Learn More About Forex and Stock Market

Trading has a language of its own, and if you are starting out long or short,  bullish and bearish  are trading terms you will hear frequently. Bullish and Bearish are simply terms used to characterize trends in the currency, commodity or stock markets. The terms bullish and bearish are often used to describe the conditions in the market or the  sentiment of investors .  They are very important terms and are used in nearly all types of trading, from  currencies  to stocks.  Traders can take advantage of both  bullish and bearish markets  if they have sufficient knowledge of the market conditions that are associated with these cycles.  When traders understand the meaning of bearish and bullish and are able to identify the cycles, they will know how to profit off of any market condition. What is the difference between Bullish and Bearish Market? Bearish and  Bullish  are simply terms used to characterize trend...

Currencies of countries that rely heavily on the export of  commodities  are often referred to as  commodity currencies . An important factor that any  forex trader  should consider is that the value of commodity currencies usually rise and fall in tandem with the value of the country's main commodity exports. What Are Commodity Currencies and Pair: Both the value of the  commodity  and the country's trade balance, with respect to the commodity, are significant factors in the valuation of commodity currencies. The most commonly traded commodity currencies are: Canada (CAD) New Zealand (NZD) Australia (AUD) The three  commodity pairs  are: USD/CAD AUD/USD NZD/USD These  pairs  are highly correlated to  commodity  fluctuations in the world markets and are the most heavily traded  commodity pairs  in  forex .  Forex  traders often trade these  commodity pairs  to gain expos...

What is the need of Currency Exchange? There has never been a more challenging and exciting time to be trading in the  foreign exchange market . What started out as a market for professionals is now attracting traders from all over the world and of all experience levels.  The forex market  mainly exists because of the need to ease or facilitate currency exchange. There is a need to  exchange currencies  because one country’s currency is not accepted in another. Currencies are needed everywhere to facilitate trade of goods and services. How Currency Exchange Works? The forex market works just like the other financial markets.  Currencies  are sold and bought at the current rate. The price of a currency with respect to another currency is called the exchange rate. Since the U.S. dollar is the currency that dominates in financial markets,  exchange rates  are expressed mostly in US dollars. Except when the exchange rate is pegged or fix...

Participants of  Forex market  are divided into two groups by their activity and influence on exchange rates: Market Makers Market Users ( same as price takers ) Who are Market Movers? The notion of  market makers  involves large banks and financial institutions, which determine the current level of the  exchange rate  due to a significant proportion of their operations in the total world market.   Market makers set the current exchange rate by conducting  transactions  with each other, as well as with smaller banks, which are also market participants. Market makers set the exchange rates for the smaller banks, organizations and individuals. Market makers constantly monitor the rates of various trading tools (ex.  Forex currency pairs ) as they enter into the transactions with them. Market makers are market participants who provide the  liquidity  of certain instruments, exposing orders to buy or sell. Market m...

Traders can get conflicting views of a currency pair by examining different  time frames . While the daily might be showing an up-trend, the hourly can be showing a down-trend. It can be really confusing for beginning traders, which time frame to build strategy on? Perhaps the best way to explain this variation is that the time periods these commonly used terms refer to tend to depend on the usual time a position is held given the type of trading strategy that a trader employs. Some of the most common incremental time frames used by technical analysts when reviewing exchange rate movements for Forex currency pairs include the following: The one minute time frame The five minute time frame The fifteen minute time frame The thirty minute The one hour time frame The four hour or 240 minute timeframe: The one day or daily time frame The one week time frame The one month time frame The one year time frame Forex Time Frames by Trading Strategy Although trading time fr...

BASIC CURRENCY AND QUOTE CURRENCY A currency pair is the quotation of two different currencies, with the value of one currency being quoted against the other. The first listed currency of a currency pair is called the base currency, and the second currency is called the quote currency. Currency pairs compare the value of one currency to another — the base currency (or the first one) versus the second, or the quote currency. It indicates how much of the quote currency is needed to purchase one unit of the base currency. EXCHANGE RATE An exchange rate is the price of a nation’s currency in terms of another currency. Thus, an exchange rate has two components, the domestic currency and a foreign currency, and can be quoted either directly or indirectly. In a direct quotation , the price of a unit of foreign currency is expressed in terms of the domestic currency. In an indirect quotation , the price of a unit of domestic currency is express...

With  forex trading , the thrill of the chase when executing a series of trades can be intoxicating. However, it is important not to lose your shirt in the process. Even the best traders can go on multi-trade losing streaks that can last for weeks, only to recover later. If the same trader is using too much of their  trading capital  with each trade, they can be wiped out. This is where good  risk management  policies come into play to ensure that they can stay in the (trading) game long enough for future trades to recover earlier trading losses. You can't be 100 percent safe when trading forex. However, you can take steps to lower your exposure to large losses. Careful planning, execution and monitoring of trades will help you keep losses to a minimum without sacrificing profit potential. In order to trade safely you should have a successful  trading strategy . Forex traders use technical and fundamental analysis  of the  currency markets ...

You may have noticed that the value of  currencies  goes up and down every day. What most people don't realize is that there is a  foreign exchange market  - or 'Forex' for short - where you can potentially profit from the movement of these currencies. As technologies have improved,  the forex market  has become more accessible resulting in an unprecedented growth in  online trading . One of the great things about  trading currencies  now is that you no longer have to be a big money manager to trade this market; traders and investors like you can trade this market. Advantages of Trading Forex 24 Hours Trading The single biggest advantage the forex market has over other markets is its 24-hour nature. A  trader  can put on or take off positions literally any time of day or night, regardless of their base of operations. Consider, for example, the working person with a 9 to 5 type of job. Most folks like that cannot be expecte...