Learning Trade Forex

• Arbitrage - The simultaneous purchase and sale of an instrument in two different markets to profit from a temporary price disparity.
• Ask Price – Sometimes called the Offer Price, this is the market price for traders to buy currencies.
• Aussie - Nickname for the Australian dollar.

• Bank Rate - The rate at which a countries central bank lends money to commercial banks.
• Base Currency - The first currency quoted in a currency pair. EG. Eur/Usd the euro is the base currency.
• Bar Chart – A type of chart used in Technical Analysis.
• Bearish - An opinion or expectation the the price of a currency will fall relative to another.
• Bid Price – is the price a trader can sell currencies.
• Bid/Ask Spread – is the difference between the bid price and the ask price in any currency quotation. The spread represents the broker's fee, and varies from broker to broker.
• Broker - A Company or individual individual who accepts buy and sell orders in return for a commission.
• Buck - Nick name used for the American dollar.
• Bullish - An opinion or expectation that the price of a currency will rise relative to another.

• Cable - A market term used for the British Pound Sterling.
• Candlestick Chart - A type of chart used in Technical Analysis.
• Carry Trade - A trader holds a open trading position with a positive overnight interest rate indefinitely in order to benefit from the interest differential between the 2 currencies.
• CPI- Consumer Price Index A statistical measure of inflation recording price changes based on a specific basket of goods.
• Cross Currency – A currency pair that does not include US dollars – e.g. EUR/GBP.
• Currency Pair – Two currencies involved in any FOREX transaction – e.g. EUR/USD.

• ECB - (European Central Bank) The regulatory bank for the European Union Nations.
• ECN Broker - A Forex Brokerage firm that provides its clients direct access to other forex market participants.
• Economic Calander – A statistical report issued by governments or academic institutions indicating current economic conditions within a country.
• Euro - The common currency of the member nations of the European Union.
• Exotic Currency - A currency with little liquidity and limited dealing, which is neither a major or minor currency.

• Fed - (Federal Reserve) Regulatory body of the American Financial system.
• Fiber - Nickname for the Euro Currency.
• Flat - All trading positions closed.
• FOMC - Federal open Market Committee. Responsible for interest rate decisions made in America.
• Foreign Exchange (FOREX, FX) – Simultaneously buying one currency and selling another.
• Fundamental Analysis – Analysis of political and economic conditions that can affect currency prices.
• Fundamental Announcement - Economic news announced by countries to measure the health of the economy of that country.

• GTC - ( Good till cancelled) A forward order placed to buy or sell a currency that remains in force until cancelled.

• Hedging - Used to maintain a market position by entering a trade in the opposite direction on the same currency pair.

• Indicator - An analysis tool used to predict future price movement.
• Initial Margin - The initial amount of capital deposited with your broker to trade forex.

• Japanese Yen - The official currency of Japan

• Kiwi - Nickname for the New Zealand dollar.

• Leverage - The use of borrowed capital to improve the speculative capacity and rate of return from an investment.
• Liquidity - The measure of the currencies relationship between price change and trading volume.
• Libor - London Interbank Offered Rate. This is the rate at which banks will lend to each other, set at 11:00 a.m. London time.
• Limit Order – A forward order placed to buy below the current market price or sell above the current market price.
• Long - Buy the base currency.
• Lot – This is the minimum amount we can buy or sell at a time when entering a forex trade. Standard lots are worth about 100,000 US dollars.

• Major Currency - The Euro, Swiss franc, British pound, United States $ and Japanese yen.
• Margin Account - The account in which the traders funds are placed in order to facilitate trading.
• Margin Call - Is a demand by a broker to deposit additional funds to maintain trading positions currently held by the trader. (In Forex trading when minimum margin limits are exceeded the broker will close all positions to avoid having the trader owe the broker money that the broker might never recover.
• Market Maker - A trading platform that consistently provides two way prices, providing both a bid and an offer.
• Market Order - An order to buy or sell at the current market price.
• Market Price - The current price of the currency.
• Micro account - A forex trading account that requires an absolute minimum amount of capital investment to start trading with.
• Mini Account - A forex trading account that requires less capital than the standard account account to start trading with.
• Minor Currency - The Canadian dollar, the Australian dollar, and the kiwi are minor currencies.

