How to Use Proper Risk Management in Trading Forex

Leverages and Risks for Forex Trading

The currency market is no doubt a very attractive one and this is the reason why equity traders will often migrate to the Forex market. However, it would be wrong of these equity traders to presume that the formulas that worked in the equity market will work in the Forex arena too. In fact there are two main differences between the markets. One is risk management and the other is current events.

Forex Basic (4)

What's Pips
Once you have decided to open an account on the FOREX, you'll be given the option laverage how you will take, and how many pips profit target you plan and how many lots would you traded?
What the hell was pips, laverage and lots?
The most common increment of currencies is the Pip. If the EUR / USD moves from 1.2250 to 1.2251, that is ONE PIP. A pip is the last decimal place of a quotation, given that four decimal places are used (as some displays quotations of five or more decimal places, indicating a fraction of a pip). The Pip is how you measure your profit or loss.
As each currency has its own value, it is necessary to calculate the value of a pip for that particular currency. In currencies where the U.S. Dollar is quoted first, the calculation would be as follows.
Let's take USD / JPY rate at 119.80 (notice this currency pair only goes to two decimal places, most of the other currencies have four decimal places)
In the case of USD / JPY, 1 pip would be .01
Therefore,
USD / JPY:
119.80
.01 Divided by exchange rate = pip value
.01 / 119.80 = 0.0000834
This looks like a very long number but later we will discuss lot size.
USD / CHF:
1.5250
.0001 Divided by exchange rate = pip value
.0001 / 1.5250 = 0.0000655
USD / CAD:
1.4890
.0001 Divided by exchange rate = pip value
.0001 / 1.4890 = 0.00006715
In the case where the U.S. Dollar is not quoted first and we want to get the U.S. Dollar value, we have to add one more step.
EUR / USD:
1.2200
.0001 Divided by exchange rate = pip value
so
.0001 / 1.2200 = EUR 0.00008196
but we need to get back to U.S. dollars so we add another calculation which is
EUR x Exchange rate
So
0.00008196 x 1.2200 = 0.00009999
When rounded up it would be 0.0001
GBP / USD:
1.7975
.0001 Divided by exchange rate = pip value
So
.0001 / 1.7975 = GBP 0.0000556

But we need to get back to U.S. dollars so we add another calculation which is

GBP x Exchange rate

So
0.0000556 x 1.7975 = 0.0000998

When rounded up it would be 0.0001

The bottom line is the calculations pips profit from the smallest unit of FOREX transactions

Forex Basic (3)

basic forex discussion this time will directly discuss important terms in the forex, last week I have explained forex broker that is where we are trading forex. If we follow the forex broker, I suggest following the first virtual forex strategy and solidify your understanding of the forex, and nearly every online broker has a virtual forex / meta-trader.
When you start the forex either virtual or real trades, then you must open position (OP) in the position of selling or buying position (sell and or buy).

sell = SHORT: do if you feel that you open currency position will continue to fall. Marked with downward arrows in red
buy = LONG: do if you feel that you open currency position will continue to rise. Marked with arrows on the green.
bid and ask: suppose you take a sell position open, then you will take the price that is positioned in the "bid" whereas if you buy an open position, then the price is taken to be positioned on the "ask".
spread: the difference between bid and ask values, each of the forex brokers have spread values different.
see the image below (illustration)


Ok, important terms forex options I will explain later, to be continued.

Forex Basic (2)

Ok, after a discussion about how interesting and forex, we will proceed to a discussion of how to start?, What must be known and what steps that must be done in order to maximize profits and minimize losses in forex trading.
Forex trade in currencies of developed countries belonging to the G-8, so if you are a Mexico or Indonesia, the peso and rupiah are not traded in Forex, possible reasons for the developed world currencies are considered more stable conditions than the newly developing countries .

This is the currencies that traded in Forex:
EUR / USD: Euro exchange rate against the U.S. Dollar, it means 1 Euro equal to how many U.S. Dollar (example: EUR / USD = 1.35)
USD / JPY: U.S. Dollar exchange rate against Japan Yen, it means 1 U.S. Dollar is proportional to how Japan Yen (example: USD / JPY = 89.5)
GBP / USD: Great Britain Pound Sterling / U.S. Dollar
USD / CHF: U.S. Dollar / Switzerland Franc
USD / CAD: U.S. Dollar / Canadian Dollar
AUD / USD: Australian Dollar / U.S. Dollar
NZD / USD: New Zealand Dollar / U.S. Dollar
EUR / JPY: Euro / Japan Yen
EUR / GBP: Euro / Great Britain Pound Sterling
EUR / CHF: Euro / Switzerland Francs
GBP / JPY: Great Britain Pound Sterling / Japan Yen

Well, looks like the money changers, but the fact that forex trading is not as easy as just money. You must be registered in the sale of these money called a broker Forex.
At the present time in the era of technology and information, forex brokers no longer a sales person who go from house to house and then you wait and read the newspaper, but you can directly interact online, you've heard marketiva, e-toro, e-forex etc ? yup, that's what forex brokers online where you can make an interactive foreign exchange transactions, and profits can be obtained by joining marketiva, e-toro and others, you can practice virtual trading before and then after a few weeks when you're feeling understood the rules , terms and ways of trading forex, you can start real trading.
It's a bit difficult, but Forex is something fun to try to be one of your online business, happy reading, and discussion of forex will continue the next few days.

Forex Basic (1)

FOREX (FOREIGN EXCHANGE) may sound similiar among online business, especially for those who have large capital above $ 100, foreign exchange is a promising online business, with high risk also.
Why is Forex so profitable, even some of those get rich quick?

1. I demonstrated, if you exchange dollars at the money changer $ 200 to Rp2000000, but if you trade it in forex trading is the maximum possible benefits of money $ 200 is a $20000, with the greatest possible loss of your capital before (- $ 200), is fantastic! No wonder the owner of HYIP programs generally invest depositors' money in Forex trading

2. In buying and selling certain items you will sell it as high price, you may not sell when the price of goods low, but in the forex when the currency is low, will still provide benefits to our trading options depending on our choice (buy or sell )

At first glance look so easy forex, you are purchasing a foreign currency pips, and then you specify the position of selling and buying currencies depending on the situation at that time. In fact not that easy, maybe if you want to lose again and again you see enough time position based on the feeling and then you specify your forex trading position. the true feeling can only be sharpened by the knowledge and experience enough.
Ok to the terms in Forex I will discuss it later ... you'll never know forex before trying