To BUY or SELL under Markertive Panel Platform you just Click at your desire currencies pair under BID (To SELL) or OFFER(To Buy) column then another pop-up window as below appeared










Complete the form by fill in quantity, exit Stop-Loss, Choose your Desk either Live or Virtual and Exit Target --Click O.K , Done.
Note:
Exit Stop-Loss and Exit Target you can edit later if you leave it blank.

The Best Trading Platform For Beginner.

The best Trading Platform for the very beginner is Marketiva because:
1) Upon sign up you get $10,000 as virtual trading and $5 Real Trading free.
2) The panel Platform easy to use.
3) Easy to manage account - Transfer from E-Gold.
4) Technical Tools easy to retrieve and use.
5) To buy and sell no problem at all.
So what are U waiting for, start trading now because you lose nothing. If you are lucky probably you can turn $5 to $10,000 after 1,2,3,4...6 month or a year later.

Economic Indicators 101

Those trading in the foreign-exchange market (forex) rely on the same two basic forms of analysis that are used in the stock market: fundamental analysis and technical analysis. The uses of technical analysis in forex are much the same: price is assumed to reflect all news, and the charts are the objects of analysis. But unlike companies, countries have no balance sheets, so how can fundamental analysis be conducted on a currency?


Since fundamental analysis is about looking at the intrinsic value of an investment, its application in forex entails looking at the economic conditions that affect the valuation of a nation's currency. Here we look at some of the major fundamental factors that play a role in the movement of a currency.

Economic Indicators
Economic indicators are reports released by the government or a private organization that detail a country's economic performance. Economic reports are the means by which a country's economic health is directly measured, but do remember that a great deal of factors and policies will affect a nation's economic performance.

These reports are released at scheduled times, providing the market with an indication of whether a nation's economy has improved or declined. The effects of these reports are comparable to how earnings reports, SEC filings and other releases may affect securities. In forex, as in the stock market, any deviation from the norm can cause large price and volume movements.

You may recognize some of these economic reports, such as the unemployment numbers, which are well publicized. Others, like housing stats, receive little coverage. However, each indicator serves a particular purpose, and can be useful. Here we outline four major reports, some of which are comparable to particular fundamental indicators used by equity investors: The Gross Domestic Product (GDP)
The GDP is considered the broadest measure of a country's economy, and it represents the total market value of all goods and services produced in a country during a given year. Since the GDP figure itself is often considered a lagging indicator, most traders focus on the two reports that are issued in the months before the final GDP figures: the advance report and the preliminary report. Significant revisions between these reports can cause considerable volatility. The GDP is somewhat analogous to the gross profit margin of a publicly traded company in that they are both measures of internal growth.

Retail Sales
The retail-sales report measures the total receipts of all retail stores in a given country. This measurement is derived from a diverse sample of retail stores throughout a nation. The report is particularly useful because it is a timely indicator of broad consumer spending patterns that is adjusted for seasonal variables. It can be used to predict the performance of more important lagging indicators, and to assess the immediate direction of an economy. Revisions to advanced reports of retail sales can cause significant volatility. The retail sales report can be compared to the sales activity of a publicly traded company.

Industrial Production
This report shows the change in the production of factories, mines and utilities within a nation. It also reports their 'capacity utilizations', the degree to which the capacity of each of these factories is being used. It is ideal for a nation to see an increase of production while being at its maximum or near maximum capacity utilization.

Traders using this indicator are usually concerned with utility production, which can be extremely volatile since the utilities industry, and in turn the trading of and demand for energy, is heavily affected by changes in weather. Significant revisions between reports can be caused by weather changes, which in turn, can cause volatility in the nation's currency.

Consumer Price Index (CPI)
The CPI is a measure of the change in the prices of consumer goods across over 200 different categories. This report, when compared to a nation's exports, can be used to see if a country is making or losing money on its products and services. Be careful, however, to monitor the exports - it is a focus that is popular with many traders because the prices of exports often change relative to a currency's strength or weakness.
Some of the other major indicators include the purchasing managers index (PMI), producer price index (PPI), durable goods report, employment cost index (ECI), and housing starts. And don't forget the many privately issued reports, the most famous of which is the Michigan Consumer Confidence Survey. All of these provide a valuable resource to traders, if used properly.

So, How Are These Used?
Since economic indicators gauge a country's economic state, changes in the conditions reported will therefore directly affect the price and volume of a country's currency. It is important to keep in mind, however, that the indicators discussed above are not the only things that affect a currency's price. There are third-party reports, technical factors, and many other things that also can drastically affect a currency's valuation. Here are a few useful tips that may help you when conducting fundamental analysis in the foreign exchange market: The Gross Domestic Product (GDP)
The GDP is considered the broadest measure of a country's economy, and it represents the total market value of all goods and services produced in a country during a given year. Since the GDP figure itself is often considered a lagging indicator, most traders focus on the two reports that are issued in the months before the final GDP figures: the advance report and the preliminary report. Significant revisions between these reports can cause considerable volatility. The GDP is somewhat analogous to the gross profit margin of a publicly traded company in that they are both measures of internal growth.

Retail Sales
The retail-sales report measures the total receipts of all retail stores in a given country. This measurement is derived from a diverse sample of retail stores throughout a nation. The report is particularly useful because it is a timely indicator of broad consumer spending patterns that is adjusted for seasonal variables. It can be used to predict the performance of more important lagging indicators, and to assess the immediate direction of an economy. Revisions to advanced reports of retail sales can cause significant volatility. The retail sales report can be compared to the sales activity of a publicly traded company.

Industrial Production
This report shows the change in the production of factories, mines and utilities within a nation. It also reports their 'capacity utilizations', the degree to which the capacity of each of these factories is being used. It is ideal for a nation to see an increase of production while being at its maximum or near maximum capacity utilization.

Traders using this indicator are usually concerned with utility production, which can be extremely volatile since the utilities industry, and in turn the trading of and demand for energy, is heavily affected by changes in weather. Significant revisions between reports can be caused by weather changes, which in turn, can cause volatility in the nation's currency.

Consumer Price Index (CPI)
The CPI is a measure of the change in the prices of consumer goods across over 200 different categories. This report, when compared to a nation's exports, can be used to see if a country is making or losing money on its products and services. Be careful, however, to monitor the exports - it is a focus that is popular with many traders because the prices of exports often change relative to a currency's strength or weakness.
Some of the other major indicators include the purchasing managers index (PMI), producer price index (PPI), durable goods report, employment cost index (ECI), and housing starts. And don't forget the many privately issued reports, the most famous of which is the Michigan Consumer Confidence Survey. All of these provide a valuable resource to traders, if used properly. So, How Are These Used?
Since economic indicators gauge a country's economic state, changes in the conditions reported will therefore directly affect the price and volume of a country's currency. It is important to keep in mind, however, that the indicators discussed above are not the only things that affect a currency's price. There are third-party reports, technical factors, and many other things that also can drastically affect a currency's valuation. Here are a few useful tips that may help you when conducting fundamental analysis in the foreign exchange market:

