United States – Trading POC

What Is A Currency Cross Pair In Forex Trading

Posted on October 9, 2019 by blogger

A currency cross pair, also referred to as cross-currency pair or simply as a cross, involves a pair of currencies neither of which is the United States dollar. An example of a currency cross pair is the GBP/JPY, in which the two currencies in the quote are the British pound and the Japanese yen. Other examples include EUR/JPY, EUR/CAD, CHF/JPY, and AUD/CHF.

In ancient times, if you wanted to convert one currency to another, you would be required to first exchange the former into US dollars before exchanging the dollar amount into your desired currency. As an example, if an individual wanted to convert his British pound into Japanese yen, he would be required to start by exchanging the pounds into the almighty dollar, and then exchange these dollars into yen. Cumbersome, is it?

However, with the advent of the concept of cross-currency pairs, this cumbersome process has been simplified. It is now possible to exchange one currency for another while bypassing to first convert it to the United States dollar. Therefore, currency cross pairs allows for a direct exchange between two currencies.

To calculate currency crosses is not difficult. For example, if we want to get the bid/ask price for GBP/CHF, we will start by looking at the bid/ask price for both GBP/USD and USD/CHF. We will look at these pairs because both of them have the United States dollar as their common denominator. GBP/USD and USD/CHF are known as the legs of GBP/CHF since they are the United States dollar pairs linked with it.

Now, if we found the following prices for the pairs:
GBP/USD: 1.5000 (bid)/ 1.5005 (ask)
USD/CHF: 0.9800 (bid)/ 0.9803 (ask)
Then, to determine the bid price for GBP/CHF, we simply multiply the bid prices for GBP/USD and USD/CHF. If we do the math, this comes to 1.4700. To get the ask price for GBP/CHF, we multiply the ask prices for GBP/USD and USD/CHF, and this comes to 1.4709.

Currency cross pairs are important in the foreign exchange market because they create more opportunities for traders by providing them with more currencies to trade. Basically, the chart patterns formed by crosses are cleaner than they are on the other major currency pairs; thus, they are easier to forecast. If you want to keep off from trading the United States dollar because of a major occurrence or any other thing, then cross currency pairs is the best alternative.

Forex Trading Secret !

Posted on August 3, 2019 by blogger

Automated Forex Trading: Clever yet Effective Technology

Why Forex trading?

This is probably one of the questions that you need a reasonable answer. There are hundreds of investments out there that you can prefer, but why go trading foreign currencies instead?

Forex investment is unique in various aspects.

Its trading volume is relatively huge compared to other market.
It has extreme liquidity or the capability of either buying or selling the currency without causing significant movement in the market price.
It has the largest number and variety of traders.
It is one of the markets that have long trading hours (24 hours each day, except during weekends.
Trading locations are almost everywhere, not just in the United States or major cities of Europe.
There are different factors that affect foreign exchange rate.

Another whooping fact that will make you excited to go on Forex trading: it has an average turnover in traditional foreign exchange market of around $1.88 trillion daily, according to the Triennial Central Bank Survey of the BIS (Bank for International Settlements). Here are the daily averages of turnover on the Forex market for the last 17 years:

$500 billion (April 1989)
$750 billion (April 1992)
$1.18 trillion (April 1995)
$1.48 trillion (April 1998)
$1.16 trillion (April 2001)
$1.88 trillion (April 2004)

From the figures alone, you will notice that the average trend of Forex turnover is increasing. It is estimated to reach as high as 2 to 3 trillion dollars within the next 8 to 10 years, if the number of traders around the world will continue to increase. As a matter of fact, everyone have the chance of getting a substantial slice of the Forex market wealth pie, especially that the Forex trading marketing is now on its automation process.

The concept of automation becomes the new trend to the foreign exchange trading market. The Interbank spot Forex market has also considered switching to the automated method as well.

There are several benefits that a Forex trader can derive from automated Forex trading. Here are some of such benefits and figure out why Forex trading as well as other investments (futures and commodities) prefer the automated process.

Through automated process, transactions can now be done in real time. Although manual systems have existed for quite some time now, it is difficult to achieve such benefit that the automated Forex system can offer to its traders. All of the trades can happen within a few milliseconds and can be a big plus for automated transactions against the manual system. In fact, there are problems that are addressed using automated Forex trading especially if the trader is losing a few times in a row that prevents him from making new trades. Such problem could be addressed using the automatic trading system.