• Offer (Ask) - The price you buy at.
• One Cancels the Other (OCO) – Two orders placed simultaneously with instructions to cancel the second order on execution of the first.
• Open Position – An active trade that has not been closed.
• Overnight interest - An amount of interest paid or earned, depending on the interest rate differential between the 2 currencies traded, when holding trades overnight.

• Pip – (Price Interest Point) The smallest unit a currency can be traded in.(also referred to as a point)

• Quote Currency – The second currency in a currency pair. In the currency pair EUR?USD the USD is the quote currency.

• Rollover – Extending the settlement time of spot deals to the current delivery date. The cost of rollover is calculated using swap points based on interest rate differentials.

• Stop Loss - A forward order placed to limit losses on a trade.
• Stop order - A forward order place to buy a currency above the current price or sell below the current price.

• Technical Analysis – Analysis of historical market data to predict future movements in the market.

• Trend - Current, Long Term trend or direction of the market for a specific currency.
• Tick – The minimum change in price.
• Transaction Cost – The cost of a FOREX transaction – typically the spread between bid and ask prices.

• Unrealised Profit/Loss - The value of all open trading positions.
• Usable Margin - The amount of capital available in your trading account that is available to open new positions.
• Used Margin - The amount of capital in your trading account that has been used to hold your open positions.

• Volatility – A statistical measure indicating the tendency of sharp price movements within a period of time.

• Whipsaw - Price volatility, especially after major fundamental announcements, causing price to first go one way then reverse and go in the opposite direction.

The MACD Developed by Gerald Appel, Moving Average Convergence/Divergence (MACD) is one of the simpler, more reliable indicators available. The MACD uses moving averages, which are momentum indicators and therefore lagging indicators that include trend-following characteristics. Our main priority in trading is to find the trend and trade with it, because that is where the most money is made.

There are 3 figures used to calculate a MACD

The first is a fast moving average. The second is a slower moving average. The third calculation is represented by bars and is the difference between the faster and slower moving averages.
For example, a standard MACD setting on most charting packages is (12,26,9) We interpret them as follows.

12 Represents the previous 12 bars or candles of our faster moving average.
26 Represents the previous 26 bars or candles of our Slower moving average.
9 Represents the previous 9 bars of the difference between the two moving averages. This is shown as vertical lines (Blue on Chart)called a histogram.

I am not going to try and describe the maths for the exact calculation as your charting package does it automatically for you. Suffice to say, these lagging indicators become a momentum oscillator when the longer moving average is subtracted from the shorter moving average. This results in a line that oscillates above and below zero, without any upper or lower limits. Theoretically we buy above the zero line and sell below the zero line. The histogram is bullish when MACD is above its 9 bar MA and Bearish when it is below its 9 bar MA. When the bars start to get longer on the histogram we call this divergence (diverging away from the MA). As the bars get shorter we call this convergence, (converging towards the MA) As the momentum of price increases or decreases the histogram bars grow longer or shorter. (MACD)

Trading the MACD.
When the faster MA crosses the slower MA and the histogram bars form above or below the zero line it often indicates the start of a new trend as the faster MA diverges away from the slower MA.
As we can see from the above 1hr usdchf chart the bars started to converge from the bearish position below the zero line until they crossed the Zero line signalling a possible entry to go long.

Because the MACD is made up of moving averages of other moving averages, further smoothed by another moving average there is generally a fair amount of lag in signalling the new trend. We see from the above chart that price had rallied almost 100 pips from the low before the MACD confirmed the trend change.

On the next chart above I have added faster period MA's 5, 13, 8, to the MACD settings. The first vertical red line shows the Zero cross about 50 pips earlier than the 12, 26, 9, setting. Once again we have a trade off between more sensitive earlier entries with possible false signals and less sensitive later entries with the possibility of missing the trade completely or getting caught going the wrong way because of the greater lag.

Only by back testing and playing with the settings for your time frame can you find a MACD that you are comfortable trading.

As we can see from the next chart price had dropped 100 pips before the 5, 13, 8 MACD with the faster settings signalled a possible short below the Zero line only to have a reversal and get caught going the wrong way.

The slower MACD did not cross below Zero, neither did it confirm the down move. In the first instance the earlier entry on the faster MACD would have made us a larger profit but the second trade we would have lost the extra we made by entering the market in the wrong direction. Using other indicators in conjunction with our MACD can help with confirming our entries and avoiding false signals. The MACD However remains a firm favourite with many traders.

