base currency Article
Below,
you'll find extensive information on leading base currency articles
and products to help you on your way to success.
Example Of A Profitable Transaction In Forex
By By Omar Vargas
To make a profit, in the FOREX, a trader can enter the market as a *buy position* (known as going "long") or a *sell position*(known as going "short"). For discussion, let's assume you've been studying the EURO. Your trading methods, rules, strategies, etc., tell you that prices will rise during a particular timeframe. So you buy the EUR/USD pair (or, technically, you will simultaneously buy euros, the base currency, and sell dollars). You open up your handy trading station software (provided to you for free by the online broker), which resides on your desktop, and you see that the EUR/USD pair is trading at: << EUR/USD: 1.3242/45 >> REMEMBER: the quote to the left of the / (1.3242) refers to the bid or "sell" price (what you obtain in USD when you sell EUR). The quote to the right of the / (1.3245) is used to obtain the ask or "buy" price (what you have to pay in USD if you buy EUR). So, since you believe that the market price for the EUR/USD pair will go higher, you will enter a *buy position* in the market. For simplicities sake, let's say you bought one lot at 1.3245. As long as you sell back the pair at a higher price, then you make money. But, no worries. This seemingly elaborate process is handled, and even calculated for you, via the broker's software mentioned above. The chart software and the quote board are in agreement with all sides of the currencies. To illustrate a typical FX SELL trade, consider this scenario involving the USD/JPY pair: REMEMBER ~ Selling ("going short") the pair implies selling the first, base currency, and buying the second, quote currency. You sell the pair if you believe the base (USD) will go down relative to the quote (JPY), or equivalently, that the
British Pound Hits 6-Week Low Against US Dollar
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.dailymarkets.com/forex/2010/09/07/british-pound-hits-6-week-low-against-us-dollar/" style="font-size:1.2em">British Pound Hits 6-Week Low Against US Dollar</a>
<br> <span style="color:#888888;">Daily Markets</span> - <span style="white-space:nowrap">7 hours ago </span>
<div style="width:80%;">Price action on GBP/USD (a 4-hour chart of which is shown) as of Tuesday (9/07/2010) has tentatively broken down below the previous major low of 1.5325 hit in late August to establish a new 6-week ...</div>
</div>
British Pound Focus is on 14980
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.dailyfx.com/forex/technical/elliott_wave/gbp-usd/2010/09/07/eliottWaves_gbp-usd.html" style="font-size:1.2em">British Pound Focus is on 14980</a>
<br> <span style="color:#888888;">Daily FX</span> - <span style="white-space:nowrap">9 hours ago </span>
<div style="width:80%;">No change: ?The British Pound has not found the support that the Euro has enjoyed. Watch the channel for support as well as 15250 and 15125. The pattern of the decline from 16000 is not clear-so ...</div>
</div>
Great British Pound vs. Japanese Yen (2010-09-07)
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.ibtimes.com/articles/60014/20100907/great-british-pound-vs-japanese-yen-2010-09-07.htm" style="font-size:1.2em">Great British Pound vs. Japanese Yen (2010-09-07)</a>
<br> <span style="color:#888888;">International Business Times</span> - <span style="white-space:nowrap">17 hours ago </span>
<div style="width:80%;">The GBP/JPY pair is still finding a solid support above 128.75 zones as seen on the provided four hour chart. RSI 14 indicator- momentum indicators' representative- is still carried above the ...</div>
</div>
Buy British Pound at $1.5480, Mizuho Says: Technical Analysis
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.businessweek.com/news/2010-09-06/buy-british-pound-at-1-5480-mizuho-says-technical-analysis.html" style="font-size:1.2em">Buy British Pound at $1.5480, Mizuho Says: Technical Analysis</a>
<br> <span style="color:#888888;">BusinessWeek</span> - <span style="white-space:nowrap">Sep 6, 2010 </span>
<div style="width:80%;">By Anchalee Worrachate Sept. 6 (Bloomberg) -- Investors should buy the British pound should it rise to $1.5480 as trading patterns suggest the currency will appreciate further, according to Mizuho ...</div>
</div>
Exchange Rates: British Pound hampered by latest Economic data
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.economy-news.co.uk/exchange-rates-06201009.html" style="font-size:1.2em">Exchange Rates: British Pound hampered by latest Economic data</a>
<br> <span style="color:#888888;">Economy News</span> - <span style="white-space:nowrap">Sep 6, 2010 </span>
<div style="width:80%;">Data that forex traders have been contending with this morning include news that new car sales in Britain dropped by 17.5 percent in August. The Pound Dollar exchange rate is 0.382% lower on the ...</div>
<a href="http://www.fxstreet.com/technical/analysis-reports/daily-currencies-report/2010-09-07.html">Forex Daily News: GBP Drops Against EUR, USD</a> - <span style="color:#888888">FXstreet.com The Forex Market</span><br>
<a href="http://www.istockanalyst.com/mobile/viewarticle.aspx?articleid=4474152">Thin Trading On US Labor Day Dampens Risk Appetite, Boosts USD</a> - <span style="color:#888888">istockAnalyst.com</span><br>
</div>
British Pound Tumbles Against Majors