With automated Forex trading, you will have a greater diversification. It means that you can trade in various markets in different time zones at a time. You can execute trades with traders from Singapore or London even it is already 12 midnight in the United States. This benefit allows you a multiple exchange model option. You can use varying trading models to evaluate short-term data. This means that you will be able to predict the trend for a shorter period of time, let us say from fifteen minutes to half an hour.

As previously mentioned, the Forex market is unique because of its extreme liquidity. This liquidity is increased when the market goes automated.

Risk management problems are solved through automated Forex trading. International checks, which are commonly used in making purchases on Forex market, are synchronized through automated technology. Since the transaction in an automated process is now on real time, there is a slim chance that the payments will be delayed, reducing the risk of non-payment by either parties. Although there are problems noted with the use of the automated system, it can be fixed through consistently-updated technologies.

With automated Forex trading market, the prediction of $2-3 trillion average daily turnover within the nest 8 to 10 years can be changed within the next 4 to 5 years. Given the quick yet efficient trades on varying time zones, automated Forex trading will now be among the existing lucrative business around the world.

Options Trading In A Nutshell-the General Concept Behind Options Trading

Posted on March 5, 2019 by blogger

Perhaps among the most complicated and possibly the riskiest type of trading is option trading. Many seasoned traders realize that option trading does not suit all traders. It requires its own type of people, usually the risk takers. And the trade itself requires skills and knowledge unique only to people who won’t fold under extreme risks. Most experts recommend this kind of trading only to those folks who have enough risk capital as it carries with it large risks.

By default, it is also speculative. So if you are a person who doesnt like to speculate too much, you should find another kind of security which will work best for you. However, rejecting the idea of entering this trade right now is as risky as not knowing anything about it. It carries with it risks, thats true,for sure, but it is also a highly profitable venture. You might as well try to understand something on it such that you could decide whether to go for options trading or not.

While it is inherently risky, option trading also puts forth advantages that may not be had with different types of trades. Some of its wonderful advantages is the flexibility it lends its investors. Each lender has the option to trade at a specific price within a specific period.

It is also, when comparing the two, a more advantageous type of trade due to its high leverage it offers. Depending on the location, each option may cover a few underlying assets. In the United States, for instance, each option may represent for 100 underlying assets. Thus, this principle lends the holder the capacity to gain from several assets within a single option.

So tell me about an option?

An option is a kind of security, generally closely comparable to bonds and stocks. It is, on its own, a binding contract, that is monitored by and through strict terms and conditions. In gist, options are contracts that owners could buy or sell at a certain price before or on a certain date. An option is typically an additional price tag to a specific asset or item because it is a reservation for the purchase or sale of a specific asset.

Options are also occasionally called derivatives. This is due to the fact that the value of an option is derived from the value of the underlying asset.

To better understand this topic, lets look at the example below:

Say you have considered buying a real estate property which is worth several hundred thousand dollars. But, when you originally negotiated with the owner, you did not have enough money to purchase the property on the spot. So you made a deal with the owner to pay an extra $5,000 to keep the deal for you for the length of two months. The extra money you shelled out is called the options. In case you dont want to continue with the sale, the owner of the real estate is not allowed to force you to purchase the property nor can the law impose the sale on you. But, you would still have to shell out the price of the option.

In conclusion, when thinking about purchasing a property with an enclosed option, you will have the right to continue with the sale or to discontinue the sale. You are not mandated to do either of the two. But be aware, you could lose 100% of your total investment in options trading which is the value of the option itself.

Day Trading. The Pros And Cons.

Posted on January 23, 2018 by blogger

Day trading is the practice of buying and selling a financial instrument within the same trading day, so that all positions are fully flat or zeroed before the markets close for the day. The one caveat about day trading is that there are some regulatory issues in certain countries when day trading stocks.

In the United States, the day trader must have an account balance of no less than $25,000 to actively day trade. If an account has less than the $25,000 required, they are allowed 3 day trades in a 5 day time period. What this means is that if you close out three separate trades within this time frame, you can be flagged as an active trader, and forced to either deposit enough money to bring the account up to the $25,000 minimum, or be forced to wait six months to trade again! There are similar rules in several countries around the world, so make sure to check with your local regulatory authority.

For those of you that have the account size, day trading can be very rewarding if done successfully. One of the advantages of day trading is that you close your positions at or before the end of the day. There is no possibility of having a market gap down or up against you at the open on the next day. Your funds are safe as you have no position.

Another reason that day trading can be so advantageous is that your stop losses typically are smaller, letting you leverage up your position to supercharge your gains by trading on margin. Of course, this can work against you just as easily. Trading on margin can work both ways so always be careful using it.

