ForexGen Fundamental strategies, technical analysis and risk management techniques

You can learn all these strategies either by learning the various steps yourself or by joining a training course. If you decide to learn on your own, then you may require some time before you get the hang of using them or before you formulate some strategies of your own. If you decide to join a training course, then you can learn all the strategies from an experienced trader and learn to use these strategies in the market during the course itself.

There are several training institutes out there who have associated themselves with the best forex dealers in the market currently. These institutes bring you up to speed with all the latest tools being used in the market these days. They will help you evolve your own trading strategies that you can use to make profits in the market.

Some of the institutes also allow you to trade on some of the best platforms with the best traders that these institutes have associated themselves with. The institutes help you in learning the fundamentals of devising your own strategy. They will teach all the basic terms and definitions and update you with the latest developments in technical analysis. They stress on risk management as this is one of the most fundamental factors of forex trading.

Different levels of courses are offered by these institutes. Most of the courses are aimed at the novice trader where they teach you all the basic concept and strategies. In the advanced courses, complex strategies are discussed and its use is practised. They will also teach you various risk management strategies and money management techniques. They build the psychological edge you need to succeed while trading in the forex market. They also have courses aimed at the various corporate who want to protect their exposure to the foreign currency by building positions in the market that hedges their various foreign currency exposures.

These institutes also offer you the choice of learning through the internet which are also known as virtual classrooms or through various physical classrooms. You can choose any of the above options depending upon the one which will suit you the most. If you feel like you need one-to-one coaching and help while trading in the markets then the physical classroom is the choice to make. Another advantage of choosing physical classroom is the amount of networking that you can do while attending the course. This will stand in good stead as you will be able to discuss any future trades with these people.

Forex training is really useful and any opportunity to attend such a training course should not be wasted. If you want to trade in the forex market and make money but you are unsure of yourself, then you should attend a training course as this will put you in the path to making large amounts of profits.

Read More With ForexGen

Foreign Exchange as a Financial Market

Currency exchange is very attractive for both the corporate andindividual traders who make money on the Forex - a special financialmarket assigned for the foreign exchange. The following featuresmake this market different in compare to all other sectors of theworld financial system:• heightened sensibility to a large and continuously changingnumber of factors;• accessibility to all traders in the major currencies;• guaranteed quantity and liquidity of the major currencies;• increased consideration for several currencies, round-the clockbusiness hours which enable traders to deal after normal hours orduring national holidays in their country finding markets abroad openand• extremely high efficiency relative to other financial markets.This goal of this manual is to introduce beginning traders to all theessential aspects of foreign exchange in a practical manner and to bea source of best answers on the typical questions as why are currencies being traded, who are the traders, what currencies dothey trade, what makes rates move, what instruments are used forthe trade, how a currency behavior can be forecasted and where thepertinent information may be obtained from. Mastering the content ofan appropriate section the user will be able to make his/her owndecisions, test them, and ultimately use recommended tools andapproaches for his/her own benefit.

Find Out More

Foreign Exchange in a Historical Perspective | ForexGen Tips

Currency trading has a long history and can be traced back to theancient Middle East and Middle Ages when foreign exchange startedto take shape after the international merchant bankers devised billsof exchange, which were transferable third-party payments thatallowed flexibility and growth in foreign exchange dealings.The modern foreign exchange market characterized by theconsequent periods of increased volatility and relative stability formeditself in the twentieth century. By the mid-1930s London became tobe the leading center for foreign exchange and the British poundserved as the currency to trade and to keep as areserve currency.Because in the old times foreign exchange was traded on the telexmachines, or cable, the pound has generally the nickname “cable”. In1930, the Bank for International Settlements was established inBasel, Switzerland, to oversee the financial efforts of the newlyindependent countries, emerged afterthe World War I, and to provide monetary relief to countriesexperiencing temporary balance of payments difficulties.After the World War II, where the British economy was destroyedand the United States was the only country unscarred by war, U.S.dollar became the prominent currency of the entire globe. Nowadays,currencies all over the world are generally quoted against the U.S.dollar.