Keep an economic calendar on hand that lists the indicators and when they are due to be released. Also, keep an eye on the future; often markets will move in anticipation of a certain indicator or report due to be released at a later time.
Be informed about the economic indicators that are capturing most of the market's attention at any given time. Such indicators are catalysts for the largest price and volume movements. For example, when the U.S. dollar is weak, inflation is often one of the most watched indicators.
Know the market expectations for the data, and then pay attention to whether or not the expectations are met. That is far more important than the data itself. Occasionally, there is a drastic difference between the expectations and actual results and, if there is, be aware of the possible justifications for this difference.
Don't react too quickly to the news. Oftentimes, numbers are released and then revised, and things can change quickly. Pay attention to these revisions, as they may be a useful tool for seeing the trends and reacting more accurately to future reports.
Conclusion
There are many economic indicators, and even more private reports that can be used to evaluate the fundamentals of forex. It's important to take the time to not only look at the numbers, but also understand what they mean and how they affect a nation's economy. When properly used, these indicators can be an invaluable resource for any currency trader.
Keep an economic calendar on hand that lists the indicators and when they are due to be released. Also, keep an eye on the future; often markets will move in anticipation of a certain indicator or report due to be released at a later time.
Be informed about the economic indicators that are capturing most of the market's attention at any given time. Such indicators are catalysts for the largest price and volume movements. For example, when the U.S. dollar is weak, inflation is often one of the most watched indicators.
Know the market expectations for the data, and then pay attention to whether or not the expectations are met. That is far more important than the data itself. Occasionally, there is a drastic difference between the expectations and actual results and, if there is, be aware of the possible justifications for this difference.
Don't react too quickly to the news. Oftentimes, numbers are released and then revised, and things can change quickly. Pay attention to these revisions, as they may be a useful tool for seeing the trends and reacting more accurately to future reports.

OCO Order

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Placing an OCO Order

To Begin - Click on the bid or ask price of the particular currency that you want to trade. A window will appear which is labeled “Open Order for (the abbreviation of the currency)”. Fill in the boxes for Operation, Account, and Units in the same way that you would for a market order.

Next, click on the bullet entry button labeled “OCO”. There will now be two entry fields where the single rate box was located, with one labeled “Stop” and the other labeled “Limit”.

Input the desired rates at which you want your Stop or Limit to be triggered. Both boxes must be filled in for the order to be accepted, however, only one of the rates will be used to trigger or execute an order. If the Limit order is executed first, the stop will be cancelled and vice versa.


The Second Step - To cancel the order at any time, select the “cancel” button located on the bottom middle of the window. To proceed, select “place order” and a window labeled “Confirmation” will appear. This does not mean your order was executed. This window asks you to confirm that all of the information entered regarding the trade is correct. If the information is correct and you want to proceed with the trade, select “yes”. Selecting “no” will take you back to the previous window.


After “yes” has been selected there are three possible outcomes:

1. A box will appear indicating that you do not have enough funds in your account for the transaction.



2. A box will appear indicating that the OCO order has been incorrectly entered. This may occur if the rates entered for the Stop and Limit levels have been reversed.



3. If you have sufficient margin and your order was entered correctly, it will be displayed in the “Open Orders” window. This may take a few seconds depending on the speed of your Internet connection.


The order will remain in the “Open Orders” window until cancelled or executed. If executed, the order will disappear from the “Open Orders” window and the necessary changes will be reflected in the “Open Trades” window.

Placing a Limit Order

To Begin - Click on the bid or ask price of the particular currency that you want to trade. A window will appear which is labeled “Open Order for (the abbreviation of the currency)”. Fill in the boxes for Operation, Account, and Units in the same way that you would for a market order.

Next, click on the bullet entry button labeled “limit”. To set the limit rate level, input the desired rate at which you want your Limit triggered into the white field.


The Second Step - To cancel the order at any time, select the “cancel” button located on the bottom middle of the window. To proceed, select “place order” and a window labeled “Confirmation” will appear. This does not mean your order was executed. This window asks you to confirm that all of the information entered regarding the trade is correct. If the information is correct and you want to proceed with the trade, select “yes”. Selecting “no” will take you back to the previous window.


After “yes” has been selected there are three possible outcomes:

1. A box will appear indicating that you do not have enough funds in your account for the transaction.



2. A box will appear indicating that the limit rate has been incorrectly entered. This will happen when the exchange rate entered cannot be executed given the operation and the current market rate. The Limit Buy order will not be accepted if the exchange rate level on the order is numerically above the market. The opposite applies to Limit Sell orders for each respective currency pair.



3. If you have sufficient margin and your order was entered correctly, it will be displayed in the “Open Orders” window. This may take a few seconds depending on the speed of your Internet connection.


The order will remain in the “Open Orders” window until cancelled or executed. If executed, the order will disappear from the “Open Orders” window and the necessary changes will be reflected in the “Open Trades” window. Limit orders are filled at the exchange rate at which they are set.

Placing a STOP Order

Placing a Stop Order

To Begin - Click on the bid or ask price of the currency you want to trade. A window labeled “Open Order for (the abbreviation of the currency)” will appear. Fill in the boxes for Account, Operation, and Units in the same way that you would for a market order.

Next, click on the bullet entry button labeled “stop”. To set the stop rate level, input the desired rate at which you want your Stop triggered into the white field.


The Second Step - To cancel the order at any time, select the “cancel” button. To proceed, select “place order” and a window labeled “Confirmation” will appear. This does not mean your order was executed. This window asks you to confirm that all of the information regarding the trade is correct. If the information is correct and you want to proceed with the trade, select “yes”. Selecting “no” will take you back to the previous window.


After “yes” has been selected there are three possible outcomes:

1. A box will appear indicating that you do not have enough funds in your account for the transaction.



2. A box will appear indicating that the stop rate has been incorrectly entered. This will happen when the exchange rate entered cannot be executed given the operation and the current market rate. The stop buy order will not be accepted if the exchange rate level on the order is numerically below the market. The opposite applies to Stop Sell orders.



3. If you have sufficient margin and your order was entered correctly, it will be displayed in the “Open Orders” window. This may take a few seconds depending on the speed of your Internet connection.


The order will remain in the “Open Orders” window until cancelled or executed. If executed, the order will disappear from the “Open Orders” window and the necessary changes will be reflected in the “Open Trades” window.

[Warning: During volatile market conditions, stop orders may not be executed at the exact rate(s) specified.]

Market Order

Placing A Market Order

To Begin - click the bid or ask price of the particular currency that you want to trade. A window will appear which is labeled “Open Order for (the abbreviation of the currency)”.


Currency – This will display the currency you have selected to trade. You cannot change the currency from this box. If the currency is incorrect, press the Cancel Order button located on the lower left of the box and reenter.

Account – If you have more than one account with MG, you can choose from which account you wish to trade.

Operation – Select the buy or sell option. If you change the operation, the rate at which you are dealing will also change.

Units – Select the number of units involved in the trade (1-50). The default setting is "1". When closing a position, the unit box will default to the total number of units you are holding of that currency. You may change the number of units by clicking the drop-down arrow and scrolling to the number of units you wish to close.

Selecting A Market Order - The default setting “market” is for a market order and therefore does not need to be adjusted when placing a market order.

Rate - The exchange rate at which you agree to deal. For market orders exchange rate cannot be changed.

The Second Step – To cancel the order at any time, select the “cancel” button on the bottom middle of the window. To proceed with your order, select “place order”. A window labeled “Confirmation” will appear.



