More again about trading currencies in Forex

Currencies are traded on a price interest point (pip) system. Each currency pair has its own pip value. Since we have a listed currency PAIR (i.e., EUR/USD, EUR/AUD), we need a way to talk about its associated number or price. When you see a FOREX price quote, you'll see something listed like this:
USD/JPY: 118:46/51
The first bit (before the slash) refers to the bid price (what you obtain in JPY when you sell USD). In this example, the bid price is 118.46. The second bit (after the slash) is used to obtain the ask price (what you have to pay in JPY if you buy USD). In this example, the ask price is 118.51. The difference between the bid and the ask price is referred to as the spread (how brokers REALLY allow you to trade commission-free). In the example above, the spread is 0.05, or 5 pips.

Sometimes you won't see a two-sided quote, consisting of a 'bid' and 'offer'. But, rather, you'll see something like:
USD/JPY: 123.50
When you see a Forex currency pair price quote, like the one above, just remember that the last digit of the price is referred to as the *pip*. So if you see a quote (123.50)and then a quote in one minute of (123.51), the price rose 1 pip. Similarly, if you see a price quote of 187.50 and then after 5 minutes it's (187.58), the price rose 8 pips. The pip is always the last decimal place of the currency price quote.

Your goal in Forex trading is to capture as many profitable pips as possible.

Since the US dollar is the centerpiece of the Forex market, it is normally considered the 'base' currency for quotes. In the "Majors" (this includes USD/JPY, USD/CHF and USD/CAD) and many others, quotes are expressed as a unit of $1 USD per the second currency quoted in the pair. In the example above, a quote of USD/JPY 123.50 means that one U.S. dollar is equal to 123.50 Japanese yen. When the U.S. dollar is the base unit and a currency quote goes up, it means the dollar has appreciated in value and the other currency has weakened. If the USD/JPY quote above increases to 124.01, the dollar is stronger because it will now buy more yen than before. The three exceptions to this rule are the British pound(GBP), the Australian dollar (AUD) and the Euro (EUR). In these cases, you might see a quote such as GBP/USD 1.4366, meaning that one British pound equals 1.4366 U.S. dollars. In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar. In other words, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening.

Currency pairs that do not involve the U.S. dollar are called cross currencies, but it works exactly the same. For example, a quote of EUR/JPY 127.95 signifies that one Euro is equal to 127.95 Japanese yen.

I hope this will help you if you are unsure about Forex trading works. The more you get into it the more familiar with the terminology you become and the easier you find it! Of course it works the same whichever Forex trading system you are using. But if you are using the
5EMAS Forex System you will find you are at a big advantage, because it tells you EXACTLY what to do step-by-step, to have the best chance of making a profit! So do have a look at the 5EMAS system and see what you think. And find out more about Forex trading from
http://www.bizwrite.co.uk/Forex/forexindex.html

More about how currencies are traded in Forex

Currencies are always traded in pairs in the FOREX. The pairs have a unique notation that expresses what currencies are being traded.

Here are some of the common symbols used in the Forex: USD - The US Dollar; EUR - The currency of the European Union "EURO"; GBP - The British Pound; JPy - The Japanese Yen; CHF - The Swiss Franc; AUD - The Australian Dollar; CAD - The Canadian Dollar. There are symbols for other currencies as well, but these are the most commonly traded ones.

A currency can never be traded by itself. So you can't ever trade a EUR by itself. You always need to compare one currency with another currency to make a trade possible. Some of the common pairs are:
EUR/USD Euro / US Dollar"Euro"
USD/JPY US Dollar / Japanese Yen"Dollar Yen"
GBP/USD British Pound / US Dollar"Cable"
USD/CAD US Dollar / Canadian Dollar"Dollar Canada"
AUD/USD Australian Dollar/US Dollar"Aussie Dollar"
USD/CHF US Dollar / Swiss Franc"Swissy"
EUR/JPY Euro / Japanese Yen"Euro Yen"

The listed currency pairs above look like a fraction. The numerator (top of the fraction or "left" of the / - however you want to see it) is called the base currency. The denominator (bottom of the fraction or "right" of the/ - however you want to see it) is called the counter currency. When you place an order to buy the EUR/USD, for instance,you are actually buying the EUR and selling the USD. If you were to sell the pair, you would be selling the EUR and buying the USD. So if you buy or sell a currency PAIR, you are buying/selling the base currency. You are always doing the opposite of what you did to base currency with the counter currency.