One of the most important aspects of a successful day trader is discipline. In order to take advantage of those small stops and high leverage, you must be very disciplined to follow your system to the letter. You cannot get emotional and flustered during the heat of the moment, as mistakes can be costly. If you are not disciplined, this is not a trading style for you.

Of course, one of the best things about day trading is that most trades are quick by their very nature, allowing a trader to go on about their day without using too much time. This is without a doubt the most appealing aspect of day trading. You can be done with your day in 30 minutes sometimes. This leaves all kinds of opportunities to spend extra time with your family and friends. Try doing that from an office!

Another advantage a day trader might have is volume discounts. Some brokers allow for commission discounts for high volume traders. This of course will vary from broker to broker, but some of the discounts are quite steep.

Day trading isnt for everyone. However, if you can follow a trading plan with the upmost discipline, have the account size, and can remain extremely focused, day trading might be for you. Knowing that the frequency of trades can work both for and against you, it is highly advisable to use a demo account to try day trading out for a trial period before committing any real capital to it.

It takes hard work, but your work days could be done before 10 a.m. every day!

Zero Loss Strategy In Forex Trading

Posted on December 12, 2017 by blogger

This post will irritate many and possibly most forex traders and I say good. Actually I do not give a damn if any of you learn this article.And it is secondary to me that most forex merchants are silly or at best, sick-informed. It is secondary to me that I profiteer drastically every single day and without fail and most idiot merchants lose it all.

The reality is that the majority FX merchants are sheep who blindly drift alongside a confused path of marketing hype and most foreign exchange trainers are only huge-noting “expert status” all the time utilizing greed only pursuading the plenty one thing under masks of “guru”.I’m simply totally different as a result of I reliably and predictably make a not special $30,000 clear free cash flow profit most trading days and I have never any interest in selling you anything. There’s not a factor you should buy from my website.With the appearance of computer-primarily based Platforms Buying and selling, the palms-on however felony 4x dealer out of the middle-man market manipulations that dealing-desk trading was previously corrupted with – us retail traders have extra of an trustworthy capability to revenue from the markets. The Platforms Buying and selling mechanism is extra fair.

Although there’s nonetheless brokerage homes that scam trades through platforms trading – mostly it is just stupid buying and selling that generates losses.Anyway, with all that mentioned, let’s now get my most annoying reality on the market to be considered so you’ll be able to all vomit, and rant and rave that I in fact am a complete lunatic. Right here it is now said;”Stop Loss concepts do NOT Stop Losses – they CONFIRM LOSSES”.I state it is totally unsuitable to shut foreign exchange trades that are exhibiting a loss when with ninety five percent that commerce might be exited from with profits at some later time.Getting in your face about this – any 4x buying and selling place that dropping floor now will invariably be in or worst case break even at some future time because of modifications in market herd mentality, information occasion, Fibo retracement or whatever – almost at all times a damaging worth action immediately is unbelievable tomorrow.And due to what I am arguing here about worth motion is very true, exiting a bad 4x commerce ever is nonsense!One of the best action to take with respect to shedding forex trade is to hedge that commerce by the use of an opposite. That hedged commerce instantly neutralises any and all additional injury to your bottomline and it offers you time to replicate on what you motion next.

Frequently when and if costs continue to go against the primary order – I then hedge again and it’s common that I will multiple-hedge a nasty trade five or ten occasions!Eg, assume I open a lot and it goes dangerous which I immediately hedge – and I normally hedge it on the price most fool merchants would have exited it with a cease loss concept. As the worth motion is now going loopy in favor of my hedge, every strong probability I get I’ll open additional hedges. Before I know it my bottomline equity is effectively in front of where I was with only the one trade, and certainly I am manner into income ahead of the sheep who would have used a Stop Loss setting.It was humorous watching the NFA as it tried to inflict its willpower on the retail forex dealer banning its member brokers from facilitating hedge trading. And what a fool the NFA made itself out to be – given that all professional and smart money simply took their business exterior of the USA. The effect the NFA had significantly broken the United States as a monetary heart; further confirming London as the house of most currency action.

Even those fx brokers with United States operations shortly migrated these client accounts who demanded hedge capabilities off-shore – end of story. Smart money demands hedge capacity. Idiots with stupid cash don’t hedge uses Stop Loss concept.This article is directed on the heart of one of the idiotic issues ever about trading. It is probably not rocket science individuals – nevertheless it seems sense just isn’t so common.