This does not mean your order was executed. This window asks you to confirm that all of the information regarding the trade is correct. If the information is correct and you want to complete the order, select “yes”. Selecting “no” will take you back to the previous window.

After “yes” has been selected there are two possible outcomes:
1. A box will appear indicating that you do not have enough funds in your account for the transaction.



2. Your order will be displayed in the “Open Orders” window. This may take a few seconds depending on the speed of your Internet connection.

If the trade appears in the “Open Orders” window this will indicate that the Deal Desk has received your order. If the price at which the order was placed is still valid, the Desk will execute the order. Once executed, the order will disappear from the “Open Orders” window and your position in the market will be reflected in the “Open Trades” window.



Market Price Re-Quote

In situations where the market has moved during the order submission process, the Deal Desk will offer you the new market price. When a new market price is sent back, the changed rate will begin blinking (or change colors, depending on your browser) in the Open Orders box. If you agree to submit the order at the new market rate, click on the rate that is blinking or has changed colors. To cancel the new offer, click on the order number. If you do not respond to the new price, the system will automatically cancel the order after 20 seconds or sooner depending on the volatility of the markets.

Ticket Order Numbers

Every time an order is submitted, it is tagged with an order #. Once an order is executed and becomes an open trade, the trade gets a ticket #. Ticket numbers are very important because all information recorded about the order or position is stored in relation to these numbers.

On occasion, one will see a number separated into two parts by a hyphen, reflecting a ticket that has been split apart into two or more orders. This occurs in the event of executions of Stop, Limit or OCO orders which liquidate parts of existing open positions.

Order Warning

An Important Notice About Orders Left Within The Market

Orders placed on the DealStation™ are considered as independent and are not linked to any particular open position(s) in the customer's account. All open orders are GTC (Good Till Cancelled) and the Deal Desk will execute these orders once triggered. OCO orders (One Cancels Other) are an exception in that if one side of the order is filled, the other side will be cancelled.

Orders can be used to either square (close) open trades or enter the market at various market prices. Should you decide to close your open trade(s) via market order(s), your open order(s) will still remain active until cancelled or executed by the dealing desk. Beware not to let these open orders become open trades if that is not your intention. You can cancel open orders by clicking on the order number and confirming that you wish to cancel these orders.

MG Financial Group is closed from Friday at 3:00 PM to Sunday at 5:00 PM NYT, however, the forex market is continually active due to the political and economic events that are happening 7 days a week. In fact, if there is a big news announcement while MG is closed, there is a chance that your stop or limit order may be triggered; and once the specified rate is hit, your stop or limit order will become an active market order. Your order may be filled during the time that MG is closed or at the time of opening. For this reason, it is advisable to settle your short-term positions prior to weekends and holidays.

If you are experiencing any technical difficulties such as net congestion and are uncertain as to the status of your orders of your positions, please contact the Dealing Desk immediately at 1-212-835-0104(5). Should a situation like this arise, we suggest that you do not attempt to adjust your positions through the online platform since any order(s) you cancel will no longer be the responsibility of the Dealing Desk to fill.

Forex Demo Account

A demo account is a valuable instrument that can introduce a novice to online trading or allow an industry veteran to sharpen his/her trading strategies.

•Demo-Trade via MG DealStationFX in a Real-Time Environment
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Account Settings
Balance $25,000
Advanced Options (MultiCurrency)

MG Demo customers can open accounts denominated in USD, EUR, JPY, GBP, CHF, AUD or CAD. You may select up to 3 different base currency accounts. Choose a starting balance for each base currency and the corresponding margin will be set automatically.
Base Currency Starting Balance Margin
USD $5,000 $15,000 $25,000 1%
EUR EUR 4,000 EUR 12,000 EUR 20,000
JPY JPY 500,000 JPY 1,500,000 JPY 2,500,000
GBP GBP 2,000 GBP 6,000 GBP 15,000
CHF CHF 4,000 CHF 12,000 CHF 20,000
AUD AUD 6,000 AUD 18,000 AUD 30,000
CAD CAD 6,000 CAD 18,000 CAD 30,000
If you wish to change your margin settings after you have created your account, please contact us.


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Demo trading terms and conditions

Demo trading and the Demo contest serve a demonstrative purpose only. Trading a live account may be significantly more difficult and risky for many reasons including but no limited to the inability or unwillingness of counterparties to honor indicative pricing, illiquidity of a particular currency pair(s), extreme volatility of the currency market(s), as well and the added physical and psychological stress of a real money trade(s). Although customers are encouraged to use the demo trading account and the demo contest for the purpose of learning and familiarizing themselves with the DealStation platform, trading a demo account may not prepare a customer or potential customer for all the risks associated with live forex trading. Please read the full risk disclaimer to find out about some of the many risk factors involved in forex trading.

I have read, understood and accept the Demo trading terms and conditions.





Upon clicking the "Submit Request" button, you will soon receive via email your Free Demo Account's Username and Password.

When you request a FREE Demo Account, you will get continuous access to this demo account for as long as you like. Simply log in and trade at least once every 3 months and this free demo account will never expire.

You can use this Username and Password to 1) access the Demo Trading Platform for as long as you wish, and 2) have a free trial of the additional Charts software for 30-days.

If you forgot or lost your demo account login information please proceed to the "Forgot Demo Info" page to retrieve your username and password.

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Pakistan's Forex Reserves

KARACHI, Feb 26 (Reuters) - Pakistan's foreign exchange reserves fell by $210 million to $10.16 billion in the week that ended on Feb. 21, the central bank said on Thursday.
The State Bank of Pakistan's reserves were $6.73 billion from $6.91 billion a week earlier, while reserves held by commercial banks were $3.43 billion from $3.46 billion, the bank said.

Pakistan fully repaid a maturing $500 million euro bond, plus $17 million interest, on Feb. 18. The payment is reflected in this week's data.

Pakistan's foreign reserves hit a record high of $16.5 billion in October 2007 but fell to $6.6 billion in November, largely because of a soaring import bill.

Pakistan signed a $7.6 billion loan agreement with the International Monetary Fund in November to stave off a balance of payments crisis. It received its first tranche of $3.1 billion that month.

The next tranche is expected by the end of March. (Reporting by Sahar Ahmed; Editing by Simon Cameron-Moore)

What is PKR?

The official currency of Pakistan is the rupee (PKR). One rupee consists of 100 paise (singular = paisa). When Pakistan began printing its own currency in 1948, they used Indian currency with "Pakistan" stamped on it for the first few months until enough of the Pakistani notes were in circulation. Until 1961, the rupee was divided into 16 Annas before being changed to 100 paise. From the time of the rupee's introduction until the turn of the 21 st century, it steadily declined in value against the U.S. dollar. Then, Pakistan's large current-account surplus drove up the value of the rupee until the government lowered interest rates and bought dollars to stabilize the currencies value and maintain its export competitiveness.





Sovereign credit ratings play an important part in determining a country's access to international capital markets, and the terms of that access. Sovereign ratings help to foster dramatic growth, stability, and efficiency of international and domestic markets.