If this seems confusing don't worry. You can always get by with just thinking of the entire pair as one item. Then you are just buying or selling that one item. Thinking like this will still enable you to place trades. (You only need to be aware of the base/counter concept for Fundamental Analysis reasons - i.e. using various factors to predict currency movements.)

If you are using the 5EMAS Forex system you have even less reason to worry, as the e-book will guide you through all the initial steps and explain the terms. They will then guide you to placing a trade using their unique system. So give the 5EMAS Forex system a try and once you find you are making profits, you'll get hooked like the rest of us!

Plus you can learn more at http://www.bizwrite.co.uk/Forex/forexindex.html

Understanding trends in Forex trading

The 5EMAS Forex System depends on understanding trends.
There are two types of market: trending and trend-less.

Trending - Steady elongated price movements with less than a 45-degree angle with occasional pauses, profit taking, or resting periods.

In a Trending market, you have:-
Uptrends - A pattern of higher highs and higher lows.-

Downtrends - A pattern of lower lows and lower highs.

Trend-less - Erratic price movements which are often steep (greater than 45-degree angle) and cannot be sustained, so must reverse. Although the movements can move many points in a short period of time, they often result in very little net price movement over time.

In a Trend-less market, you have:-
Choppy - An erratic pattern of higher highs and lower lows.-
Sideways - A narrow pattern of lower highs and higher lows.

While up-trend and down-trend days can offer excellent trading results, choppy markets often create stop-outs, while sideways markets produce little in either direction. Your trading objective is to get into a trending market and ride until you make your target objective.

If all this sounds a bit mysterious, you will find it's all explained in the 5EMAS Forex system book. It will teach you not only how to identify trends, but when it's appropriate to trade AGAINST trends - which is so much more profitable as long as you know what you're doing! NO OTHER SYSTEM teaches you this as far as I know (let me know if I'm wrong!) If I'm right, you can do better with the 5EMAS Forex system than with any other Forex trading system or any other Forex training package. Give it a try as you can't lose with their cast-iron guarantee.

And learn more about Forex at http://www.bizwrite.co.uk/Forex/forexindex.html

Where are you going in 2008?

Hallo - I do hope you had a great Christmas - or an enjoyable time of holiday and relaxation if you don't celebrate Christmas!

Now that it's over, we can all start to think about what we achieved in 2007 and where we're going in the next 12 months. For myself, I can honestly say that the best thing I did in 2007 was get involved in Forex trading. And this is in spite of the fact that for a long time I was sure it wasn't for me. I hesitated for ages because I was nervous about taking the plunge. And to be honest, my first trades weren't all that successful! This was largely because I am a hesitant person, and time and time again I failed to take the trade when the signals were right. But I have improved and have ended the year in profit!

If you are like me and nervous about taking risks, don't assume that Forex trading isn't for you. It just means you need to find the right Forex trading system. That's why I really recommend the 5EMAS Forex system - because it's ideal for beginners AND it provides excellent Forex trading training.

If you have any questions please don't hesitate to get in touch, I will do my best to answer if I can! Also you can learn more about Forex in general at

http://www.bizwrite.co.uk/Forex/forexindex.html

How do I recognize a trend in Forex trading?