Find Out More

Futures Market | ForexGen Tips

Currency futures are specific types of forward outright deals whichoccupy in general a small part of the Forex market (See Figure 3.1).Because they are derived from the spot price, they are derivativeinstruments. They are specific with regard to the expiration date andthe size of the trade amount. Whereas, generally, forward outrightdeals—those that mature past the spot delivery date—will mature onany valid date in the two countries whose currencies are beingtraded, standardized amounts of foreign currency futures matureonly on the third Wednesday of March, June, September, andDecember.There is a row of characteristics of currency futures, which makethem attractive. It is open to all market participants, individualsincluded. This is different from the spot market, which is virtuallyclosed to individuals - except high net-worth individuals—because ofthe size of the currency amounts traded. It is a central market, justas efficient as the cash market, and whereas the cash market is avery decentralized market, futures trading takes place under oneroof. It eliminates the credit risk because the Chicago MercantileExchange Clearinghouse acts as the buyer for every seller, andvice versa. In turn, the Clearinghouse minimizes its own exposure byrequiring traders who maintain a non-profitable position to postmargins equal in size to their losses.Moreover, currency futures provide several benefits for tradersbecause futures are special types of forward outright contracts,corporations can use them for hedging purposes. Although thefutures and spot markets trade closely together, certain divergencesbetween the two occur, generating arbitraging opportunities. Gaps,volume, and open interest are significant technical analysis toolssolely available in the futures market. Yet their significance extrapolates to the spot market as well.Because of these benefits, currency futures trading volume hassteadily attracted a large variety of players.For traders outside the exchange, the prices are available from onlinemonitors. The most popular pages are found on Bridge, Telerate,Reuters, and Bloomberg. Telerate presents the currency futures on28composite pages, while Reuters and Bloomberg display currencyfutures on individual pages shows the convergence between thefutures and spot prices.

Find Out More

Forward Market | ForexGen Tips

The forward currency market consists of two instruments: forwardoutright deals and swaps. A swap deal is unusual among the rest ofthe foreign exchange instruments in the fact that it consists of twodeals, or legs.26All the other transactions consist of single deals. In its original form,a swap deal is a combination of a spot deal and a forward outrightdeal. Generally, this market includes only cash transactions.Therefore, currency futures contracts, although a special breed offorward outright transactions, are analyzed separately.According to figures published by the Bank for InternationalSettlements, the percentage share of the forward market was 57percent in 1998 (See Figure 3.1). Translated into U.S. dollars, out ofan estimated daily gross turnover of US$1.49 trillion, the totalforward market represents US$900 billion.In the forward market there is no norm with regard to the settlementdates, which range from 3 days to 3 years. Volume in currency swaps longer than one year tends to be light but, technically, there is noimpediment to making these deals. Any date past the spot date andwithin the above range may be a forward settlement, provided that itis a valid business day for both currencies. The forward markets aredecentralized markets, with players around the world entering into avariety of deals either on a one-on-one basis or through brokers. Incontrast, the currency futures market is a centralized market, inwhich all the deals are executed on trading floors provided bydifferent exchanges.Whereas in the futures market only a handful of foreign currenciesmay be traded in multiples of standardized amounts, the forwardmarkets are open to any currencies in any amount. The forward priceconsists of two significant parts: the spot exchange rate and theforward spread. The spot rate is the main building block. The forwardprice is derived from the spot price by adjusting the spot price withthe forward spread, so it follows that both forward outright and swapdeals are derivative instruments. The forward spread is also knownas the forward points or the forward pips. The forward spread isnecessary for adjusting the spot rate for specific settlement datesdifferent from the spot date. It holds, then, that the maturity date isanother determining factor of the forward price. Just as in the case ofthe spot market, the left side of the quote is the bid side, and theright side is the offer side.