The MACD is also commonly used to identify divergence in the market which we will look at later.

Summary

• The MACD is calculated using 3 different moving averages.
• The MACD is a lagging indicator.
• The MACD is a trend indicator mainly used to enter the market.

Common Indicators
An Indicator is any tool that we use to help us predict future market trends.
Indicators can be categorised according to the type of prediction they make.

Leading indicators are oscillators that predict future trends and are designed to give traders the earliest possible warning of a trend change.

Lagging indicators are momentum indicators that follow events. They only signal new trends once they have occurred. Their importance though is to confirm the new trend is established or being established.

Coincident indicators occur at the same time as the trend change or trend continuation and are generally associated with fundamental announcements.

Much like support, resistance and trend lines, indicators not only provide entry and exit points for trades they also act as support and resistance areas.

In today’s electronic trading era there are literally thousands of indicators available. It would be impossible to look at all of them so we will concentrate on some of the more commonly used indicators.

Moving Averages
A moving average is a momentum indicator. It smooths out price over a fixed period of time. “Moving Average” means we are taking the average Closing, Opening, and High or Low price of a currency over a predetermined time period. As each time period ends it drops off the earliest data used and incorporates the latest data which is divided by the number of periods used to give us the average for the number of periods used.

IE a 14 period (Close) sma(simple moving average) on a 1hr chart adds the last 14 candles closing prices and divides them by 14 to give us an average price. When candle 15 opens then candle 1 is dropped off and the last 14 candles are counted giving us our moving average.



On the above chart 3 different sma's have been added 8, 21 and 55. The red 8, is the fastest and the green 55 is the slowest. The faster red would normally signal the direction change first then the blue 21 and last the green 55. The 2 slower sma's are also further from the current price than the faster sma.

We use moving averages to determine the direction of a trend and to smooth out small price fluctuations or "Noise" that might otherwise confuse our interpretation. The slope of the moving average, can alert us as to the general direction the future price will go.

There are different types of moving averages, and each of them has their own level of sensitivity or “smoothness”. Generally, the smoother the moving average, the less sensitive it is to change and the longer it takes to react to the price movement. The faster the moving average, the more sensitive it is to change and quicker it is to react to the price movement.

Moving averages can be shown as a single line on a chart or as a number of lines all with different values or settings. The combinations are limitless and the idea is to find a moving average or combination of moving averages that works well for you.

Simple Moving Average


If we look at the above 1 Hour GBPUSD chart using a 14 period SMA (simple moving average) We see the candles on the left of the chart are all below the 14 SMA. Around the mid point the sma line acts as resistance and price continues to drop. As long as the candles are opening and closing below the SMA we stay short in the market.


The above chart shows 2 crosses of the 14 sma line indicating 2 potential trading opportunities.

On the next chart we will add a 21 (red line) period SMA. Notice when the faster 14 (Blue) SMA crosses the slower 21 SMA we have a new trading opportunity to Sell GBPUSD when the first candle opens Below the faster Red 14 SMA. Notice also how the sma lines act as resistance most of the way down.

The same can be done with the High, Low or Open price of the last 14 candles. This is the simplest of moving averages. Again you need to play around with the combinations to find which one suits your trading style.

The longer the MA period the less sensitive it is to price change and the smoother the moving average line is, causing it to lag further behind the market. We therefore don't want too short a MA as it will give us too many false signals with every little change in the market. We also don't want too long a MA period as by the time it signals our entry the run could be over.

The MA gives us a broader view of the market not just the current view. This enables us to make a general determination of the future price for the time period we are trading.

Exponential Moving Averages
EMA's (exponential moving averages) place more weight on recent data and less weight on past data using the same number of candles or bars to calculate the moving average. By responding faster to change in price ema's are more reactive than sma's.

Sometimes sma's can signal false breaks because they are more prone to spikes in the market. Ema's can help to filter out these spikes because they place less emphasis on the older data. As traders we are interested in the more recent prices than the older prices.


On the above daily chart we have used 2 moving average lines, a 21 sma and a 21 ema. The red 21 ema responded first to the trend change . The entry on the red ema confirmed the long at 1.3550 it was already pointing in an upward direction, whilst the entry on the blue sma only confirmed the buy at 1.3666 when the first candle opened above the 21 sma and took a further 1o days to turn up.

