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Igor
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Everything posted by Igor
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Market Reactions can come after events like interest rate changes from a central bank, a military conflict or a piece of economic data. The majority of market participants will control forex prices once the information is made public and the general direction that is seen can be described as the consensus reaction.
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Margin Calls often occur when traders use leverage excessively or do not manage their losses properly. Since a margin call will close all of your open trades, it is sometimes used as an informal stop loss level, but many trading experts advise against this practice.
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Margin Accounts essentially allow traders to make investments by using your brokers money. It should be remembered, however, that all gains and losses will come directly from the traders account balance, and the broker will assume no responsibility for any losses that are seen.
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Margin trading can have great benefits as well as major disadvantages. Brokers are very liberal with their margin offerings these days but reckless use of this credit can quickly deplete a trading account if traders see losing streaks.
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Manual trading can give traders a greater deal of control over their trading accounts. This can allow traders to use larger position sizes as there is less risk that an unwanted trade will be opened.
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Managed Forex Accounts are generally pursued by people who want to invest in the forex markets but do not have the time or expertise to do so. Managed Forex Accounts offer different levels of education and trader involvement, which allow the capital owners to actively monitor their money.
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The Major Pairs have characteristics that are not generally seen in less popular pairs. Some of these characteristics include lower volatility levels and lower spread prices, which makes trades in these currencies very attractive.
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The opposite of “Losing The Points”is “Earning the Points” which is seen when a trader buys a currency for one price and then sells that same currency later for an improved price. These trades require buying currencies in the spot market and then dealing with the forward market at a later time.
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The Loonie is often viewed as a counterpart of the US Dollar, with the most popularly traded currency pair being the USD/CAD. There are additional connections made to commodity currencies, however, as the Canadian economy is well-known for its oil and metals exports.
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Long Term Trades tend to hold onto their trades longer as a means for protecting against short term volatility. Many Long Term Trades suggests that shorter term moves are unpredictable, so to avoid this trades are opened that used wider stop losses and profit targets.
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While Long Dated Forward contracts are often used as hedging tools, they can also be very risky trading instruments. These risks come mostly from the possibility that the other party involved will not meet their contractual obligations.
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The London Spot Fix can be referred to by a few different names, such as the London Morning Fix, or the London Afternoon Fix. The London Spot Fixprovides markets with time parameters for determining the value of precious metals.
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A Liquidation Level is put in place as a protective measure that will prevent traders from losing their entire account value if their trades work unfavorably. If a trader wishes to prevent liquidation from occurring, the trader must add margin to the trading account in order to prevent all trades from closing.
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When a Linked Exchange Rate System is implemented, there is usually little that is done to alter the exchange rate. There are differences with these systems and currency pegs, however, as there are reserve requirements in holding the domestic currency in the foreign banks.
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Line Charts can give traders an accurate sense of the historical price values of a currency over a given period of time. These time frames can be altered to the traders liking and gives a simple representation of previous price activity.
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Limited Convertibility is seen in situations where the government is looking to control all aspects of a nation's currency. This can be done as a means for encouraging consumer growth domestically or to limit volatility in the exchange rate value.
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In the current trading environment, most forex brokers offer very generous leverage options that can allow traders to multiply their trading sizes by as much as 500:1. It should remembered that while gains can be grealtly increased with Leverage, losses can be increased as well, in equal numbers.
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An example of the Left-Hand Side can be seen in the EUR/USD bid ask price of 1.3000/1.3003. In this case, the Left-Hand Side can be seen at 1.3000.
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When a transaction is sped up, it is referred to as a “lead,” while transactions that are slowed down are called “lags.” Whether or not one of these situations occurs will depend on expectations for an increase or decrease in interest rates.
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The KOF Economic Barometer is used mostly by forex markets as a means for predicting long term growth levels in Switzerland . The indicator is generally known for creating short term volatility in currency pairs like the USD/CHF and the EUR/CHF.
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The term Kiwi is widely used in forex trading when referring to the New Zealand Dollar. The currency itself is also referred to as a “commodity currency” because of the large number of commodity exports that come from the country.
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Jurisdiction Risk are seen at their highest levels in areas that have no chosen to comply with the Financial Action Task Force. Jurisdiction Risk can also be seen in areas where widespread corruption and money laundering have become prevalent.
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Junk Currency is generally used as a term when inflation in a country is running rampant and markets begin to expect that the value of the currency will be severely weakened in the future. The term can also be used when a country is expected to abandon a currency at a later data in favor of another currency.
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The Jamaican Dollar is the official currency of Jamaica, given value by the region’s central bank. The Jamaican Dollarl can be broken down into 100 Cents and can be seen with the symbol $J or $JA. Traders investing in the IRR currency hold an optimistic view of the country’s macro economic fundamentals and the value and allocation of the countries natural resources. Price levels are heavily influenced by inflation rates, and the low liquidity levels of this currency make it unavailable in many regions.
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The Japanese Yen is the official currency of Japan, given value by the region’s central bank. The Rial can be broken down into 100 Sen and was first used in 1872. Traders investing in the JPY currency hold an optimistic view of the country’s macro economic fundamentals and the value and allocation of the countries natural resources. Interest rates for the Yen are low historically, so traders often use it as a funding currency in carry trades.