Find Out More

Spot Market | ForexGen Tips

Currency spot trading is the most popular foreign currencyinstrument around the world, making up 37 percent of the total activity The fast-paced spot market is not for the fainthearted, as it featureshigh volatility and quick profits (and losses). A spot deal consists of abilateral contract whereby a party delivers a specified amount of agiven currency against receipt of a specified amount of anothercurrency from a counterparty, based on an agreed exchange rate,within two business days of the deal date. The exception is theCanadian dollar, in which the spot delivery is executed next businessday.Trading 24The name "spot" does not mean that the currency exchange occursthe same business day the deal is executed. Currency transactions that require same-day delivery are called cash transactions. The twodayspot delivery for currencies was developed long before technological breakthroughs in information processing.This time period was necessary to check out all transactions' detailsamong counterparties. Although technologically feasible, thecontemporary markets did not find it necessary to reduce the time tomake payments.

Find Out More

Kinds Of Exchange System | ForexGen Tips

Trading with Brokers Foreign exchange brokers, unlike equity brokers, do not take positions for themselves; they only service banks. Their roles are:• bringing together buyers and sellers in the market;• optimizing the price they show to their customers;• quickly, accurately, and faithfully executing the traders' orders.•The majority of the foreign exchange brokers execute business viaphone. The phone lines between brokers and banks are dedicated, ordirect, and are usually in-stalled free of charge by the broker. A foreign exchange brokerage firm has direct lines to banks around theworld. Most foreign exchange is executed through an open boxsystem—a microphone in front of the broker that continuouslytransmits everything he or she says on the direct phone lines to thespeaker boxes in the banks. This way, all banks can hear all the dealsbeing executed. Because of the open box system used by brokers, atrader is able to hear all prices quoted; whether the bid was hit orthe offer taken; and the following price. What the trader will not beable to hear is the amounts of particular bids and offers and thenames of the banks showing the prices. Prices are anonymous theanonymity of the banks that are trading in the market ensuresthe market's efficiency, as all banks have a fair chance to trade.Brokers charge a commission that is paid equally by the buyer andthe seller. The fees are negotiated on an individual basis by the bankand the brokerage firm.Brokers show their customers the prices made by other customerseither two-way (bid and offer) prices or one way (bid or offer) pricesfrom his or her customers. Traders show different prices becausethey "read" the market differently; they have different expectationsand different interests. A broker who has more than one price on oneor both sides will automatically optimize the price. In other words,17the broker will always show the highest bid and the lowest offer.Therefore, the market has access to the narrowest spread possible.Fundamental and technical analyses are used for forecasting thefuture direction of the currency. A trader might test the market byhitting a bid for a small amount to see if there is any reaction.Brokers cannot be forced into taking a principal's role if the nameswitch takes longer than anticipated.Another advantage of the brokers' market is that brokers mightprovide a broader selection of banks to their customers. SomeEuropean and Asian banks have overnight desks so their orders areusually placed with brokers who can deal with the American banks,adding to the liquidity of the market.

Find Out More

Fibonacci Extension | ForexGen Tips

what is fibonacci and how to use it in the world of FX?
Leonardo Fibonacci was a 13th century mathematician who noted that there are certain ratios that tend to occur repeatdly in nature . The common ones that he identified were 38.2%, 50%, and 61.8%.For example, the distance from your fingertips to your wrist is 38.2% of the distance from your fingertips to your elbow. There is overwhelming evidence of Fibonacci ratios operating throughout nature.These are not always perfect, but surprisengly they work more than just often!! Many people have argued about why these work, but my opinion is that all the large institutions use them, so you might as well buy or sell at the same levels that they do and if these levels don’t hold you can get out with a small loss.

Find Out More

Exponential Moving Average EMA | ForexGen Tips

In order to reduce the lag in simple moving averages, technicians often use exponential moving averages (also called exponentially weighted moving averages). exponential moving average reduce the lag by applying more weight to recent prices relative to older prices. The weighting applied to the most recent price depends on the specified period of the moving average. The shorter the exponential moving average’s period, the more weight that will be applied to the most recent price.
For example: a 10-period exponential moving average weighs the most recent price 18.18% while a 20-period EMA weighs the most recent price 9.52%. As we will see, the calculating and exponential moving average is much harder than calculating an simple moving average. The important thing to remember is that the exponential moving average puts more weight on recent prices.exponential Moving Average Calculation Exponential Moving Averages can be specified in two ways - as a percent-based exponential.