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.rttnews.com/ArticleView.aspx?Id=1410510" style="font-size:1.2em">British Pound Tumbles Against Majors</a>
<br> <span style="color:#888888;">RTT News</span> - <span style="white-space:nowrap">Sep 6, 2010 </span>
<div style="width:80%;">(RTTNews) - During early European deals on Monday, the British pound fell sharply against its major counterparts despite a rise in regional stocks. The pound fell to a 4-day low against the dollar ...</div>
<a href="http://www.dailyforex.com/forex-fundamental-analysis/2010/09/Euro-s-party-is-ruined-by-the-Stress-Test/5889">Euro's party is ruined by the Stress Test</a> - <span style="color:#888888">DailyForex</span><br>
</div>
Momentum Holds US Dollar While Sterling Continue To Recover
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.actionforex.com/analysis/daily-forex-technicals/momentum-holds-u.s.-dollar-while-sterling-continue-to-recover-20100906121705/" style="font-size:1.2em">Momentum Holds US Dollar While Sterling Continue To Recover</a>
<br> <span style="color:#888888;">Action Forex</span> - <span style="white-space:nowrap">Sep 6, 2010 </span>
<div style="width:80%;">British Pound 1-monthvolatility fell 6.2 percent last week, making for the most sluggish price action among the majors. As with the Euro however, the correlation between sterling and the MSCI ...</div>
<a href="http://www.stockbriefings.com/british-pound-euro-gbpeur-exchange-rate-10/3172490">British Pound Euro (GBPEUR) Exchange Rate</a> - <span style="color:#888888">Stock Briefings</span><br>
<a href="http://www.forexyard.com/en/market-analysis/ny-close/british_pound_falls_to_six-week_low_versus_the_euro-2010-09-06">British Pound Falls To Six-Week Low versus the Euro</a> - <span style="color:#888888">Forexyard</span><br>
<a href="http://www.economy-news.co.uk/exchange-rates-07201009.html" style="color:#009900">Economy News</a>
</div>
British Pound Slips Sharply Against Majors
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.rttnews.com/ArticleView.aspx?Id=1410466" style="font-size:1.2em">British Pound Slips Sharply Against Majors</a>
<br> <span style="color:#888888;">RTT News</span> - <span style="white-space:nowrap">Sep 6, 2010 </span>
<div style="width:80%;">(RTTNews) - After trading higher in early European session,the British currency plunged sharply against major opponents later on Monday. At present, the sterling is trading near a 4-week low of 0 ...</div>
</div>
Great British Pound (GBP) Technical Major Currencies (2010-09-07)
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.ibtimes.com/articles/60037/20100907/great-british-pound-gbp-technical-major-currencies-2010-09-07.htm" style="font-size:1.2em">Great British Pound (GBP) Technical Major Currencies (2010-09-07)</a>
<br> <span style="color:#888888;">International Business Times</span> - <span style="white-space:nowrap">Sep 6, 2010 </span>
<div style="width:80%;">The pair stabilized within the bearish channel below SMA 50, with the current minor support level at 1.5345 impeding attempts to continue the bearish trend. Momentum indicators are showing ...</div>
</div>
Great British Pound vs. Japanese Yen (2010-09-06)
<div style="padding:0px; margin-bottom:1.5em;">
<a href="http://www.ibtimes.com/articles/59698/20100906/great-british-pound-vs-japanese-yen-2010-09-06.htm" style="font-size:1.2em">Great British Pound vs. Japanese Yen (2010-09-06)</a>
<br> <span style="color:#888888;">International Business Times</span> - <span style="white-space:nowrap">Sep 6, 2010 </span>
<div style="width:80%;">The pair inclined respecting the suggested bullish scenario of our last report flawlessly. Now, the possibility of forming a harmonic structure with a 38.2% Fibonacci correction for the XA leg ...</div>
</div>
quote (JPY) will go up relative to the base (USD). NOTE: while the Profit Calculations, on the Short-sell trade scenario below, may seem somewhat complicated if you've never been in the FOREX market before, trust us when we say, "this process is nearly seamless through your broker trade station (software). We're just showing you this thought-process below so you can SEE how a PROFIT occurs even when SELLING a pair. The current bid/ask price for USD/JPY is 105.26/105.30, meaning you can buy $1 US for 105.30 Japanese YEN or sell $1 US for 105.26 YEN. Suppose you decide that the US Dollar (USD) is overvalued against the YEN (JPY). To execute this strategy, you would sell Dollars (simultaneously buying YEN), and then wait for the exchange rate to rise. So you make the trade: selling US $100,000 and purchasing 10,526,000 YEN. (Remember, at 1% margin, your initial margin deposit would be $1,000.) As you expected, USD/JPY falls to 104.26/104.30, meaning you can now buy $1 US for $104.30 Japanese YEN or sell $1 US for 104.26 Since you're short dollars (and are long YEN), you must now buy dollars and sell back the YEN to realize any profit. You buy US $100,000 at the current USD/JPY rate of 104.30, and receive 10,430,000 YEN. Since you originally bought(paid for) 10,526,000 YEN, your profit is 96,000 YEN. To calculate your P&L in terms of US dollars, simply divide 96,000 by the current USD/JPY rate of 104.30. Total profit = US $920.42 Omar Vargas is a freelance writer with articles published in a number of places. You can learn more about Forex trading and its great advantages over other kind of business at this useful website: http://www.1-forex.com
|
