Posted on 11 April 2011
Tags: analysis, average true range, Better, breakout, chemistry, Conditions, consideration, consistent profits, currency, currency pairs, currencyÂ, day trade, day trader, Day traders, dependsÂ, destination, direction, easierÂ, entry, exit points, forex, Forex trading, forex trading system, Forward, GBP, gbp usd, general tactics, instance, instincts, known fact, Long term trades, long tim, long time, Major Currency, major currency pairs, make money, market, marketing, marketing conditions, Method, Necessary, necessary precautions, Overnight, overnight trading, Pip, plenty, plenty of room, probability, profit, profitable, quickÂ, range indicator, short term trader, situation, Small, Technical, technical analysis, term trader, term trades, three months, Trade, trades, Trading, trading ranges, trend, True, Understand, understanding, US, USD, utmost desire
One of the basic and foremost instincts of a human being is to earn more and more profits. Making a profit greatly depends upon market conditions and general tactics. There are some useful steps which if being followed will help a lot, in understanding the chemistry of these marketing conditions and to get some consistent profits from forex trading.
Day Traders
Most of us prefer being day traders, and it is the utmost desire and necessity to earn some profit by the end of the day. Being an efficient day trader, for instance, one should have in mind the average daily range for each of major currency pairs. In the last three months, most of the leading pairs have noticed their averages fall quite rapidly as indicated by the Average True Range indicator.
So, if the same trend continues, it leads to smaller and smaller trading range at the end of each day.
Necessary Precautions
As for those who don’t know, by the end of December 2010 the average range of the GBP /USD pair was 135 points at the time of writing. People, who enjoy early morning breakouts, must be cautious about trading early in the morning by taking in consideration of overnight trading points range. Moreover, if the range is between 30 to 60 points and breakout takes place, then there is plenty of room for the price to move strongly in the expected direction. This is the same situation when the trading range was in excess of 200 points, and we were sure about the price heading towards the right destination.
Longer Term Trades
Long term trades are always more reliable than the short term trades. Most of the traders are busy trying to get quick profits. However, it is quite a known fact that trading ranges are quite minor now a day’s for major pairs. Usually most of us are far much better off trading the four hour and daily charts. The overall trend, forex trading system uses the daily chart and the four hour chart for pinpointing entry and exit points.
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Posted on 17 August 2009
Tags: additional decimal place, change in the last decimal point, currencies, currency pairs, currency trading, electronic platforms, EUR/USD, exchange rate, foreign exchange market, forex, Forex Market, Fractional Pips, FX market, FXCM's Trading Station II, greater price transparency, Japanese yen, last decimal point, major currency pairs, minimum fluctuation point, Percentage in Point, Pip, pips, price competition, smallest price change
In finance, the smallest price change that a given exchange rate can make is referred to as percentage in point also known as pip or point. Since most major currency pairs are priced to four decimal places, so the smallest change is the change in the last decimal point, for most of the currency pairs this is the equivalent of 1/100 of one percent, or one basis point.
Some additional information is needed in order to calculate the pip value or to know that how much is one pip, this information includes: trading size, leverage used, and the actual rate of that particular pair for which you want to calculate the value of pip. For instance, in case of US Dollar, having the trading volume of 1 lot (generally it is equal to 100,000 units of the base currency), 10 USD will be the minimum fluctuation point.
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