Find Out More

Simple Moving Average (SMA)

the simple moving average is formed by calculating the average price of a security over a particular number of periods. While it is possible to create moving averages from the Open, the High and the Low data points, most moving averages are created using the closing price.
For example: a 4-day simple moving average is calculated by adding the closing prices for the last 4 days and dividing the total by 4.11+ 12 + 13 + 14 = 50(50 / 4) = 12.5The calculation is repeated for each price bar on the chart. The averages are then joined to form a smooth curving line - the moving average line. Continuing our example, if the next closing price in the average is 15, then this new period would be added and the oldest day.

Find Out More

Moving Averages Summary | ForexGen Tips

Moving averages are one of the most famous tools and also the easisest tool used by many traders.We can find many types of moving averages .the 2 most popular types are: Simple Moving Average and Exponential Moving Average.• The simple form of moving average (SMA) will be the simple moving average, is formed by computing the average = price of a security over a number of periods• Exponential moving averages: EMA’s reduce the lag by applying more weight to recent prices relative to older prices.• The best way to use moving averages is to plot different types on a chart so that you can see both long term movement and short term movement.

Whats the trading system | ForexGen Tips

It seems that everywhere you look, you see advertisements for software promising accurate buyand sell signals and profits with every trade. Just have a look at some captions of the adverts Ihave seen!“I’ve Finally Cracked the Forex Code”“ Make thousand pips every month”“ Trade Forex with a secret formula that only a handful of Traders use”The list is endless.. These so-called killer systems don’t come cheap, costing you thousands tobuy. However with just a little bit of effort, you too can “crack this secret code” yourself.Once again let me assure you, from my experience and knowledge of being a trader for the past20 years, that there is “NO Secret Code”, “NO Killer Systems”, “NO Holy Grail”, and “No UniqueDiscoveries”.In my opinion most of these adverts are no more than scams. It may not make YOU rich, but itwill certainly make the Vendor’s millionaires. Most of these secrets and codes or discoveries arereadily available to you. The only secret is that YOU don’t know how to use these simplestrategies! Or nobody has shown you how to use them correctly.This is precisely what I am going to do in my book – “ The way to Trade Forex”, I hope to holdyour hand and show you step by step how to create a killer trading system of your own. However,the fact is that many traders are simply lazy and cannot make time to plan or create a system.YOU have a choice, either become a winning trader or continue to lose money!What Is a Trading System?A trading system is simply a group of specific rules, or parameters, that determine entry and exitpoints for your trade. These points, known as signals, are often marked on a chart in real timeand will prompt you to pull the trigger.Here are some of the most common tools used to construct a trading system-1. Chart Patterns1. Moving Averages1. Stochastics1. Oscillators1. Relative Strength1. Bollinger Bands10

Find Out More

Channels | ForexGen Tips

There are 2 types of channels in the forex market :1-If you want to create a down channel, it may also be called a descending channel, you can simply draw a line at the same angle as the downtrend and after that move the line to a new place where it can reach the most recent both valley.
For the both channels ,it should be done at the same time to you to create the trend line.It may be a sell signal when the prices hit the up trend line and it can be a buy signal when the prices hits the down trend line

Find Out More

Support And Resistance | ForexGen Tips

The concepts of support and resistance are undoubtedly two of the most important and highly discussed attributes of technical analysis and they are often regarded as a subject that is complex by those who are just learning to trade.
Most experienced traders will be able to tell many stories about how certain price levels tend to prevent traders from pushing the price of an underlying asset in a certain direction.Most technical traders incorporate the power of various technical indicators such as moving averages, to aid in predicting future short-term momentum, but these traders never fully realize the ability these tools have for identifying levels of support and resistance

Find Out More

Leading vs. Lagging Indicators | ForexGen Tips

Leading vs. Lagging Indicators
Leading IndicatorsAn index published monthly by the Conference Board used to predict the direction of the economy’s movements in the months to come. The index is made up of 10 economic components, whose changes tend to precede changes in the overall economy.These 5 components include:1. the average weekly hours worked by manufacturing workers.2. The average number of initial applications for unemployment insurance.3. The amount of manufacturer’s new orders for consumer goods and materials.4. The speed of delivery of new merchandise to vendors from suppliers.5. The amount of new orders for capital goods unrelated to defense.

