Forex terms

Alligator
is a concept of technical indicators from Bill Williams to determine price trends. Is a combination of three (3) fruit and the Moving Average: 5,8,13. You can use it on the graph M30 (30 minutes) & H1 (1 hour). This indicator can be found on the MetaTrader software.

AUTO FOREX

AUTO FOREX TRADING SYSTEM

If you wish to make most of the forex trading opportunities, then auto forex system trading is something which could really assist you in this concern. Just select the best trading system and earn lots of money.

When it comes to earn lots of money with forex trading in an easiest manner, it is highly recommended to go for auto forex system trading. Now, you must be wondering why it is so. Well, before taking into the account of these systems, it is essential for you to consider their worth first. Basically, forex trade market works for twenty four hours a day. It means that opportunities of earning money can come at anytime. But, is it possible for you to monitor all these trade activities for the whole day? Well, the answer will definitely be no! Now, here comes the requirement of these auto forex system trading.

Hedging Techniques

Hedging Techniques


Hedging is a technique to minimize unwanted risk by opening opposite trading positions. Usually hedging strategy is used to limit risk without cutting losing positions. (as sometimes traders do not want to use Stop Loss).
By using hedging, a trader is able to mantain loss amount at a constant range (locking).

When is the time to trade forex ?

When is the time to trade forex ?
Forex can be traded 24 hours a day and 5 days a week. The main trading centers are in London, New York, Tokyo, and Singapore, but banks throughout the world participate. The biggest foreign exchange trading centre is London, followed by New York and Tokyo. Currency trading happens continuously throughout the day; as the Asian trading session ends, the European session begins, followed by the US session and then back to the Asian session, excluding weekends

The following approximate market schedule is based on New York local time: japan forex markets open at 19:00 followed by singapore and hong kong that open at 21:00. European markets open in frankfurt at 2:00, while london opens at 3:00. New york forex markets open at 8:00. European markets close at 12:00 and australian markets start again at 18:00.

What is a Swap (Rollover) ?

What is a Swap (Rollover) ?
Interest / Swap / Rollover refers to the interest traders may earn or be charged for holding open positions more than 1 day. Forex market calculates interest on a daily basis. At the end of each trading day at 5:00 pm New York timezone, traders will see the interest charged or interest income credited to their accounts To convert New York timezone to your local timezone please visit : http://www.timeanddate.com/worldclock/timezone.html?n=179

When opening forex transactions, the actual value date is two days forward. A deal which is done on Monday is for Wednesday’s value. A deal done on Friday is for Tuesday’s value (Saturday and Sunday are not couted), and so on. Please note : On Wednesday the amount of swap is multiplied three times (tripled) to compensate weekend holidays which swap is not charged.

How to Calculate Swap:
Traders will earn positive swap if the currency bought has greater swap rate than borrowed one.

Example :
USD/JPY Pair. USD Swap Rate = 5.25% , JPY Swap Rate = 0.5%
Buy USD/JPY means a trader is buying USD by borrowing JPY. Since bought currency’s swap rate (USD) is greater than borrowed currency’s swap rate (JPY), the trader will earn interest income : 5.25% - 0.5% = 4.75% When a trader Sell USD/JPY (means borrowing USD to buy JPY), the trader will be charged by interest fee : -5.25% + 0.5% = -4.75%

Example 2:
EUR/USD Pair. EUR Swap Rate = 3.75%, USD Swap Rate = 5.25%
Buy EUR/USD means a trader is buying EUR by borrowing USD. Since bought currency’s swap rate (EUR) is smaller than borrowed currency’s swap rate (USD), the trader will be charged by interest fee : 3.75% - 5.25% = -1.5% When a trader Sell EUR/USD (means borrowing EUR to buy USD), the trader will earn interest income : -3.75% + 5.25% = 1.5%

Forex Broker usually provides a list of daily swap rates for every currency pairs available. Traders could find interest fee / earning based on Buy or Sell positions they will trade. (swap is usually in $ or pips value). If the swap value is quantified in pips, traders need to convert pip to dollar by calculating pip value of corresponding currency pair.




At the image above, we can see that by holding Buy GBP/USD for more than 1 day, a trader will earn $12.81/day (Standard Lot). To check swap rate for a specific currency at MetaTrader Platform : Click right mouse button at forex quotes list => Symbols => Select desired currency pair => Properties

A Brief Introduction to forex Trading

Actually the existence of forex trading has long been available since the discovery of a technique to convert a country's currency into another country's currency. However, the new institutionally there after the establishment of the arbitration agency contracts (futures). An example is the IMM (International Money Market, founded in 1972) which is a division of the CME (Chicago Mercantile Exchange-specific product handling perishable commodities). Other examples are LIFFE (London International Financial Futures Exchange), TIFFE (Tokyo International Financial Futures Exchange).



The velocity of money that occurs in the forex market reach U.S. $ 5 trillion per day (survey BIS-Bank for International Settlements, in Setember 2008). This amount is 40 x greater than the velocity of money if the other futures exchanges like any commodity or stock markets in every developed country stock exchanges anywhere! This means that the big trading volume, this market is very liquid (liquid), and control of trade can not be held by only a few parties who have a large capital. These currency movements completely dependent on the market. There are many big and small players in the forex trading, but none of them are able to control the movement of foreign exchange rates.


Currency is often traded currencies of developed countries like the U.S. dollar (USD), Japanese Yen (JPY), Swiss Franc (CHF), British Pound Sterling (GBP), Australian Dollar (AUD) and Euros (EUR). All of these currencies are traded in pairs (called a pair), for example EUR / GBP, CHF / JPY and so on.

Then from where I benefit from this investment? In simple, the benefits of this investment from the difference in value when we buy and sell the currency back to the country concerned. For example, in April Amir purchase Dollars USD exchange rate. 8500, - per dollar as much as U.S. $ 1000. So at the time of purchase this currency Amir spending of Rp. 8500, - x 1000 = Rp 8,500,000, - Then in May, the dollar exchange rate strengthened against the rupiah to Rp. 9500, - per dollar so that Amir net profit gain when he sold the dollar return is for: (9500-8500) x 1000 = Rp. 1.000.000, - Easy and simple is not it? And because the average time it takes to buy and sell back the currency in question is usually no more than one month, then the forex trading are classified as investments with short-term.

Is Online Forex Trading (Valas Online) is gambling?

Can be yes or may not. Gambling or not is depending on the style of each trader. If you make a trade based on "feeling" or the chance and the original guess. Gamble, you certainly can, but if you do trade on the forex strategy and thorough analysis, both Technical Analysis (Technical Analysis) or Fundamental Analysis (Fundamental Analysis) then you are not a gambler but a trader.