Top Forex Swings in History

The foreign exchange industry exists whenever one currency is traded for another. It is by far the largest market in the world in terms of cash value traded, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The market is unique due to several factors including trading volume, the extreme liquidity of the market, geographical dispersion, the 24 hour trade day, the large number and variety of traders in the market and the variety of factors that affect exchange rates.

Among these factors that affect exchange rates is the news. This is one of the greatest advantages that the forex market has over all of the other markets; there is no such thing as insider trading. All a trader needs to do in the forex market is to stay abreast of the news, develop an opinion and apply that opinion to the markets. Some of the best currency trades in the world have been placed by investors following the news and taking advantage of the information given to them.

During the summer of 1992 there was wide spread speculation that England was going to be rejected from the European Monetary Union, which would severely hurt the English pound. George Soros, founder and head of one of the largest hedge funds in the world, The Quantum Fund, took advantage of England's poor fortune, by placing a ten billion short position in the market. The Bank of England attempted to stabilize the pound's value by intervening and depleting all of their foreign currency reserves. Despite their efforts, on September 16, 1992, known around the world as Black Wednesday, the fight was over and the pound plummeted. England was forced to withdraw from the European Monetary Union and in one day, Soros earned $1 billion. He is now known as the man who broke the Bank of England.

Stanley Druckenmiller, former money manager for George Soros, now runs Duquesne Capital which he founded in 1981. In 1989, he developed one of his greatest ideas. While working at George Soros's Quantum Fund, Druckenmiller bought two billion German marks. He believed that due to the falling of the Berlin wall and the reunification of Germany, the deutschemark was set for a huge rally. That one idea made him a very rich man, with the deutschemark climbing enormously in value over the next few years. Druckenmiller's exact profits on this investment remain unknown, but the Quantum Fund posted returns of over 60%.

Andy Krieger, once a star at Banker's Trust before resigning to work for no other than Mr. George Soros, is best remembered in New Zealand. During the U.S. stock market crash of 1987, traders were buying up any currency that was appreciating against the dollar, the most popular being the New Zealand dollar or the "kiwi" as it is known in the currency market. Mr. Krieger, knowing that this rally could never last and believing that the kiwi was one of the most overvalued currencies in the market, shorted 200 million kiwi which is more than the entire money supply of New Zealand. The currency not surprisingly buckled under this pressure, allowing Kreiger to cover his positions and walk away with a huge profit. .

All of these trades have one common underlying factor. Each of these traders had an opinion that was based on pure economic, fundamental data. Due to markets being more efficient and traders being more regulated, it would be nearly impossible to replicate any of these trades, however it would be rather easy to replicate the foundation on which each and every one of these trades were based.

Iraqi Dinar-Is it a good Investment??

Introduced in circulation in 1931, the Iraqi dinar has changed hands from even the earliest days. Backed by British pounds to being pegged to the US dollar, the currency has had its fair share of activity. However, now with the Central Bank of Iraq issuing a new and stable currency, plenty of global speculators are seeing an opportunity. Or is it? Since the 2003 fall of the administration and the deposition of its ruler Saddam Hussein, the Coalition Provisional Authority or the current transitional government has issued new Iraqi dinar. Printed by De La Rue and adding in modern anti-forgery techniques, the updated currency has been revalued from as low as 4000 dinar per U.S. dollar to as high as 980 dinars per dollar. This wild swing is what speculators are looking to cash in on, sparking massive amounts of scams on the internet and associated forums. Sites promising wildly higher rates of exchange for the currency and guaranteed rates of return are banking on the hope that once the market opens up for the Iraqi currency, the exchange rate, much like that for the Chinese yuan, will explode higher. But is it all true?
The Attractive Investment
Why has the dinar become so popular? It's the simple fact that many of us remember when the Kuwait dinar declined to a valuation of 10 US cents after the invasion by Iraq. However, since January 5, 2003, the previous weighted currency basket peg was switched to a higher valuation of 0.29963 dinar. This translates into $3.34 per 1 dinar, the world’s highest valued currency. Translating this into an exchange rate transaction, a $10,000 initial investment around the Gulf War would yield the investor a 3,240% rate of return of $334,000. The same expectations loom over the Iraq economy. Rich in crude exports and likely to remain under the guidance of the US, the country is expected to make a rebound and be catapulted into the global economic arena. The improvement and expansion are expected to be reflected in the underlying currency, creating instant profits for the dinar speculator.

Virtually Worthless Currency
However, the rumors and internet ploys are not true. All that glitters may be gold, but it comes at a price. The first barrier has to do with pricing. Formally introduced in October, the new Iraqi dinar is virtually worthless, trading at 1,460 dinars to $1. However, with the dinar still not on the international open market, exchange rates for the currency vary widely. On the streets, the value of the dinar can be as high as 1,500 dinar to the $1. Comparatively, the International Monetary Fund has specified a fixed exchange rate of 1,449 at the Cental Bank of Iraq. The discrepancy goes as far as trading companies and dealers, which handle the retail public, quoting amounts as different as 1,050 to 1,356 per $1. The differences in prices can contribute to an unfairly priced market. Granted, the opportunity does exist. However, it leads to a second concern, liquidity.

Liquidity Is King
Unlike the widely accepted major and emerging market currencies, trading the Iraqi dinar has significant barriers. Attributed to the wide discrepancies in prices, banks will not openly trade the dinar with the public. Larger institutions are only able to obtain the stable 1,460 dinar to $1 exchange rate. This will leave the retail trader to pick between the scant number of dealers offering differing prices. In addition, dealers won't always buy back dinars in the market, rather they only sell the currency to the market. U.S. banks, unfortunately won't transact in them either at the retail level. As a result, the illiquidity or absence of true transaction sources will leave the smaller retail investor holding the bag when it's time to cash out of the currency.

Political Upheaval
Although under the guidance of the US, the majority of the political development has been handed over to the new Iraqi government. This leaves a lot of leeway for geopolitical event risk as insurgents continue to battle the current administration in a land that is rife with civil war. The volatility will be reflected in the currency as fluctuations on a speculative manner can move prices all over the place. That's just considering one stable price and not numerous different prices. In addition, time is a heavy consideration. Although the power has been handed over to regional government heads, the insurgence could take years to end before there is stability. Ultimately, this will keep a majority of investors out of the market until the country becomes grounded.

Internet Fraud
Last but not least, the dinars ordered on the internet may be the older versions, considered useless on the market. Although the new dinars are difficult to counterfeit and pass off, dealers and traders in the dinar have sometimes replaced the old dinars, bought at extremely cheap prices, with the new versions in hopes that the unknowing investors won't pick up on the difference. In addition, older bills will also be mixed into the ordered shipment, lowering the value of the overall amount. In some cases, this will halve the value of the overall order, already considering it a losing investment. Some dealers have even taken the money and run away, not delivering on the ordered currency and leaving the investor empty handed.

Conclusion
Although a highly rewarding opportunity, attempting to buy Iraqi dinars on the internet is a risky transaction. Call it straight out gambling. Nothing is guaranteed and the risk reward ratio is low. This simple fact will likely keep a majority of traders out of the market. As a result, with varied prices, a handful of participants and plenty of fraud potential, the dinar market is one that has numerous barriers that will likely hang around for a while and attract only those that are misinformed.

