FOREXGEN

Why learning with ForexGen?

Forex is definitely one of the most exciting and profitable markets. If you want to join the elite and start investing you need to follow 5 very simple steps that will eventually lead you to success:



Self Study:
In order to start investing you need to study and observe the Forex market carefully so that you can make the right decisions when the time comes.
You can study the fundamental analysis to monitor the political and economic news’ effect on FX market. Also the study of technical analysis is useful as it predicts the price movement based on past experience.ForexGen offers a Training section developed specially for new traders. This section mainly contain comprehensive summarized documents teaching you how to deal with the Forex market and what procedures you need to follow in order to minimize the risk.

• Practice:
ForexGen’s Demo account gives you the chance to practice your Forex trading skills with absolutely no obligation on your side. You will also be able to learn how to virtually place market orders and stop-loss orders without risking a penny.

• Investment Strategy:
After gaining enough knowledge about the Forex market, you are ready to start putting a strategy for your investment. First thing you should do is make sure not to let your emotions get in the way of your strategy as it’s a common mistake made by new traders.
Secondly you need to make some decisions like how much you are willing to risk, if it’s worth risking, if the market is suitable for that kind of investment and finally you always have to be aware of the amount of money you are risking and if you have enough funds to maintain your margin.

• Observation:
Once you have started your investment, you are now capable of being automatically connected 24/7 throughout ForexGen’s new trailing stop software. Trailing stop allows you to control your balance 24 hours a day.

• Open your live account now:
Knowledge, practice, strategy and tools. You are definitely ready to start your investment by opening your first live account. Not like the demo account, you will now start committing real money. Just remember to stick to your strategy.

http://www.forexgen.com/

Different Types of Forex Orders with ForexGen

A trader has at his disposal different types of orders to make FOREX trades. A clear understanding of each type of order is necessary to be a successful FOREX trader.

Market Order – is an order to buy or sell at the current market price. They can be used to enter or exit a trade.

Market orders should be used with care because in fast-moving markets there may be a difference between the price seen at the time a market order is given and the actual price of the transaction. This is due to slippage – the amount the market moves in the few seconds between giving an order and having it executed. Slippage could result in a loss or gain of several pips.

Limit Order – is an order to buy or sell at a certain limit. They can be used to buy currency below the market price or sell currency above the market price. When buying, your order is executed when the market falls to your limit order price. When selling, your order is executed when the market rises to your limit order price. There is no slippage with limit orders.

Stop Order – is an order to buy above the market or to sell below the market. They are most commonly used as stop-loss orders to limit losses if the market moves contrary to what the trader expected. A stop-loss order will sell the currency if the market falls below the point set by the trader.

One Cancels the Other (OCO) – this order is used when placing a limit order and a stop-loss order at the same time. If either order is executed the other is cancelled, allowing the trader to make a transaction without monitoring the market. If the market falls, the stop-loss order will be executed, but if the market rises to the level of the limit order, the currency will be sold at a profit.

* Example OCO Transaction:

Buy: 1 standard lot EUR/USD @ 1.3228 = $132,280
Pip Value: 1 pip = $10
Stop-Loss: 1.3203
Limit: 1.3328

This is an order to buy US dollars at 1.3328 and to sell them if they fall to 1.3203 (resulting in a loss of 25 pips or $250) or to sell them if they rise to 1.3328 (resulting in a profit of 100 pips or $1,000).

* Here's another example:

The current bid/ask price for US dollars and Canadian dollars is

USD/CDN 1.2152/57

...meaning you can buy $1 US for 1.2152 CDN or sell 1.2157 CDN for $1 US.

If you think that the US dollar (USD) is undervalued against the Canadian dollar (CDN) you would buy USD (simultaneously selling CDN) and wait for the US dollar to rise.

This is the transaction: Buy USD: 1 standard lot USD/CDN @ 1.2157 = $121,570 CDN
Pip Value: 1 pip = $10
Stop-Loss: 1.2147
Margin: $1,000 (1%)

You are buying US$100,000 and selling CDN$121,570. Your stop loss order will be executed if the dollar falls below 1.2147, in which case you will lose $100.

However, USD/CDN rises to 1.2192/87. You can now sell $1 US for 1.2192 CDN or sell 1.2187 CDN for $1 US.