The entry on the ema would have required a small stop compared large stop on the sma. The entry difference was 116 pips resulting in a huge difference in the profit potential between the 2 entries.

Whilst the difference may be negligible on a shorter time frame, trading the longer term trend makes a significant difference. As with all technical indicators none can guarantee success and are best used in conjunction with a support indicator.

There are advantages and disadvantages to using both sma's and ema's.

A short period EMA will respond quickly to price change which will help you catch trends early, resulting in larger profits. The disadvantage is you can get false signals. Because of the quick response the short period ema may interpret a spike or small retracement as a trend reversal causing you to enter the market in the wrong direction.

If we want to avoid the false signals then a longer period sma that is less sensitive to price change with smoother lines might be the best way to go. The downside is that it might take too long to recognise the trend change, causing you to miss good trading opportunities resulting in less profits.

There is a definite trade off between the two moving average types, earlier entries with more whipsaw or later entries with less profits and the possibility of entering the trade too late or missing the trade completely.

There are many trading systems designed around moving averages and only by back testing various periods, time frames and types of moving averages will you find a system that works well for you.

You might try ma cross overs or combining ema's and sma's. You can also try using combinations of high and low or opening and closing prices the permutations are endless.

Summary

• Moving averages help us identify trends across different time frames.
• Moving averages are momentum indicators that smooth out price and lag current movement.
• There are many types of moving averages, sma's and ema's are the 2 most common.
• Simple moving averages are prone to price spikes.
• Exponential ma's place more weight on recent prices showing us what traders are doing now.
• Simple moving averages are smoother than exponential moving averages.
• The longer the moving average period the slower it is to respond to change.
• The shorter the moving average period the quicker the response to change.
• The basis for moving avaerage trading is enter long when price crosses above the ma or short when it crosses below the ma.
• We should find a ma trade off that reduces whipsaw, but minimises the lateness of entries.
• Back test your ma's to find the appropriate combination.

It seems that there is a behaviour in all of us. If we do not understand, we will study it. Thats how knowledge begins. We study in order to understand things that are unclear and unknown to us but what happen when we started to understand it?

Once we know how something works, we will not see it as a challenge. For those people that love challenge, they will lose interest. This is because it is no longer something to go after. You already have the answers and started looking somewhere else for new challenges. In the end such people will not accumulate wealth but he will gain knowledge. Knowledge in the end is what matters.

Last week I lose in Forex trading. I will update screenshot when I have the time. It seems to me that I am starting to lose interest in Forex for the above reason. For other reason I will not be trading forex till start of next year. Holiday season is coming, Im going home for a long vacation and forex has started to lose it appeal.

Those of you still struggling to understand it, keep up the work. Its a feeling undescribe by mere words once you have found the answer. At the time of writing we are seeing major turn on 3 pairs which are EurUsd, UsdChf and UsdJpy. Chrismast is coming and it would be a waste of time to trade now. Let us hope a new year wil bring new fortune to us all. Happy holidays everyone.

Bayangkan kalau anda mendapat income sebegini dibayar setiap minggu. Amacam? tak melompat cam beruk ke?

Isinya berbunyi begini:

Kalau saya jadi airmata,
Saya ingin lahir dari matamu, hidup dipipi mu dan mati di bibirmu
tapi kalau awak jadi airmata,saya tidak akan menangis
kerana saya tidak mahu kehilanganmu

begitu bermakna dari seseorang yang tidak dikenali.

Forex lak. minggu ni rugi. Nasib baik bisness lain masyuk banyak :)

Trends and Trend Lines
Trend lines seem to be the forgotten trading indicator. Many traders under estimate the importance of using trend lines to predict significant price moves and reversals. Many traders also do not know how to correctly draw trend lines.

We draw trend lines to determine a specific trend, its strength and try to establish potential reversals. The old adage "the trend is your friend" is all to often only remembered once the horse has bolted and we have been stopped out at a loss doing a counter trend trade.

The market can only go three ways up! down! or sideways.


Now that we have established that the market can only go up down or sideways. Let’s investigate a trend and what causes the market to trend in a particular direction.