Taking Advantage Of Dollar's Vlaue In Asia

ooking to plan that terrific family vacation? Are you sick of that same vacation year after year? Think about traveling further east to Asia and take advantage of the great cultural experience along with the great exchange rates. Using the dollar's value to your advantage probably hasn't crossed your mine recently with its poor performance against the Euro, but in Asia things are different. Currently, the dollar measures up extremely well against all major Asian currencies, which make it a perfect time for Americans to visit and explore this beautiful continent. Regardless of the type of vacation you are looking for, Asia has everything to offer from the beautiful beaches of Thailand and Bali to the exciting and culture filled city life of Beijing and Hong Kong.

If lying in the sun, playing water sports, and taking long walks on the beach are what you're looking for in a vacation, then a relaxing week in Bali, Indonesia is perfect for you. Bali has everything to offer someone looking for an island getaway including tropical rain forests, beautiful temples and palaces, towering volcanoes, gorgeous golf courses, and of course miles and miles of sandy beaches filled with sun bathers and surfers. The temperature in Bali is consistently beautiful with the average low throughout the year at about 75º F and the average year high 88º F. Watch out for the rain from December through March though, when Bali can be hit with the Monsoons coming from the West resulting in heavy rain. The excellent exchange rate between the Indonesian Rupiah and the American dollar allows tourists to find excellent rates on hotel rooms in Bali. One can get a standard room at a five star hotel for two adults on a Friday evening for about $100.00. If you were to stay in a less luxurious hotel the prices decrease sharply with a three star hotel on a Friday night for two adults in a standard room costing under $40.00. In addition to the inexpensive accommodations, travelers can enjoy great food and entertainment at a low cost.

If Bali doesn't sound appealing to you, but you are still looking for fun in the sun then Thailand may be the place to spend your vacation. Of course if you are going to go to Thailand then a visit to Bangkok should be part of the itinerary, but Phuket or one of the other beautiful beach towns would be a good main destination. Phuket is Thailand's largest island and has beaches lining the coast all around. The accommodations in Thailand are similarly priced to those in Bali, due to the strength of the dollar against the Thai Baht.

A more culture filled, diverse vacation what you looking for? Both Beijing and Hong Kong have lots to offer and both have the benefit of having weak currencies against the US dollar. In both destinations accommodations can be found in five star hotels for around $100.00 a night, and in three and four star hotels starting at around $40.00 a night depending on the location. These cities have everything to offer ranging from museums to temples to amusement parks and even beaches. The weather in both these places is similar to the weather in the Northeast of the United States with Hong Kong having slightly milder seasons than Beijing.

The downfall to vacationing in Asia is that these places can be expensive to get to. However, it is possible to fly inexpensively to Asia. The trick is book ahead of time at least a few months and travel during the middle of the week. Flights to Asia go up by hundreds of dollars on the weekends. Although, travel expenses are going to be higher when traveling from the U.S. to Asia rather than Europe or the Carribean, the dollars value against the major Asian currencies make it a great bargain once you get there. Remember if you are saving two to three hundred dollars a night on your hotel room plus an additional few hundred on food and entertainment then the airline ticket is paid for within the first few days of the vacation. This is a great opportunity for people to visit and explore a new destination while taking advantage of the value of the US dollar.

Technical Analysis-Introduction

Technical analysis is the forecasting of future market prices, based upon charts representing historical price movements. Trades using technical analysis examine the history of market prices and the turnover of relevant financial instruments in order to identify the market trend and its possible changes.

Charts representing historical prices reveal various shapes and formations, traders using technical analysis methods claim that the formations occur on a regular basis and lead to similar market behaviors - continuation or change of the market trend. Unlike fundamental analysis, which evaluates overall market situation, technical analysis may be used to define the moment of entering and closing the market position.

Technical analysis is based on the following assumptions:
1.Market discounts everything - all the factors that have influence on the price are already discounted. It comes from the supposition that prices reflect changes in relation to supply and demand.
2.Prices are subject to trends – a technical analyst tries to discover a trend (actual direction in which prices follow) by analyzing the historical prices charts. Identification of the trend in its early stage of development may lead to profitable transactions.
3.History repeats itself – by studying the charts one can recognize repeatable formations drawn by the prices. It is a consequence of recurring human behaviors in specific situations. Analysts attempt to identify the price formations in the current market behavior and upon this basis forecast the future price movements

Technical Analysis-Analyzing the chart patterns

Technical analysis - analyzing the chart patterns
Identification of chart patterns may reveal the future market behavior basing on the assumption that the way the market forces interact does not change significantly with time and may be analyzed on the historical charts. As a complete pictorial record of all trading, chart patterns provide a framework to analyze the battle raging between bulls and bears. What is more important, chart patterns and technical analysis can help determine who is winning the battle, allowing traders to take a proper market position. It may be observed that chart patterns constitute a more complex variation of trend lines .

Rectangle




Chart 1. Rectangle pattern

A Rectangular pattern signals a continuation in the market trend and constitutes a trading range during a pause in the trend. The pattern is easily identifiable by two highs and two lows, that can be connected by two parallel lines, thus forming the top and bottom of a rectangle. Rectangles are sometimes referred to as trading ranges, consolidation zones or congestion areas.

Head and Shoulders

Chart 2 Head and Shoulders Top (Reversal)

Head and Shoulders reversal pattern forms after an uptrend, and its completion marks a trend reversal. The pattern contains three successive peaks with the middle peak (head) being the highest and the two outside peaks (shoulders) being low and roughly equal. The reaction lows of each peak can be connected to form support, or a neckline.



Chart 3 Head and Shoulders Bottom (Reversal)

The Head and Shoulders bottom is sometimes referred to as "an inverse head and shoulders". The pattern shares many common characteristics with the classical H&S formation, but relies more on volume patterns for confirmation.
As a major reversal pattern, the Head and Shoulders bottom forms after a downtrend, and its completion marks a change in trend. The pattern contains three successive troughs with the middle trough (head) being the deepest and the two outside troughs (shoulders) being more shallow. In its most classical form, the two shoulders should be equal in height and width. The neckline that connects the lows forms resistance.

Double Bottom (Reversal)


Chart 4 Double Bottom (Reversal)

Although there can be variations, the classic double bottom usually marks an intermediate or long-term change in the underlying trend. Many potential double bottoms can form along the way down, but until the key resistance is broken, a reversal cannot be confirmed. The double bottom is a major reversal pattern that forms after an extended downtrend. As its name implies, the pattern is made up of two consecutive troughs that are roughly equal, with a moderate peak in between.

Symmetrical Triangle, Ascending Triangle, Descending Triangle


Graph. 5 Symmetrical Triangles

The symmetrical triangle, which can also be referred to as a coil, usually forms during a trend as a continuation pattern. The pattern contains at least two lower highs and two higher lows. When these points are connected, the lines converge as they are extended and the symmetrical triangle takes shape. You could also think of it as a contracting wedge, wide at the beginning and narrowing over time.

The ascending triangle is a bullish formation that usually forms during an uptrend as a continuation pattern. There are instances when ascending triangles form as reversal patterns at the end of a downtrend, but they are typically continuation patterns. Regardless of where they form, ascending triangles are bullish patterns that indicate accumulation.