Because you entered the transaction by buying US dollars (buying long), you must now sell US dollars and buy back CDN dollars to realize your profit.
You sell US$100,000 at the current USD/CDN rate of 1.2192, and receive 121,920 CDN for which you originally paid CDN$121,570. Your profit is $350 Canadian dollars or US$287.19 (350 divided by the current exchange rate of 1.2187).

http://www.forexgen.com/

On Line ForexGen Broker

Exchange vs. Over-The-Counter Options
ForexGen options can be traded either on an exchange or in the over-the-counter (OTC) market, meaning between two parties.

Types of Transactions
Manufacturing companies who buy in raw materials from abroad and export finished products undertake both the purchase and sales of foreign exchange, as they are always dependent upon the supplying companies’ country of origin and its currency for their invoicing.

Margin Trading
Margin means borrowing money from a broker to buy a stock, or commodity, or currency pair and using the investment as collateral. It is, to all intents and purposes, a performance bond in cash or another means of security deposited by a trader.

Role of the Adviser
As the adviser is the primary contact between a market maker and a client, the adviser must demonstrate an overall understanding of the foreign exchange market in order to earn and maintain the trust of clients.

Barriers
This is a standard option that automatically cancels out if spot trades through a prearranged knock-out level. This level is set below the initial spot for a call option, and above spot for a put.

Reversals
Reversals are primarily a Floor Trader strategy used to capitalize on minor price discrepancies between calls and puts. As implied by its name, reversals are the exact opposites of conversions.

When Is a System Suitable for Automation?
While the average trader can make money using any given toolkit, there are some cases that are not well-suited for complete automation.

Making Mistakes
When trading in the ForEx market it is best to come to grips with the cold hard fact that only 5% of all traders achieve their ultimate goal of being consistent with their profits. The difference between that 5% and everyone else is that they learn from their mistakes and recognize them as learning experiences, not personal failures to be ignored and swept under the rug.

Successful and Unsuccessful Traders
Unsuccessful traders don't want to learn the charts, the signals, and other intricacies of the forex market, become prideful, believing that they deserve more profit, are therefore take unwise risks.
Successful traders painstakingly build outwardly simple systems that have taken years to perfect, wait for predictable signals that are obeyed without question, want to know everything about their broker and their broker's practices.

Currency Value
The value of a currency is always given in terms of another currency. For example, the value of a US dollar in terms of British pounds is the £/$ exchange rate, and the value of the Japanese yen in terms of dollar is the $/¥ exchange rate. Understanding this procedure is particularly useful when dealing with unusual currencies.

http://www.forexgen.com/

Reading Forex Quotes With ForexGen

Each world currency is given a three letter code which is used in FOREX quotes. The most common currencies are USD (US dollars), EUR (European euros), GBP (United Kingdom pounds), AUD (Australian dollars), JPY (Japanese yen), CHF (Swiss francs) and CAD (Canadian dollars).

Prices of foreign exchange are indicated by FX quotes in pairs of currencies. The first currency is the 'base' and the second is the 'quote' currency. In this example:

USD/EUR = 0.8320

...the currency pair is US dollars and European euros. The base currency (USD) is always at '1' and the quote currency shows how much it costs to buy one unit of the base currency. In this example, 1 US dollar costs 0.8320 euros.

Conversely...

EUR/USD = 1.1993

...tells us that it costs 1.1993 US dollars to buy 1 euro.

When the price of the quote currency goes up it indicates that the base currency is becoming stronger – one unit of the base currency will buy more of the quote currency. If the quote currency falls, however, the base currency is becoming weaker.

Foreign Exchange quotes are seen in 'bid' and 'ask' prices. Bid is the price that buyers will pay for the base currency (while selling the quote currency), and ask is the price that sellers will sell the base currency (while buying the quote currency).

Symbol


Bid


Ask

USD/CAD


1.2329


1.2379

This chart tells us that we can buy one American dollar for 1.2379 Canadian dollars, or sell one American dollar for 1.2329 Canadian dollars. The most commonly traded currencies pairs are the 'Majors' – GBP/USD, EUR/USD, AUD/USD, USD/JPY, USD/CHF, and USD/CAD.