Find Out More

The Million Dollar Question

How do you figure out whether to freakin’ use oscillators, or trend following indicators, or both? After all, we know they don’t always work in tandem.For now, just know that once you’re able to identify the type of market you are trading in, you will then know which indicators will give accurate signals, and which ones are worthless at that time.
Summary There are two types of indicators: leading and lagging.A leading indicator gives a buy signal before the new trend or reversal occurs.A lagging indicator gives a signal after the trend has started .Technical indicators into one of two categories: Oscillators and trend following or momentum indicators.

Find Out More

Double Bottom | ForexGen Tips

A charting pattern used in technical analysis. It describes the drop of a stock (or currency), a rebound, another drop to the same (or similar) level as the original drop, and finally another rebound.The twice touched low is considered a support level.Most technical analysts believe that the advance off of the first bottom should be 10-20%. The second bottom should form within 3-4% of the previous low, and volume on the ensuring advance should increase.

Find Out More

ForexGen Putting it all Together

In a perfect world, we could take just one of these indicators and trade strictly by what that indicator told us. The problem is that we DON’T live in a perfect world, and each of these indicators has imperfections. That is why many traders combine different indicators together so that they can “screen” each other.
We urge you to study each indicator on its own until you know EXACTLY how it reacts to price movement, and then come up with your own combination that fits your trading style. Later on in the course, we will show you a system that combines different indicators to give you an idea of how they can compliment each other.
Everything you learn about trading is like a tool that is being added to your trader’s toolbox. Your tools will make it easier for you to “build” your trading account

Find Out More

Trading The News | ForexGen Tips

Is a popular technique in the forex markets … Everyone wants to trade the news as you can see currency pairs move dramatically within seconds after the release of major news like “The US Retail Sales” and others and it responds not only to U.S. economic news, but also to news from around the world. That’s easy money! Depending on how are you trading this news. So for those who want to trade news there are plenty of opportunities and you will be able to know different strategies through this lesson.Our goal is to make the most of your trading knowledge and we willl provide you with all of the steps needed to know how to trade the news.

Find Out More

Getting Sentimental With Forex Trading | ForexGen Tips

Sentimental analysis is what it sounds like – gauging the market sentiment. What does that mean? Well, as traders, a part of our job is to determine if a market is bullish, bearish, overbought, oversold, and to plan a trade for those market conditions – basically putting all of the things we’ve learned up until this point all together. So how do we do that? What tools can we use? And how do we react to certain conditions? Well, that’s what we’re going to find out today – we’re going to take a look into sentiment analysis in forex trading.Now there are a couple of ways to gauge different market conditions. Does anyone know what those two things are? You guessed it: technical and fundamental analysis. Now, in the School of Pipsology, we’ve covered most of the commonly used technical indicators out there for forex trading, so you should be an expert at that already right.

Find Out More

Psychology | ForexGen Tips

A trading psychology, it is based on how well you know yourself and are able to gain from your strong points, as well as to have power over you weak ones, has much to do with how successful trader you will be. When you really know yourself, then you are familiar of how you are going to react under specific circumstances and you can protect yourself from self-damaging actions or decisions when it comes to managing a trade.The overlapping of psychology and trading is complex. Psychological factors, such as execution of an action with overwhelming sense of apprehension and fear, can interfere with clear-headed decision-making about markets. Many traders put their money at risk without a explainable edge. It is difficult to imagine such kind of trading *not* originate frustration over time. Other traders lock themselves in solid methods, but these may not be accepted with their talents, personalities or skills.