The descending triangle is a bearish formation that usually forms during a downtrend as a continuation pattern. There are instances when descending triangles form as reversal patterns at the end of an uptrend, but they are typically continuation patterns. Regardless of where they form, descending triangles are bearish patterns that indicate distribution.

Flag and Pennant


Chart 6 Flag&Pennant

Flags and Pennants are short-term continuation patterns that mark a small consolidation before the previous move resumes. These patterns are usually preceded by a sharp advance or decline with heavy volume, and mark a mid-point of the move.

Technical Analysis Indicator

The most popular tools used by traders are technical indicators, such as moving average, RSI, MACD, Momentum and stochastic oscillator. These oscillators may be useful especially during stagnant periods in the market without any apparent trend.

Moving average is an indicator based on average quotations from specified amount of sessions. Primary analysis is based on a crossover of prices and the moving average. If the price line breaks the moving average from below, this is regarded as "buy" signal. Breaching the average from above results in a "sell" signal. It is possible to apply a combination of averages with various periods parameter. Moving averages are one of the most popular and easy to use tools available to the technical analysts. They smooth the data series and make it easier to spot trends, which can be especially helpful with volatile markets. They also constitute the basis for many other technical indicators and studies.
MACD is one of the most popular technical indicators. It is based on two exponential moving averages with a different periods parameter. The moving average of the indicator forms a signal line. Primary interpretation assumes that breaking the signal line by MACD from below represents a "buy" signal, whereas crossing from above a sell signal. Breaking of the balance level ("0") is considered as confirmation of the signals. Developed by Gerald Appel, Moving Average Convergence/Divergence (MACD) is one of the simplest and most reliable indicators available. MACD uses moving averages, which are lagging indicators, turned into a momentum oscillator by subtracting the longer moving average from the shorter one. The resulting plot forms a line that oscillates above and below zero, without any upper or lower limits. MACD is a centered oscillator.

RSI constitutes a popular technical analysis indicator, widely used in order to trade against the main trend. It is capable of providing relatively reliable signals of overbought and outsold market conditions. RSI values range from 0 to 100. Value above 70 is usually considered as an overbought market signal, whereas values below 30 signifies outsold market conditions.
When RSI is in an overbought or outsold condition, there may occur divergences between oscillator movements and price movements. RSI divergences may suggest future trend reversals.

Positive divergences – appear when RSI continuing downward trend in outsold section forms consecutive threads, which are placed increasingly higher, however price chart sets up accordingly decreasingly lower threads. This situation suggests reversal of downward trend and possible future bull market. RSI precedes future price growths generating a buy signal.

Negative divergences – appear when RSI is in an overbought section sets up consecutive peaks, which are placed decreasingly lower. Price chart however forms accordingly higher peaks. Preceding future price dips, RSI indicates trend reversal and possible bear market.

Stochastic slow similar to RSI ranges within 0 and 100 value scale. There are two lines in this oscillator: %K and %D. %K is a primary source for signals. %K and %D lines make for a quick stochastic oscillator, which is rather rarely used because of it’s over sensitivity to market moves. Slow stochastic oscillator is a polished quick version, which comes from using an average of 3 time units &%K and %D lines. Primary oscillator signal is an intersection of %K and %D lines. Outsold area for %D is less then 30, and overbought area is more then 70. Sell signals are usually generated when %K line (quicker) crosses from above falling line %D. Buy signal occurs when %K line crosses from below increasing %D line. Like in RSI a key issue while observing stochastic oscillator is an analysis of divergence between %D line and a price chart.

Psycological Aspects Of investing

One of the most important factors for success on the FOREX, commodities and equity markets is investor’s psychological ability to take the financial risk and act under pressure. All the traders operating on OTC derivatives markets should have a selective thinking ability, capability of accepting the loss and avoiding market pressure.

Ability of selective thinking - the separation of the trader's own considerations and market forecasts from currently possessed market position. Thinking about market through currently owned position is most often wishful thinking and has nothing to do with actual market situation. Most often traders that do not have any real position achieve very good results, however when real money is considered, they are not capable of achieving analogical results.
Second problem of OTC derivatives traders is a lack of acceptance for a certain level of loss. Most often traders. while they close the position, satisfy themselves with small profits, however when a position generates a loss, they find it difficult to close it, as they imagine that soon the situation will change for the better. This behavior may lead to unlimited risk and exposure and excessive financial losses, that could have been otherwise avoided. It is the trader's psychology that tells him to believe up to the end in a positive transaction conclusion, ignoring basic money management principles.
Ability to avoid market settings pressure relies on the skill to make trading decisions without consideration for the market environment. Traders should be able to select from the surrounding information ‘noise’ only the essential news and not give in to pressure from the environment.

Why Currency College Training?

We hope that you have had the chance to look at a few other Forex training courses. We created Currency College with your interest in mind, we certainly did our homework. The majority of Forex training courses cover the same basic principles.

If you did not read between the lines, companies that offer such courses have a very simple business model; they hope for the greatest possible number of students, studying the same online curriculum, while utilizing the least amount of instructors. Your 'access' to course instructors usually consists of what is commonly known as a chat room. Multiple students type in a question or concern, someone (a course instructor) on the other end may or may not type a response. Your Forex training has now become the ideal situation for the company providing your very basic education.

Our business model is quite the opposite. We will always offer our clients a comprehensive look at the truth. There are Forex training courses available that will certainly take you further in your understanding of the market. If you prefer to individually tackle an online course from your end of the computer, you should be able to find what you are looking for.

Trading International has chosen to develop a course perhaps less profitable for us, but certainly more productive for you. Currency College teams you up, one-on-one, with a professional trader. Via web conference you and your coach will see the same screen; you will trade along side your professional trainer. Not only are you connected via web conference, but also through the phone line. As principles are taught; if you would like to ask questions, have your trainer repeat the principle, or whatever the case may be - it is up to you, the training moves at your pace.

Your coach spends up to an hour a week on the phone focused completely on you . As you see what your coach sees, and follow along in the course manual, your understanding and skills are acquired at a pace that makes sense. Each training session focuses on key trading techniques and skills. You then have the following week to implement what you have learned. Your coach will assign homework and tasks for you to accomplish in order to ensure that you are absorbing the material. The next session picks up where you left off, and does not move forward unless you are ready. Over the span of a few weeks, perhaps even months, you have the time and necessary resources needed to conquer the Forex market. Each of your training sessions are recorded and promptly mailed to you. You can then review your training as many times as you feel necessary.

If you are ready to move forward with a serious training program; you can rest assured that Currency College has taken your trading, and the trading of many before you, very seriously. In this manner, we turn Forex enthusiasts into Forex professionals. We are in the business of education, and we would like you to join the team. All trainings will be personalized according to your needs. Certain areas may not need a strong focus, while other areas may need more time and attention.