Yesterday we explained how to trade with pullbacks in market trends. Today we are going to explain more about how to recognize and predict market trends. These are some of the techniques:
Moving averages Moving averages are used to emphasize the direction of a trend. A moving average indicates the average price at two given points in time, over a defined period of time intervals. So when the price falls below its moving average, it’s a signal to sell, and when it rises above its moving average, it’s a signal to buy. There are several kinds of moving average, including simple, weighted and exponential. The exponential moving average is the most often chosen as it takes into account both the most recent data, and the entire time period, and it is the one specifically used in the 5EMAS Forex System.

Moving average convergence/divergence (MACD) - a more detailed way of using exponential moving averages to detect price swings. This technique plots the difference between a 26-day and a 12-day exponential moving average. It takes a 9-day moving average as a trigger line, so that below this would be a “sell” signal and above this would be a “buy” signal. The MACD is often used in conjunction with other indicators such as the RSI.

Relative Strength Index (RSI) This compares recent gains with recent losses to detect whether the market is overbought or oversold. The higher the number – i.e. 70 or more on a scale of 1-100 – the more overbought the market is, and the lower the number – 30 or less on a scale of 1-100 – the more oversold it is. The RSI is what is called a “leading” indicator – that is, it enables you to see what the market is about to do, and act accordingly.

Bollinger Bands These are plots on a graph, plotted two standard deviations above and below a simple moving average. The principle is that the spacing between them varies according to the volatility of the market. So when the markets become more volatile, the distance between the bands widens, and when they become less volatile, the spacing narrows. The closer prices move to the upper band, the more overbought the market is – indicating “sell” – and the closer they move to the lower band, the more oversold the market is, indicating a “buy” signal.

There are many more techniques but these are some of the most important ones. Successful Forex traders use three or four - if they all point in the same direction, it's a clear signal to trade. The 5EMAS Forex system uses very specific techniques to recognize trends and pullbacks, and you will be shown exactly step by step how to do it for maximum profit. Also you can learn more about Forex trading generally at http://www.bizwrite.co.uk/Forex/forexindex.html

More about trading pullbacks with 5EMAS Forex

As we pointed out yesterday, the unique feature of the 5EMAS Forex System - which is a different type of Forex trading system - is around trading pullbacks, and we defined what a "pullback" actually means.

Today we go into more detail about what trading pullbacks actually involves. Basically there are five stages:

1. Identifying or recognizing the general trend. For the purpose of this type of currency trading, you are looking for an up-trend.


2. Identifying the beginning of a falling back or "pullback" from the general trend.


3. Wait for the end of the pullback.


4. Use an indicator - e.g. moving averages convergence/divergence - to confirm that the pullback is really at an end.


5. Open a trade, making sure you use stop-loss and take-profit orders.

I must emphasize that to understand EXACTLY how to do this type of trading to make sure you end up in profit, you have to use the 5EMAS Forex system itself. So do take a look at it. The 5EMAS Forex system is a Forex trading system that is different from the others on the market and is specially designed to help you get into currency trading.

But in the next few posts, I will go into more detail about how to recognize a trend in currency trading, how to use an indicator, what stop-loss and take-profit orders are, etc. I know these things sound very mysterious if you haven't yet got into the (incredibly exciting!) world of Forex trading. To find out more about it go to http://www.bizwrite.co.uk/Forex/forexindex.html

Trading against pullbacks with 5EMAS

You have probably realized by now that the 5EMAS Forex system provides a unique approach to Forex trading - this approach involves trading against pullbacks.

So what is a pullback?

A pullback is a falling back of a price from its peak. This is sometimes a temporary reversal of a general upward trend. But it could be a sign of a trend reversal. So it is necessary to analyze it closely.

Tomorrow I will explain more about what "trading against pullbacks" actually involves. But just remember meanwhile that the 5EMAS Forex System is the only system that I know of that provides this approach and so using this gives you a massive competitive advantage. So do have a look at 5EMAS, and find out more about Forex in general from http://www.bizwrite.co.uk/Forex/forexindex.html