Capital aka cash money

Money is required to make money. All of us know that, but how much does it need to start trading? It totally depends on how you are going close to your new start-up business.Firstly, keep in mind how you are going to be educated. There is a lot of ways to learn how to trade: mentors, classes, by yourself, or to combine between the three.As there are many mentors and classes out there ready to teach Forex trading, most of them will charge fees. The benefits of them is that a well-taught class or great mentor can defiantly shorten your learning curve and gets you on the way of profitability in a very short time in comparing it with doing it on your own.The negative aspect is the pre-paid cost for these programs, which could varies from hundreds to thousands, it depends on which program you choose. For those who are new to trading, the requirement (cash money) to get these programs is not available.

Find Out More

How Does The Carry Trade Work For Forex | ForexGen Tips

As a forex trader you know that forex trade in pairs, for example you trade USD/JPY that mean’s buying a US dollar and sell JP Yen. So you pay for JPY and collect the USD.Technically, all positions are closed at the end of the day in the spot forex market. Brokers close and reopen your position, and then they debit/credit you the overnight interest rate difference between the two currencies.The amount of leverage available from forex brokers has made the carry trade very popular in the spot forex market. Forex trading is completely margin based, meaning you only have to put up a small amount of the position and you broker will put up the rest.

The Carry Trade | ForexGen Tips

A strategy in which an investor sells a certain currency with a relatively low interest rate and uses the funds to purchase a different currency yielding a higher interest rate. A trader using this strategy attempts to capture the difference between the rates - which can often be substantial, depending on the amount of leverage the investor chooses to use. Here’s an example of a “yen carry trade”: let’s say a trader borrows 1,000 yen from a Japanese bank, converts the funds into U.S. dollars and buys a bond for the equivalent amount. Let’s assume that the bond pays 4.5% and the Japanese interest rate is set at 0%. The trader stands to make a profit of 4.5% (4.5% - 0%), as long as the exchange rate between the countries does not change. Many professional traders use this trade because the gains can become very large when leverage is taken into consideration.

Find Out More

What Is the U.S Dollar Index | ForexGen Tips

If you’ve traded stocks, you’re familiar with all the indices available such as the Dow Jones Industrial Average (DJIA), NASDAQ Composite Index, Russell 2000, S&P 500, Wilshire 5000, and the Nimbus 2001. Oh wait, the last one is actually Harry Potter’s broomstick. Well if U.S. stocks have an index, the U.S. dollar can’t be outdone. For currency traders like us, we have the U.S. Dollar Index (USDX).The U.S. Dollar Index consists of a geometric weighted average of a basket of foreign currencies against the dollar. Come again?! Okay before you fall asleep on us after that super geeky definition, let’s break it down. It’s very similar to how the stock indices work in that it provides a general indication of the value of a basket of securities. Of course, the “securities” we’re talking about here are other major world currencies. The BasketThe U.S. Dollar Index consists of six foreign currencies.

Find Out More

How To Use The COT Report

In this section we will show you how to use the Commitment of Traders (COT) reports to accomplish this goal as we will skillfully explain how to break down the COT data into producers, consumers, and funds so you understand the positions and activities of these key market participants. In addition, you will be able to detect position imbalances that could be harbingers of major trend changes.By analyzing the data provided by the COT report, traders can see the market participants prepared or positioned themselves ahead of significant market turning points and in front of extensive bull and bear markets.tracks the positions (longs and shorts) held by all market participants, my analysis further breaks down this data and applies proprietary statistical measurements and indicators to identify trading opportunities. We combine these indicators with proprietary price indicators and graphically present the results to you.

Find Out More

Commetment Of Traders Report

The Commitments of Traders (COT) reports can be a very powerful trading tool to help anticipate market direction as it provides a breakdown of each Tuesday’s open interest for market reports in which 20 or more traders hold positions equal to or above the reporting levels established by the CFTC., and it measures the net long and short positions taken by traders in the futures market. Of course, it is very important to know that For reportable positions, additional data is provided for commercial and non-commercial holdings, spreading, changes from the previous report, percents of open interest by category, and numbers of traders
The report is pretty straight forward, but here’s a quick run down of what each category is.• Non-Commercial – Traders such as individual traders, hedge funds, and financial institutions. who are looking to trade for speculative gains.• Commercial - These are the big businesses that describes an entity involved in the production, processing, or merchandising of a commodity that uses currency futures to hedge.

Find Out More