What is the point × and?
Currencies are traded on a price / point (PIP). Each currency pair has a value for the point.
When you see the exchange rates, see something like this:
EUR / USD 1.2210/13
Explanation:
A) If you want to buy the EUR / USD (which means buy euros and sell U.S. dollars) to buy 100,000 euros, and you sell 122 130 United States dollars, or in other words, receive
U.S. $ 122.130 to 100,000 euros.
B) If you want to sell EUR / USD (ie you sell Euros and buy U.S. dollars) to buy 122,100 U.S. $ 100,000 and sell euros or in other words you receive 100,000 euros for 122,100 U.S. dollars.
Seen the difference between the bid and ask prices as the spread. In the example above, the difference is 3 points or 3.
Since the U.S. dollar is the focus of the foreign exchange market, and is usually considered the 'base' currency for stocks. In the "majority", and that includes the dollar / yen and dollar / Swiss franc and U.S. dollar / Canadian dollar. Of these currencies and many others, and reflects the price per unit of U.S. $ 1 per the second currency quoted in the pair.
For example, a quote of USD / CHF 1.3000 means that one U.S. dollar before it gets to 1.30 Swiss francs. In other words, you receive 1.30 Swiss francs to U.S. $ 1 each.
When the U.S. dollar is the basic unit and currency quote goes up, it means that the dollar has returned in estimating the value of the currency and the other has weaknesses. If the quote USD / CHF at 1.3050 increases higher than the value of the dollar is stronger because it will buy the Swiss franc is now more than ever before.
Three exceptions to this rule is the pound sterling (GBP) Australian Dollar (AUD), Euro (EUR). In these cases, you may see marks such as the EUR / USD 1.2080, meaning that for EURO you receive 1.2080 U.S. dollars.
In these three currencies, where the U.S. dollar is not the base rate, a quote means a weakening dollar high, because it now takes more U.S. dollars to equal 1 €, the pound sterling or Australian dollars.
In other words, if a currency quote goes higher, which increases the value of the base currency. This means lower prices for the base currency is weakening.
Called currency pairs that do not involve the U.S. dollar through the currency, but the account is the same. For example, a quote of 134.50 means the euro / yen to one euro equals 134,50 ¥ Japanese.
How to buy (go "long") and sell (go "short") in the forex market?
Keep in mind rules 2 very important:
Rule # 1) cut the loss of your trades and leave your job to give the victory
You from losing trades. Each dealer has a FX. The secret is that a coherent, disciplined trader, at the end of the day, the letter adds more losing trades than winning.
And when you see your cards, no doubt, you are in a losing trade, do not keep losing money. Most traders are beginning to cut their losses depend only on to "prove they are right" or "hoping the market will reverse." 99% of these jobs, end up with more losses. The most profitable trades are usually "right" immediately.
Remember, smart traders know that there are many other occasions. Cut your losses short and complex situations to win.
Article 2) Never trading in foreign currencies without placing an order to stop.
Placing an order to stop, and the right side by side with the system input, via online trading terminal, to prevent potential losses.
Before you begin any work, and should be calculated when the (price), you would be wrong, because the market changed direction, and will cut your losses.
To make a profit in the forex trader can enter the market a long position * (known as going "long") or last sale ** (known as going "short").
For example, suppose you have studied the euro. EURO is paired first with the U.S. dollar or U.S. dollar.
Ways your trading, rules, strategies, and so on, you say that the euro will be the rice in the coming weeks 2, so you can buy in the sense euros / dollars, euros to buy and sell at one time dollars).
Open your trading station an excellent program (provided to you free of Phoenix Capital Management LP, a limited liability company www.fenixcapitalmanagement.com), and believes that the euro / dollar trading at the following address:
EUR / USD: 1.2010/1.2013
Also believes that the market price for the EUR / USD goes up, you enter a buy position in the market. **
For example, say you bought a set / USD 1.2013 euros. Until you sell the pair at a higher price, then make money.
To illustrate a typical trading in foreign currency to sell, consider this scenario involving the USD / JPY currency pair:
Remember sale ("short leave") the currency pair implies selling the first, base currency and the quote currency to buy the second. You sell a currency pair if you think that the base currency (USD) will decline relative to the presentation currency (JPY), or equivalent, and the quote currency (JPY) will increase relative to the major currencies (USD).
How to calculate profit or loss?
May benefit accounts, the scenario of trade in a short sale below, seem complicated to some extent if you've never been in the foreign exchange market before, but this process is calculated continuously through an intermediary your trading station (software). Show you this process below so you can see how a profit can occur.
Current bid / ask price for USD / JPY 107.50/107.54, meaning you can buy $ 1 U.S. for 107.54 yen, or Sale $ 1 United States for 107,50 ¥.
Suppose you think that the overvalued U.S. dollar (USD) against the Japanese Yen (JPY). For the implementation of this strategy, and will sell the dollar (buy at one time yen), then wait for the exchange rate to rise.
That your job is: you sell a lot ($ 100,000) dollars, and you buy 1 lot JPY (10,754.000 yen). (Remember, on the margin of 0.25%, your initial margin deposit for this trade would be $ 250.)
As expected, USD / JPY is 106.50/106.54, meaning you can now buy $ 1 U.S. $ 106.54 for the Japanese yen or sell $ 1 U.S. for 106.50.
Since you're short dollars (and yen long), you must now buy dollars and sell yen again to make a profit.
You can buy a $ 100,000 U.S. for the price of the dollar / yen from 106.54 the current, and receive ¥ 10654000. Since I had originally bought (paid for) 10,754,000 yen, your profit is 100,000 yen.
To calculate your P & L in terms of U.S. dollars, and the division of 100000 according to the rate of USD / JPY 106.54 from the current
Total profit = U.S. $ 938.61
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