TYPICAL UP TREND
The Market is in an uptrend when it is making higher highs and higher lows. Look at the typical up trend chart. You will notice the market is making higher highs and higher Lows. Like walking up a flight of steps. What constitutes a high in the market? (see support and resistance) The rule of thumb is when the high candle has 2 lower candles on its left and 2 lower candles on its right.

TYPICAL DOWN TREND

The Market is in a downtrend when it is making lower highs and lower lows. Look at the typical downtrend chart. You will notice the market is making lower highs and lower lows. Like walking down a flight of steps. What constitutes a low in the market? The rule of thumb is when the low candle has 2 higher candles on its left and 2 higher candles on its right.

SIDEWAYS TREND


Sideways movement is when the market runs out of steam and consolidates at a particular point before continuing with the trend or moving in the opposite direction. We need to identify periods of consolidation and avoid trading them if the range is very small. Rather position yourself to take advantage of the breakout when it occurs.

Volume is what makes the price move. The higher the volume of buyer’s or seller’s at a particular moment the more the price will move in that direction. Some of factors that cause volumes to change are technical traders that open or close trades because their perception is the chart pattern indicates such action is warranted. Fundamental traders watch the news, read the papers and listen to analysts predictions, forming an opinion as to the future price movement of a particular market. The more traders who share a particular perception or opinion the larger the change in volume is likely to be.

It is these changing opinions of traders that cause the prices in the market to fluctuate. As these prices fluctuate new support and resistance levels are tested all the time until enough like minded traders share the same opinion and cause the market to move in a new direction.

Once price has moved sufficiently in a particular direction we call this a trend. The aim is to identify the trend as soon as possible and enter the trade in the direction of the trend. Volumes will probably peak by the halfway mark and continue to reduce, causing the trend to slow and lose its momentum resulting in the trend coming to an end. Quite frequently volumes will increase right at the end of the trend.

The trend comes to an end when traders start to take profits, others close on stop losses because they can no longer sustain losses, still others only then realise that the market was trending in a direction and enter right at the end of the trend. Some traders will be opening positions in the opposite direction assuming the trend had come to an end. All this leads to an increase in volume and then consolidation before the market continues in the same direction or reverses.

As with support and resistance we can wait for a breakout candle to open clear of the trend line. Once we have the breakout candle we can wait for the confirmation candle to open or close above or below the breakout candle before entering the trade. (see next chart)

• Place your trend lines on your charts every day. (They can alert you early of an impending reversal.)


• Trade with the trend. Use your trend lines to determine the various trends and rather trade with the trend. Don't try to guess tops and bottoms for reversals.


• Draw in your channel lines. Channel line not only give you a clear picture of the current trend, they also provide you with entry points, profit points and stop loss levels.


• Used in conjunction with other indicators they are very powerful tools.
  

Here goes. What ever you do. Remember to put SL. SL is based on your guts. No guts no glory. Too much guts you will be dead.

Long Eur/Usd @ 1.4620 or better
TP 1.4870

Short Usd/Chf @ 1.1320 or better
TP 1.1060

At the moment all jpy pair is at the height of its momentum. Entry is not adviseable. Wait for it to turn then a fresh entry will be available. I lost much on JPY pair this week due to miss calculation. At the moment my account is down by more than 2k. I will post result at the end of the week.

Mixed week so far. GBP rate cut really messed things up. Things are really looking good for a Gbp correction where the rate cut made the correction very small and no clear market direction.

At the moment i am holding a lot of losing position hoping the market will turn back. At the same time doing hedging to cover the losing position. Hopefully next week all goes well and I manage to recover. If things do not go my way, then I will have to accept losses. Losses happen in forex and it happen a lot. Prepare for the inevitable.

Support and Resistance
Support and resistance is one of the most widely used tools in trading. We monitor highs and lows because when a price gets near a previous high or low, the market will try to create a new high or low in the market.

Many traders do not understand the significance of the last relative highs and lows. Not all highs and lows are support and resistance.
High = A high candle with 2 lower candles to its left and 2 lower candles to its right.
Low = A low candle with 2 higher candles to its left and two higher candles to its right.
Market High (Resistance) Market Low (Support)

As we can see from the above diagram the length shape and colour of the candles make no difference provided there are 2 candles to the left and 2 candles to the right of the respective highs and lows.


