selling online. Modern security means it is now safer to deal on the Internet, but there are still some risks involved.
Credit cards are a popular example of e-currency. E-wallets (online money vendors) is another.
Currency Acronyms and Abbreviations
Australian Dollar AUD
British Pound GBP
Euro EUR
Japanese Yen JPY
Swiss Franc CHF
US Dollar USD
Afghanistan Afghani AFN
Albanian Lek ALL
Algerian Dinar DZD
Angolan Kwanza AOA
Argentine Peso ARS
Armenian Dram AMD
Aruban Florin AWG
Australian Dollar AUD
Azerbaijan New Manat AZN
Bahamian Dollar BSD
Bahraini Dinar BHD
Bangladeshi Taka BDT
Barbados Dollar BBD
Belarusian Ruble BYR
Belize Dollar BZD
Bermudian Dollar BMD
Bhutan Ngultrum BTN
Bolivian Boliviano BOB
Bosnian Mark BAM
Botswana Pula BWP
British Pound GBP
Euro EUR
Japanese Yen JPY
Swiss Franc CHF
US Dollar USD
Afghanistan Afghani AFN
Albanian Lek ALL
Algerian Dinar DZD
Angolan Kwanza AOA
Argentine Peso ARS
Armenian Dram AMD
Aruban Florin AWG
Australian Dollar AUD
Azerbaijan New Manat AZN
Bahamian Dollar BSD
Bahraini Dinar BHD
Bangladeshi Taka BDT
Barbados Dollar BBD
Belarusian Ruble BYR
Belize Dollar BZD
Bermudian Dollar BMD
Bhutan Ngultrum BTN
Bolivian Boliviano BOB
Bosnian Mark BAM
Botswana Pula BWP
Gold Trading History
Gold trading has a long history. Discovered in ancient times, gold has been a sign of wealth and social position in many societies since it was first used as currency. Today gold is still an important material of trade and business.
Countries value gold as a measure of wealth and a base of exchange. Individuals value gold as insurance because paper money is not always certain.
Gold continues to have effects on world financial markets today and will into the future.
The Gold Standard
Here's a WIKIPEDIA explanation of the Gold Standard:
Countries value gold as a measure of wealth and a base of exchange. Individuals value gold as insurance because paper money is not always certain.
Gold continues to have effects on world financial markets today and will into the future.
The Gold Standard
Here's a WIKIPEDIA explanation of the Gold Standard:
Currency Pairs
What are currency pairs?
In the foreign exchange market, currency is traded in pairs. Pairs have meaning in relation to each other so must always stay together.
The two currencies in a pair are traded one against the other. The rate at which they are traded is called the exchange rate. The exchange rate is affected by currency supply and demand.
Most common currencies
The most common currencies traded in the market are called "majors". Most currencies are traded against the United States dollar (USD). USD is traded more than any other currency. The five currencies most traded next are: the euro (EUR); the Japanese yen (JPY); the British pound sterling (GBP); the Swiss franc (CHF), and the Australian dollar (AUD). Trades of the six major currencies total 90% of the market.
The most common currency pair is EUR/USD.
The exchange rate
The exchange rate is always changing. The value of one currency is determined by market supply and demand forces, by comparing it to another currency. In a currency pair, the first currency is called the "base currency"; the second currency is called the "quote currency" or "counter currency".
When you buy a currency pair, you buy the base currency and sell the quote currency. The exchange rate tells buyers how much of the quote currency they need to buy one of the base currency. The order in a pair always stays the same, being a common approach by the industry. USD/JPY, for example, is a pair (USD = base, JPY = the quote). The order within the pair, in the way you use the term, does not change. So you either BUY it or SELL it, depending on the direction of the trade. For example: USD/JPY – you either BUY JPY using USD or you Sell JPY to get USD. On the currency rate table on the easy-forex® website you can view the
In the foreign exchange market, currency is traded in pairs. Pairs have meaning in relation to each other so must always stay together.
The two currencies in a pair are traded one against the other. The rate at which they are traded is called the exchange rate. The exchange rate is affected by currency supply and demand.
Most common currencies
The most common currencies traded in the market are called "majors". Most currencies are traded against the United States dollar (USD). USD is traded more than any other currency. The five currencies most traded next are: the euro (EUR); the Japanese yen (JPY); the British pound sterling (GBP); the Swiss franc (CHF), and the Australian dollar (AUD). Trades of the six major currencies total 90% of the market.