Forex Education: How To Cut The Learning Curve In Half

According to one veteran trader, forex education can take anywhere from a few months to 3 years, depending on a person's level of experience or
aptitude. That's quite a learning curve and plenty of time for despondency to set in from your partner or family members as they see you sat in front of
a computer screen hour after hour, and no money coming in as a result of your efforts. Thankfully there are simple steps you can take to cut the
learning curve in half. If you are an absolute beginner and know nothing about the Forex, then you need to spend a few hours reading up on Forex
basics, educating yourself on the terminology and how the market works. Then open a demo account with an online broker and devote a few days to
getting thoroughly familiar with your trading platform and charting package. Learn the various menu options and how to put in entry orders quickly,
setting your entry point, stops and limits so the procedure becomes second nature. Once you have laid that foundation you can now starting moving
up the learning ladder. The following suggestions will significantly reduce the time it takes to become a profitable trader: 1. Invest in a Forex education
package. Not all Forex education materials are born equal. A lot of what is out on the internet is full of 'fluff' and 'filler', written by people who deal with
theory but do not actually trade themselves. So in choosing a Forex education package be sure the people behind it are professional traders
themselves with a successful track record. Often, by putting the name of the Forex education course in Google you can check out forums and user
comments which can be revealing. 2. Maintain an ongoing Forex education Once you have gone through your Forex education course once you
need to do it again and again. In other words, you have an ongoing Forex education. Why is it important to go through the coarse materials a number
of times? Because there is so much information it is not possible for the brain to absorb it all at once. As you practice and develop as a trader,
information you previously read which didn't make much sense at the time, will now take on new meaning as you associate it with actual trading
scenarios you may have had as you progress in trading. 3. Take notes and create a diary. This is a biggie! Every successful trader I know has made
a record, taking note of their good trades and losing trades as they gain experience. True, it involves work and effort. But in the long wrong, this single
step alone will significantly cut down your learning curve. Without taking notes and doing a post-mortem on your trades, you can go on repeating the
same mistakes over and over. This is time consuming, frustrating, and exhausting. By keeping a record you are able to identify patterns of trading
behavior you need to correct. These days with free screen capture utilities available on the net, you can just save a gif or jpg image of your charting
screen, print it off, and write notes all over it, highlighting features on the chart that made you do what you did. Going back over these print outs and
learning from them is a very, very powerful method for bringing you up to speed as a successful trader. 4. Keep studying the charts. There is no short
cut for this. You will need to spend hours going over the charts, identifying patterns, trends, support & resistance lines etc. The more time you spend
doing this, the quicker you will develop a feel for the market. After much practice these elements will jump out at you every time you just glance at a
chart. That's the stage you want to reach, instant recognition. Rather than blindly continuing day after day, practicing in a demo account and getting
nowhere: 1. Invest in a professional Forex education course 2. Maintain an ongoing education by repeat readings 3. Keep records and carefully
analyze your trades 4. Invest time in developing instant chart pattern recognition These four key points, when applied, will give focus and direction to
your Forex education and your learning curve will be significantly reduced. Why not explain to your partner or other family members your program or
plan of action so they know what to expect? Help them realize this business involves a large investment of time and energy until the skills are
acquired and with perseverance and application your Forex education will result in a substantial income.

Money Management

Is there a secret to becoming a successful trader?
There is a method that all successful traders use, and it’s no secret. It’s called
money management.

Money management is not some vague industry lingo – it simply means the
knowledge and skill of managing your Forex trading account. As simple as that
may seem, it’s the key to a long and successful trading career. And yet it is often
forgotten or neglected in the thrill of the trade. We’d like to take this opportunity
to lay out some ground rules by which you can effectively manage your account.

Don’t go looking for the Big Win; it will most likely result in a big loss. Successful
trading means consistent trading, where small wins amount to large long term
profits. Never assume that all your trades will be profitable, and plan on losses.

You should only risk a small percentage of your total account balance on each
trade. This simply minimizes your risk, so that even if you end up losing your
entire investment on a trade, it doesn’t have a critical effect on your account
balance. The recommended amount is 2% of your account balance per trade.

More aggressive traders go as high as 5%, but never higher than that. It is a very
important rule to keep, since the lower your account balance drops, the harder it
is to rebuild it.
Using Limit Orders

Learn to use the Stop Loss and Take Profit orders effectively. These orders protect
your investment and realize your profits. They are very simple tools that can make
all the difference to your account balance.
Size of Trades

You are suggested to open small trades, because in the case of a losing trade, you
can then open the opposite trade with a bigger investment or higher leverage,
thus compensating for losses.
Practice with Virtual Money

Use virtual money mode for practice. One of the unique features of eToro is that
our platform provides you with a practice environment. Virtual money mode
works exactly the same as real trading mode and uses the same real time rates,
with the small difference of no risk involved. We recommend using the practice
mode to get to know the platform and gain Forex trading experience.

And even after you’ve begun trading with real money, it is the perfect place to try
out your trading strategies. There is no point in risking your money to test out a
possible theory, when you can do so with the same success minus the risk. After
seeing that your strategy is consistently successful with virtual money, you can try it out for real.


Remember, money management is very simple to master, but not as simple to
keep up. Once you’ve developed the money management system that works for
you, make sure to stick with it and don’t let your emotions get in the way of long
term profit, even if it means absorbing short term losses.

The Quest for Volatility

The Forex market is open 24 hours a day, but what are the best times to make a profit?

Even though the Forex market is open 24 hours a day with the exception of weekends, not all hours are as equally good for trading. The reason that the

Forex market is open 24 hours a day is that it is made up of different sessions around the globe that between them cover 24 hours.

The more markets are active at the same time, the more trades are being executed, and the more action for you to cash in on.

Trading Sessions (GMT):


Since the London session is the busiest out of the four, the best times for trading
are 8am‐9am (GMT) and 13pm‐17pm (GMT), because that’s when the London
session overlaps with other sessions.

Abuse the news.

As for news reports, these are times to be careful. Many profitable trades are
made moments prior to or shortly after major economical announcements. You
can gain a fortune as well as lose one if you’re not sure of what you’re doing. This
is why it’s important to stay on top of what’s happening in the international
finance arena.
Market sentiment becomes crucial at these times, since traders
basically stampede to the market around the time of the report. eToro makes sure
to give you a heads up whenever anything major is going down

Remember, even though you’re able to trade 24 hours a day, it’s better to plan
your trading activity in order to catch the best action for a chance to maximize
your profits and minimize your losses

Hedging Risks and Rewards

Forex trading is a risky business. This chapter will explain the usage of Stop Loss
(SL) and Take Profit (TP) orders. These are used for hedging your risks and
rewards, realizing your profits and minimizing your losses.
eToro places an automatic Stop Loss order on all your trades to prevent you from
losing more than you’ve invested. If the rate of your open trade drops below
what’s covered by your investment, the trade is closed by the automatic Stop
Loss.

This means the maximum amount you can lose on a trade is almost always
limited to the initial investment of the trade.

Still, there is no reason why you should wait until you lose your entire investment
to close the trade. By setting a Stop Loss order you make sure that the value of
your trade doesn’t drop below a certain level. This way you control the maximum
amount that you are willing to lose on a trade, without having to monitor each
trade around the clock.

Take Profit orders are similar to stop loss orders, only referring to profits. Take
Profit orders make sure that once your trade reaches a certain level of profit it will
be closed.

For instance, imagine that you’ve opened a Long EUR/USD trade for at the rate of
1.5400. After a few hours the rate rises to 1.5500, but an hour later drops to
1.5300. Without a Take Profit order, you might miss the rise in the rate, and end
up with a loss on your hands.