Resistance = sequential highs on a chart reading from left to right. This is where there are likely to be more sell orders than buy orders. Resistance is a price where selling is strong enough to interrupt and reverse an up trend. When an uptrend hits a ceiling of resistance it is like a rubber ball that’s hits an object and bounces back off it.

Support = sequential Lows on a chart reading from Right to left. This is where there are likely to be more buy orders than sell orders. Support is a price where buying is strong enough to interrupt and reverse a down trend. When a down trend hits a floor of support it is like a rubber ball that’s hits an object and bounces back off it.

In trading there is a constant “Financial war going on between the Bulls (buyers) and the bears (sellers)” The bulls want the prices to go up and the bears want the prices to come down.

Bulls are always trying to achieve new highs and bears are trying to achieve new lows. When the bulls are in control they are always trying to take the prices to new highs. When the bears are in control they are always trying to take the prices to new lows.


The Support and resistance lines have been filled in on the above 4 hr GBP/USD Chart. I have colour coded the various support and resistance areas where the price reversed at a previous support or resistance line. Click to enlarge the chart and you will see that on almost every occasion price tested those lines on two or more occasions.

Many traders place their stop losses above or below the previous support and resistance levels. When chasing profits traders move stop losses to the next high or low in the market to lock in profits. This causes a build up of orders at these levels often causing price to stop and reverse direction.

The longer a support or resistance area holds, determined by the period of time or the number of bounces or hits the stronger or more impenetrable it tends to be. Remember too that support or resistance are not exact numbers but areas on a chart where price is likely to reverse.

By regularly placing our support and resistance lines on the charts we will soon learn to identify the minor and major support and resistance. By regularly placing our support and resistance lines we will always be aware of areas where there is likely to be a reversal.


Support becomes Resisstance and Resistance becomes Support.
Often when price breaks short through an area of support it retraces and retests that same area which then becomes resistance. The same is true that when price breaks long through a resistance area it retests that same area which has now become support. By clicking on the above chart we can identify a number of areas where previous support areas become resistance. In almost each case the resistance held and price continued to fall.

Trading Support and Resistance.
Many traders use support and resistance to identify new trading opportunities. When price breaks through a support or resistance area it often goes to the next support or resistance area.

These support and resistance areas offer not only an entry point but also a stop loss area and a target area. This makes it easy to calculate our risk to reward ratio.

How do we know if a Support or Resistance area has been broken?

As Price often breaks through a support or resistance line then retraces and continues in the opposite direction it is not always easy to identify early on whether price support or resistance has been broken. One way is to wait for a breakout candle which must open clear of our support or resistance area. Some traders still wait for a confirmation candle which must surpass the high or low of the breakout candle. Often the breakout is accompanied by increased volumes and waiting for a further confirmation candle could be too late and almost at the end of the run.

The above chart shows breakout candles and entry points. The same criteria can be used for a bounce off a support or resistance area.

Conclusion

• Plot your support and resistance area daily, they will help you determine the likely moves for the day.
• Support and resistance areas can help identify entry points for trades.
• They can also help with money management in determining Risk to reward ratios for trades.
• They can also help to identify stop loss and profit target areas for trades.

Forex telah digembar gemburkan sebagai satu jalan utk kehidupan mewah. Ianya kelihatan begitu anggun seperti sesuatu yang mudah dan jelas. Hakikatnya ianya tidak begitu.

Jangan sekali kali menganggap Forex adalah jalan utk mencapai kekayaan. Ianya mampu memberi pendapatan yang lumayan tetapi tidak utk mencapai kekayaan. Fakta, 10 manusia terkaya didunia tidak seorang pun dari mereka mencapai tahap kekayaan dengan forex. Malah kalau ada yang rajin, boleh kaji 100 orang terkaya didunia dan berapa ramai dari mereka kaya dengan Forex. Jawapan mungkin tidak ada seorang pun mencapai kekayaan dengan forex.

Ini kerana dalam forex langit tidak selalu cerah tapi malangnya laut sentiasa bergelora. Cabaran yang tinggi perlu dihadapi sebelum seseorang boleh hidup dilautan forex.

Nasihat ini telah banyak kali aku berikan kepada orang yang memerlukan. Kalau ingin jadi kaya, kita perlu mempunyai berbagai sumber pendapatan. Periuk nasi perlu ada lebih dari satu. Barulah boleh mencapai kekayaan, itupun kalau kekayaan yang diharapkan.

