The Right Way To Use Moving Averages In Forex Trading

If you think that the market is going to go up then you would buy a call option. Likewise, if you think that the market is heading down, you would buy a put option. The seller (or "writer") of the forex call option is obligated to sell the currency pair should the buyer so decide. The buyer of the call option pays a fee (called a premium) for this right.

The value of a PIP is $7.86. If your forex broker executes your trade at a spread of 4 PIPs, you are paying $31.44 whatever euphemism the broker is using for his commission. If your leverage or gearing is 200:1, that execution will cost you $62.88.

The global Forex (foreign exchange) market is estimated to turnover $4 trillion on average daily. By comparison, stock market turnovers are in the billions. So, the Forex market is easily the most liquid financial market in existence, period. So wouldn't you want a piece of the pie? With advancement of technology, trading Forex online has become much more accessible. There are literally dozens of online Forex brokers around the world. There has never been a better time to trade currency. In this article, I'll show you the safest and most profitable way to trade Forex online while minimizing and even eliminating risk altogether.

Seems like forex market never sleeps, however the trading volume and price movements are not the same during all the mentioned sessions. There are times when you should jump in and there are times when it is better to keep out.

Keep in mind 95% of traders lose and to win takes using the right knowledge and devising a robust system that can make profits longer term and preserve capital, we will look at this in more detail in part 2 of this article.

One of the theories as to why options have this magnetic attraction is down to hedging. Whether it is a put or call option, each trader looking to benefit on either side of the option. If we use the aforementioned 1.0350 AUD/USD call option (which would act as a put for USD) and say it was live on the market, so long as the market stays at 1.0351 or higher, people backing the call option gain exposure, whereas traders supporting the USD do not. The theory states that this results in a jostling for position that is seen with more regularity as an option reaches its expiry, which pulls the currency pair value towards the option’s strike price.

Many Forex traders usually depend on automated trading techniques. They most use the Forex robots or the provided expert advisers to engage in automated trading. It is only when using fixed spreads that the process of automated trading becomes easy, simple, and profitable. However, when the trader is under variable spreads or ECN, the process becomes very problematic and non-profitable. There are many benefits of using automated trading as the trade can be executed in the absence of the trader. When using the variable spreads, applying the automated trading techniques become very problematic because the Forex robots are unable to integrate the floating spreads. It subsequently results in trade losses.