If you had set a Take Profit order, the potential profit of the trade would have
been realized, without you having to monitor the trade around the clock.

Remember, Stop Loss and Take Profit orders are very simple tools that can
make the difference between a successful trading career and a big hole in
your pocket. Consider using these orders with every trade that you make.

A Simple Trade Example

Are you ready? It's time to trade!

Here is a to‐do list of actions to be taken as you open a trade:
‐ Identify the pair to buy/sell
‐ Decide on the initial investment amount
‐ Choose the appropriate leverage
‐ Consider applying trade limits (covered in the next chapter)
‐ Open trade


Let’s say that after spending some quality time on gazing at the charts of several
currencies, you’ve concluded that:
1) The EUR is trending up
2) The USD is trending down


Now, what is the reasonable decision based on this conclusion?
Clearly you can profit by first selling USD and buying EUR, and then buying
cheaper USD and sell expensive EUR.

We could do this by buying and then selling the EUR/USD currency pair.

A reminder ‐ buying is done at 'Ask' price, while selling is done at the “Bid” price.

Imagine that you bought $100 worth of EUR/USD with a leverage of 1:100 at the
exchange rate of 1.5461. The details of your trade are:

Investment-- $100
Leverage--1:100
Units sold-- 10,000
EUR/USD --(Ask) 1.5461

In plain English, what you’ve just done is bought (100X100=) 10,000 Units of EUR
/USD, which at that specific rate represents 1.5461 USD per 1EUR.
Now, let’s assume that at the end of the day, or possibly even a few minutes later,
the EUR/USD rate has risen to 1.5538. You sell those 10,000 Euro/USD Units at
the new rate of 1.5538 and get $177 back.

This means that this seemingly insignificant fluctuation in the rate allows you to
cash in $77 from an initial investment of $100.
In other words you just made 77% profit on your investment, thanks to the
movement in the pair's quote.
On the example trade that we’ve just seen, your risk and reward was unlimited,
and the risk was limited which is good if you are very certain regarding your
decisions.
However, as a beginner you shouldn't trust yourself too much, as you are bound
to make mistakes. By learning about special trade order features, you will be able
to hedge your risks

Tactical usage of Leverage

If you’ve been at all exposed to the world of Forex you’ve probably heard the word “Leverage” being tossed around. But what exactly is “Leverage”?

Leverage is a very important part of Forex trading, and it’s critical that you know exactly how it works and how to use it. It is the term Forex traders use to refer to the ratio of invested amount related to the trade's actual value.

Forex brokers usually provide their customers with the option to trade on borrowed capital, so that traders don’t have to invest tens of thousands of dollars for the chance to make any real profit. When you trade at a leverage of 1:100, or X100, it means that for every $1 that you invest in the market, the broker invests $100. As a result, you can control an amount of $10,000 by investing $100. eToro provides traders with the opportunity of trading at up to 1:400 leverage.

It probably won’t surprise you when we say that with greater opportunity for profit comes greater risk. Just like slight fluctuations in currency rates can make you significant amounts of money, it can also cause you to lose your money very quickly. The higher the leverage, the larger the profit that you stand to make and the quicker you might lose your investment. A leverage of 1:400 can make you more money than a leverage of 1:100, but it also puts your initial investment at more risk.

If you trade with a leverage of 1:100 the market would have to move 100 pips against you for your position to be wiped out. On the other hand, if you trade with a leverage of 1:400 the market would only have to move 25 points against you for your position to be wiped out.

We recommend first opening a position with a low 1:100 Leverage, and only once you see that you’ve hit a strong trend, consider opening one with a 1:400 leverage.


The Ratio between Minimal Lot Size, Trade Size and Leverage

Fundamentally, the minimal lot size for a trade is $10,000, thus the leverage limitations are set according to the amount you choose to trade:

The advantage of trading with Leverage is that while your profits potential is
virtually infinite, at eToro your loss is limited to the amount of your initial
investment.

Once the rate drops below the rate covered by your investment, the
trade is automatically closed. That is done through an automatic Stop Loss –
explained in the next chapter.

Remember, Leverage can be a trader’s best friend when used carefully,
and his worst enemy when used recklessly. It is a great tool for increasing
profits, in fact private traders rarely trade without it, but you should
always keep in mind that the higher the leverage is – the higher the risk
level involved.

The Trend is Your Friend

Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future. Although this may seem pretty basic, being able to identify when a pair is in a trend and when it isn't will help you to increase your chances to profit consistently in the Forex market. When you can identify a trend, you can estimate what direction the rate of a currency pair is going to go in. You should exploit the direction of the trend you identify by placing a trade in that direction. If it’s an uptrend, meaning that the rate is increasing, buying the currency pair will give you a better probability for profit. If it’s a downtrend, meaning that the rate is decreasing, selling the currency pair will give you a better chance of making money.

How do I identify a trend? What are the characteristics of a trend?
The simplest way to identify a trend is through the distinct patterns that the price forms. These can tell you if the market is moving in an uptrend or downtrend.

Identifying a Forex Trend
When a trend is taking place in a Forex pair, the price movements start to form
peaks and valleys in the chart of that pair, which are easily identified.
In an uptrend, the price movements form a series of higher peaks and higher
valleys.
(Higher Highs and Higher Lows.)
Since a picture’s worth a thousand words, lets look at the following chart:
This chart suggests that the trader should buy the currency pair (and close the
trade by selling at profit after the rate rises).
In a down trend, the price movements form a series of lower peaks and lower
valleys:
(Lower Highs and Lower Lows)
This chart suggests that the trader should sell the currency pair (and close the trade by buying at profit after the rate declines)











It’s important to note that during some trading days the trend is hard to spot, some trading days show no trend (the price movements form a Range), and of course you’re bound to run into the occasional reversal, so this is not a perfectly accurate or 100% reliable indicator for trading



It is easier to make predictions with a trend than with a trading range. While you
can still profit in trading ranges, you have to be more nimble on your feet, and
ready to jump in and out of the markets at all times. Needless to say, this makes
the trader’s life a lot tougher and the risk for loss greater.

Trading ranges can be really messy and unpredictable, which is why you should
always look for trading trends. It’s a good idea to stay out all together during a
range, and get back in only when the markets start to trend again.

As a general strategy, it is best to trade with the trend rather than against it,
meaning that if the general trend of the market is headed up, you should be very
cautious about taking any positions that rely on the trend going in the opposite
direction.

The trend spotting strategy assumes that the present direction of the price rate
will continue into the future. It can be used in three main time‐frames: short,
intermediate and long‐term, with the trends being different for each.

For example, here’s a possible scenario in the Forex market:
Over the last 12 months the trend for the EUR/USD is an uptrend, over the last 30
days the trend is a downtrend, and over the last 24 Hours (intra‐day) trend is an
uptrend.

Regardless of the chosen time frame, traders will remain in their position until
they believe the trend has reversed.
So the goal is to spot a trend that you believe in and trade according to it.

Needless to say, you will need to monitor the trade, in case you were mistaken
and the trend vanishes or reverses. Then it's time to cut your losses by closing the
losing trade or by reversing ‐ closing the trade and opening a following, opposite
trade.

Warning: Speculating on Forex rates involves great amount of risk. Be advised that
even the most sophisticated traders can't always predict market movements'
directions.