forex trading-----------> earn u a fortune

Hello friends,

Let us get to the details and basics of forex trading. However, as one of our group members just mentioned that forex trading is risky. Yes, it is but everything is. Apart from that if we trade in small lots and do not become greedy then we can definately make a kill here.

Also, I would like to mention that I have tried all types of trading in forex and after a little trial and testing think that I have found the correct strategy. Once a few of us become active in forex trading I am planning to send a daily analysis report on the market underlying the trend for the day. Last but not the least take your own decision and do not rely even on me coz everyone here is a learner trying to make money or looking at ways_2_gain :-). By God's grace I have got a little knowledge which I am sharing with you all so that even u all benefit.

BASICS:-

a) PIPS:-

To start with let us consider what is pips. Basically most of the brokerage houses online do not charge brokerage for forex trading. There means of income is the difference between the buying and selling price of a currency.

So, let us suppose that we are trading in EUR/USD which is Euro- usd currency. The rates for the same are suppose as follows:-

BUY SELL
1.1870 1.1867

So, here the pips is 3. This varies from currency to currency and the lowest is 3 for the above pair and low for all other generally traded pairs. Now,when you are looking to buy a lot ( which is 10,000 units) of this pair( thinking that the price will approach 1.19 or upwards) then you are buying at the rate 1.1870. The total quantity will be 1.1870 x 10000 = 11870.

Once you have bought this quantity then 11870 will be called ur open position which is the same as we do in share trading.

HOPE THE ABOVE IS CLEAR.

b) LEVERAGE:-

This basically is the amount for which you can trade. Most online brokerage houses basically have a 1:200 ratio which means for every 1$ in ur account you can trade for 200$. Thus, for 1000 $ you have a total available position of 2 lac usd.

However, my experience says that you should reduce the leverage to 1:100 ratio ( allowed by my broker)as seeing more available position we, overcome by human nature and a sense of greed tend to over trade. Also, this can be used as a benchmark and revised in extreme cases for long term positioning.(Remember in forex trading long term means 2 weeks and more so do not confuse it with equities)


Rest of the details like account opening etc later friends.........

Bye do take care and let me know if u want any other details