Leveraged Trading

What is a leveraged trading ?

It's a question that any trader may ask himself / herself at the beginning.
It's one of the key advantages behind Forex trading.
Traders use leverage to increase the returns can be provided on an investment.
Leverage is actually a loan that is provided by brokers to traders (Investors).
The usual amount of leverage offered by brokers are 50:1, 100:1, 200:1 and 400:1.
Most brokers have set 100:1 as their default trading leverage.
Standard trading is done on 100,000 units of currency and called LOT.
When leverage is set to 100:1 an investor can trade 100,000 units with only
1000 units of funds.
Leverage is actually a double edged sword, it can bring a lot of profit to a trader,
or it can cause the trader loose his / her deposit quickly.
Trading on leverages over 100:1 is NOT recommended.

Happy Trading.

Stay Away From SCAMs

"Make 300% returns quickly"
"Guaranteed profits!"
"No lose!"

There is no perfect trade, you may and will loose money in Forex.
If you see catchphrases like these, stay away from it, any guarantee 
in forex world is a scam.

I have quoted Wikipedia's page about FX fraud:
"Foreign exchange fraud is any trading scheme used to defraud traders by convincing them that they can expect to gain a high profit by trading in the foreign exchange market. Currency trading "has become the fraud du jour" as of early 2008, according to Michael Dunn of the U.S. Commodity Futures Trading Commission. But "the market has long been plagued by swindlers preying on the gullible," according to The New York Times. "The average individual foreign-exchange-trading victim loses about $15,000, according to CFTC records" according to The Wall Street Journal. The North American Securities Administrators Association says that "off-exchange forex trading by retail investors is at best extremely risky, and at worst, outright fraud."
The foreign exchange market is at best a zero–sum game^] meaning that whatever one trader gains, another loses. However, brokerage commissions and other transaction costs are subtracted from the results of all traders, making foreign exchange a negative-sum game."
Original Link

Cheers
Eklogite
 

Glossary

In this post, I'm going to help you with the forex glossary.
Terms and words most used in Forex are explained and meant here.

Ask
The price at which the currency is offered.

Base Currency
The primary currency used a base to quote a pair.

Bear

Person who believes the prices will drop or decline.

Bid

The price a trader will sell the currency.

 

Broker

The agent handling investor's orders to buy and sell currencies. 

In the Forex business, commission is not charged because the broker makes money through the spread.

 

Bull

Person who believes the prices will rise.

 

Currency Swap

Contract committing two parties to exchange streams of interest payments in different currencies for a known period of time at an agreed exchange rate when matured.

Foreign Exchange, Forex or FX

Buying of one currency and selling of another in the market.

High/Low

Higher and lower traded values in a chart time frame.

Margin

Required initial deposit to enter into a position. Must be deposited to cover any potential losses from movements in prices.

 

Open Position

 A deal that has not been yet settled by physical payment or reversed by an equal and opposite deal for the same value date. 

 

PIP

Term used to represent the smallest incremental move the exchange rate makes

 

Resistance

A price level selling is expected to take place.

Short

Selling an instrument or currency, means you have a currency and sell it against another.

Spread 

Difference between the bid & ask prices, used to measure market liquidity. 

 

Support Levels

The price level buying is expected to take place. 

 

Technical Analysis 

forecasting future market activity by analyzing market info and data such as price trends, volume, charts and etc...

Sincerely.

Eklogite

Beginning

Hi all,

We start now, Forex is short for Foreign Exchange, but we refer to currencies.
Stock trading is also possible, but it depends on the broker you choose. Most
brokers support major currencies. A pair of two countries currencies are exchanged.
For example Euro Against US dollars.

Forex RISK
Risk involved in trading currencies, you may or may not loose all your deposit.
It is always recommended trading only 10% of your deposit to minimize the risk.
The market pricing mechanism is affected by supply and demand.

Pros and Cons of trade,
Forex market is the largest trade volume in the world. therefore the most liquidity is offered.


For most traders, Swing or Day trading for a while can be a good way to play the forex markets. To learn forex, opening a demo account helps a lot.
But when you go in real money deals, there is a lot of stress that comes to play.

Finishing my words in this post.
In my next post, I present a good Forex glossary for traders to understand the basics.


WARNING: I am not responsible for your loss. FOREX IS RISKY.
This weblog is for information only and does not include a guaranteed trade path.


Cheers.
Eklogite

Welcome to my blog.

In this blog, I had tried to assist forex beginners to make some money and let them know
which risk forex does have for their hard earned money.

There will be a lot of sections for you guys, feel free to contact me if you have any suggestion or complaint.

Sincerely.
Eklogite