The most common currency pair is EUR/USD.
The exchange rate
The exchange rate is always changing. The value of one currency is determined by market supply and demand forces, by comparing it to another currency. In a currency pair, the first currency is called the "base currency"; the second currency is called the "quote currency" or "counter currency".
When you buy a currency pair, you buy the base currency and sell the quote currency. The exchange rate tells buyers how much of the quote currency they need to buy one of the base currency. The order in a pair always stays the same, being a common approach by the industry. USD/JPY, for example, is a pair (USD = base, JPY = the quote). The order within the pair, in the way you use the term, does not change. So you either BUY it or SELL it, depending on the direction of the trade. For example: USD/JPY – you either BUY JPY using USD or you Sell JPY to get USD. On the currency rate table on the easy-forex® website you can view the
Forex Market History
This article is an overview into the historical evolution of the foreign exchange market. It follows the historical roots of the international currency trading from the days of the gold exchange, through the Bretton Woods Agreement, to its current setting.
The Gold exchange period and the Bretton Woods Agreement.
The Bretton Woods Agreement, established in 1944, fixed national currencies against the dollar, and set the dollar at a rate of 35USD per ounce of gold. In 1967, a Chicago bank refused to make a loan in pound sterling to a college professor by the name of Milton Friedman because he had intended to use the funds to short the British currency. The bank's refusal to grant the loan was due to the Bretton Woods Agreement.
This agreement aimed at establishing international monetary steadiness by preventing money from taking flight across countries, and curbing speculation in the international currencies. Prior to Bretton Woods, the gold exchange standard - dominant between 1876 and World War I - ruled over the international economic system. Under the gold exchange, currencies experienced a new era of stability because they were supported by the price of gold.
The Gold exchange period and the Bretton Woods Agreement.
The Bretton Woods Agreement, established in 1944, fixed national currencies against the dollar, and set the dollar at a rate of 35USD per ounce of gold. In 1967, a Chicago bank refused to make a loan in pound sterling to a college professor by the name of Milton Friedman because he had intended to use the funds to short the British currency. The bank's refusal to grant the loan was due to the Bretton Woods Agreement.
This agreement aimed at establishing international monetary steadiness by preventing money from taking flight across countries, and curbing speculation in the international currencies. Prior to Bretton Woods, the gold exchange standard - dominant between 1876 and World War I - ruled over the international economic system. Under the gold exchange, currencies experienced a new era of stability because they were supported by the price of gold.
Why trade Forex?
Easy Choice
With four major currency pairs (EUR/USD, GBP/USD, USD/JPY and USD/CHF), Forex is a fairly simple trading instrument. Unlike stocks where you have thousands of portfolios you can sharpen your skills one just a few pairs before you more onto more exotic currencies, precious metals or energy commodities.
Non-stop Liquid Market
Forex is the basis of world economies which is what makes it such a vast and liquid market. This is good news for the trader as it means there are fewer price gaps and unpredictable spikes. The currency markets overlap around the world giving you 24 hour access 5 days of the week. This gives greater flexibility to your trading and allows you to take advantage of market opportunities as they arise.
Opportunities and Risks
The price of currencies fluctuate constantly but at small amounts. Leverage is what allows you to optimize profits – but it also carries extra risk! With 1:100 leverage, you have $100 for every $1 you invest allowing you to magnify your profits (but beware, also your loss). As currencies are sold in pairs – you can profit in rising or falling markets, whether you are buying or selling a currency. The key is to buy when a currency is low and sell it back once it is high. easy-forex® includes Stop Loss and Take Profit orders to help traders with their risk management.
Start easy
Trading Forex online is instant and with real-time prices you can open and close deals at the click of a button. You can enter with low minimum deposits, pay with your credit card and begin trading almost immediately. There are no commissions, clearing or exchange fees for you to pay; as a Market Maker, easy-forex® makes its money from the spread and rolling fees (where deals are open past market closing for the day).
With four major currency pairs (EUR/USD, GBP/USD, USD/JPY and USD/CHF), Forex is a fairly simple trading instrument. Unlike stocks where you have thousands of portfolios you can sharpen your skills one just a few pairs before you more onto more exotic currencies, precious metals or energy commodities.
Non-stop Liquid Market
Forex is the basis of world economies which is what makes it such a vast and liquid market. This is good news for the trader as it means there are fewer price gaps and unpredictable spikes. The currency markets overlap around the world giving you 24 hour access 5 days of the week. This gives greater flexibility to your trading and allows you to take advantage of market opportunities as they arise.