We often see exchange rates listed in cross currency charts that list many different currencies and their values against each other. An example of such a chart is seen here:



US $


Ca $


Euro


UK £

US $


1.00000


1.24070


0.83953


0.56807

Ca $


0.80600


1.00000


0.67657


0.45841

Euro


1.19114


1.47805


1.00000


0.67755

UK £


1.7603


2.18147


1.47591


1.00000

In this chart, the currencies listed down the left side of the chart are the base currencies and the currencies at the top are the quote currencies. We can convert the chart above into currency pairs by following the row beside the base currency. Using US dollars as the base currency we get the following currency pairs:

USD/CAD = 1.24070
USD/EUR = 0.83953
USD/GBP = 0.56807

...which tells us that one US dollar is equal to the corresponding value of the quote currency. To find the opposite pair e.g. CAD/USD follow the Canadian dollar row to the US dollar column - CAD/USD = 0.80600 (one Canadian dollar is worth 0.80600 US dollars).

There is no standard for cross-currency charts – some have the base currency on the top and some have it on the side. How to tell which is which? You need to know at least one pair of currencies and which one of the pair is more valuable.

Currency prices are determined by a number of factors, the most important of which are economic and political conditions in the issuing country. Political stability, inflation, and interest rates are all factored into the price of any currency. In addition, governments can try to control the price of their currency by either flooding the market (to lower the price) or buying extensively (to raise the price).
Because of the immense volume of FOREX, however, it is impossible for one force to control the market for any length of time. Market forces will prevail in the long run, making FOREX one of the most open and fair investment opportunities available.

http://www.forexgen.com/

ForexGen Trading Strategies

To be a successful FOREX trader you need a trading strategy. There is no one set strategy that is good for all traders; rather, each trader needs to develop his or her individual approach to the FOREX. Some traders rely solely on technical analysis while others prefer fundamental analysis,

but many successful FOREX traders use a combination of both to get a broad overview of the market and for plotting entry and exit points.

Technical analysis relies on one key concept: Prices move by trends. The common saying in FOREX is 'The trend is your friend.' Market movements have identifiable patterns that have been studied over many years and a thorough understanding of these trends and how they can be read forms the basis of a good trading strategy.

There are many analytical tools available in ForexGen to understand market movements. The beginner FOREX trader is well advised to study each one separately for getting a working knowledge of their concepts and application. Once one has been understood, keep on using it while studying others. Each tool tends to reinforce the others.

Support and resistance levels are used in many FOREX trading strategies. 'Support' refers to the price level that is repeatedly seen as the bottom – when the price reaches this level it tends to rise. Resistance levels are upper prices that the currency rarely trades beyond. Support and resistance levels contain price movements for a period of time.

When currency prices break through support or resistance levels, the prices are expected to continue in that direction. For example, if the price rises above the previous resistance level, it is seen as bullish – the price should continue to rise.

To find support and resistance levels, price charts need to be analyzed for unbroken support and resistance levels. Charts can be analyzed in any time frame; however longer time frames establish more important support/resistance levels. Traders can use support/resistance levels to determine when to enter or exit a transaction.

Moving averages are another common tool in FOREX strategies. The simple moving average (SMA) shows the average price in a given period of time over a specified period of time. Moving averages serve to eliminate short term price fluctuations giving a clearer picture of price movements. FOREX traders can plot a SMA to determine when prices have a tendency to rise or fall. If prices cross above the SMA they have a tendency to keep on rising. Conversely, prices below the SMA have a tendency to continue their downward motion.

These are two examples of trading strategies that can be used individually or in combination. In practice, the FOREX trader should have a repertoire of trading tools to examine market conditions and to support the findings of one study or another. If several indicators show that the market is moving in a particular direction the trader can act with more assurance than when relying on a single indicator.

Similarly, fundamental analysis can be used to reinforce technical findings, or vice versa. Ideally, the FOREX trader will take several indicators into account when plotting a trading strategy.

Every trading strategy should provide clear guidelines about when to enter a trade, what to expect in terms of market movement, when to exit a trade, and how much loss can be accepted in case the deal moves against the trader. Following these simple guidelines and learning about technical analysis can help you become a successful FOREX trader.

One of the best online FOREX trading strategy courses is offered by professional experts in ForexGen. They are an authority in currency trading education and demonstrates simple yet powerful currency trading strategies used by banks, financial institutions and professional Forex traders.

http://www.forexgen.com/