Secara ikhlasnya aku bermula dengan forex bukan kerana duit tapi kerana ilmu. Dalam dunia cuma 5% saja manusia mampu hidup sepenuhnya dengan trading forex. Kalau aku mampu tergolong dalam umat manusia 5% itu, maka aku akan jadi golongan manusia terbilang. Mudah saja cita cita aku.

Last week I just traded for only one day. Then Im off to Tawau for a holiday. My one and only trading day last week ended up in profit. This week I started trading today. Hopefully by end of this week I can post another trading result.

At the moment EU is looking good for a big dive. GJ is currently doing a correction before it continue its dive hopefully.

Good trading for all of you out there since today is a good day for me coz I am in profit now :D

Forex Order Types

In order to buy or sell a currency an order needs to be placed on the dealing software. Whilst orders may differ from broker to broker or among the various trading platforms many are common to all.

Market order
This is an order to buy or sell at the current price. Buy(long) orders are always entered on the Ask price and exited on the Bid Price. Market orders are generally executed instantly at the price you see on the screen. If you are trading in a fast moving market though you might get a requote message, meaning that price has moved from the price you tried to execute at. To avoid this we can use different types of orders to enter the market. Market orders can also be placed by phone.

Limit orders
A limit order is placed to buy or sell at a specific price. A limit order can be used to buy a currency below the current market price, or sell a currency above the current market price. Limit orders can also have a time factor or expiry date attached like GTC good till cancelled or GFD (Good for the day)These will differ from platform to platform. Example: EURUSD current market price 1.4635 Buy at 1.4615 or sell at 1.4675. Limit orders can also be placed via the phone.

Limit orders are also used to set your profit limits on a trade. Example: Buy EURUSD at current market price 1.4635 profit limit 1.4675. When price reaches 1.4675 the trade is automatically closed out in profit provided the profit limit is set prior to price reaching the predetermined figure. Sell EURUSD at 1.4635 profit limit 1.4600.

Stop orders
A stop order is placed to buy or sell at a specific price. Stop orders are used to buy above the current market price or sell below the current market price. Stop orders also have a time factor or expiry date attached like GTC (good till cancelled) or GFD (good for the day)Example: Current EURUSD price 1.4635 Buy at 1.4675 or sell at 1.4635. Stop orders can also be place vial the phone.

Stop Loss.
This is an order place to protect yourself against losing more than you planned for. Example: Buy EURUSD at 1.4635 place stop loss at 1.4600. Should the price come down instead of going up as planned then the stop loss will ensure you lose only 35 pips. Sell EURUSD at 1.4635 place stop loss at 1.4665 Again the maximum loss should only be 30 pips should price not go your way.

Trailing stop loss.
A trailing stop loss is used to lock in profits and prevent profitable trades becoming losing trades should the market retrace suddenly. Example Buy EURUSD at 1.4635, set profit target at 1.4750. Set stop loss at 1.4600. Set trailing stop at 25 pips. When the trade is up 26 pips the stop loss will automatically be move from 1.4600 to the entry price at 1.4635. Assume the price only gets up to 1.4645 and reverses the new stop loss will be at 1.4620 and will close the trade 25 pips below the high price.


OCO
One cancels the other is a combination of 2 limit or stop orders. When one order is executed the other is automatically cancelled. With this order a trade can then buy above resistance or sell below support.

Summary

Whilst there might be many other different order types specific to individual brokers or trading platforms these are the main order types used by most brokers or trading platforms.

Each buy order should have 2 sell orders.
Entry = Buy regardless of order type.
Exit = Sell for profit (limit order)
Exit = Sell for loss (Stop loss)

Each sell order should have 2 buy orders.
Entry = Sell regardless of order type.
Exit = Buy for profit.
Exit = Buy for loss.

Be sure to check your brokers policy on orders as often times orders are not guaranteed. When fundamental announcements come out many brokers consider all orders to be market orders. These orders are not filled at the specified price but rather at a price higher or lower than expected. This can cause you to take bigger losses than planned. They can also put you in the market at prices higher or lower than your order stipulated. Many also increase their spread causing stop losses to be triggered at non market related prices. Ensure therefore you fully understand your brokers order policy.