Opportunities and Risks
The price of currencies fluctuate constantly but at small amounts. Leverage is what allows you to optimize profits – but it also carries extra risk! With 1:100 leverage, you have $100 for every $1 you invest allowing you to magnify your profits (but beware, also your loss). As currencies are sold in pairs – you can profit in rising or falling markets, whether you are buying or selling a currency. The key is to buy when a currency is low and sell it back once it is high. easy-forex® includes Stop Loss and Take Profit orders to help traders with their risk management.
Start easy
Trading Forex online is instant and with real-time prices you can open and close deals at the click of a button. You can enter with low minimum deposits, pay with your credit card and begin trading almost immediately. There are no commissions, clearing or exchange fees for you to pay; as a Market Maker, easy-forex® makes its money from the spread and rolling fees (where deals are open past market closing for the day).
What is Forex?
Foreign exchange (Forex) is the exchange of money from different countries. The value of one country’s currency is constantly changing against the value of another country’s currency. Forex traders make money through buying and selling currencies on the foreign exchange market. The profit potential comes from the fluctuations (changes) in the currency exchange market. You make money by buying a currency at a particular rate (or price) and selling it again for more than you bought it.
Here is an example: EUR/USD 1.2500 means you need 1.25USD to buy one euro. It also means if you sell one euro you get 1.25USD. All trades involve buying one currency and selling another currency at the same time. If in the next day the Euro is rising against the USD and the exchange rate is now 1.26, for every 1 Euro that you bought, you have earned 1USD cent. Or, if you traded the opposite direction, for every EUR that you sold (at 1.25) you lost 1USD cent (since you “buy” back the EUR for 1.26).
Here is an example: EUR/USD 1.2500 means you need 1.25USD to buy one euro. It also means if you sell one euro you get 1.25USD. All trades involve buying one currency and selling another currency at the same time. If in the next day the Euro is rising against the USD and the exchange rate is now 1.26, for every 1 Euro that you bought, you have earned 1USD cent. Or, if you traded the opposite direction, for every EUR that you sold (at 1.25) you lost 1USD cent (since you “buy” back the EUR for 1.26).
Wednesday, January 5, 2011
OVERCOMPLICATED TRADING
Human tends to over-complicate things. It is in our nature to try and improve what we have but most of the time we overcomplicated things and forget about the simple solution.
In my previous post, I posted a chart of a basic system. It consist of candle stick chart, moving average and macd. Only 3 indicators and it is a very simple system rite?
The answer is, it is not so simple actually. Candle stick alone tell you 4 things that is, open, close, high and low price. MA tells you direction of trend, entry point, start and end of trend. Macd tell you trend, entry point, reversal point.
In my previous post, I posted a chart of a basic system. It consist of candle stick chart, moving average and macd. Only 3 indicators and it is a very simple system rite?
The answer is, it is not so simple actually. Candle stick alone tell you 4 things that is, open, close, high and low price. MA tells you direction of trend, entry point, start and end of trend. Macd tell you trend, entry point, reversal point.
Forex Is An Art
When you say trading, people will say trading is an art. Look at all the books that has been published on the subject. They will say the art of trading forex.
In that sense, we must take forex as an art and not a science. I know, some people may not agree with me and all the post that is in this blog. I don't blame them coz I was actually in the same place as they were when I started trading. Trying to find the answer to forex using every logical explanation.
This is the answer that you have been looking for. I am going to give it to you straight away. Let see if your mind can accept it.
In that sense, we must take forex as an art and not a science. I know, some people may not agree with me and all the post that is in this blog. I don't blame them coz I was actually in the same place as they were when I started trading. Trying to find the answer to forex using every logical explanation.
This is the answer that you have been looking for. I am going to give it to you straight away. Let see if your mind can accept it.
GOLD SYSTEM
Buy
1. price above buy zone fib, blue rsi chart bar
2. William's percent range indicator gold line entering or inside blue area
above -25.00
3. RSIOMA clearly crossed up
Sell
Mr Snake & The Wave
All of you can try this indicator.i got it from forex-tsd.Mainly,this indicators were use for TF 5 minute and TF 15 minute for scalping.But i don't like scalping,so that,i was use this indicators on TF 4 hour and TF daily.Hopefully you got good trading when use this indicators.click on the picture to see how to use this indicators.
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