Charts and Quotes

Why Charts and Quotes?
Charts and quotes are the language of forex prices. Expertise in reading charts and understanding quotes is a valuable--even essential--weapon in the successful forex trader's arsenal. Effectively reading charts and quotes requires being familiar with numbers and decimal places and basic math principles like addition and subtraction, multiplication and division. To being exploration of charts and quotes, let's review some basic information covered in previous sections.
Currency Pairs, Base currency & Quote currency
In forex trading, a trader buys one currency at the same time he sells another, or vice versa. The two currencies are commonly called a currency pair. Both currencies are listed together so the trader can know exactly what value is placed on the currency bought and the currency sold. For example as USD/CAD quote might be displayed as 1.0438/41. In this example the first currency, the United States dollar, is called the base currency and the second, the Canadian Dollar is the quote currency.

For many currency pairs, the U.S. Dollar is used as the base currency, reflecting in this case the value of the CAD (the quote currency) in relation to 1 USD. This example indicates that 1 USD can buy 1.0438 Canadian Dollars, or that it takes $1.0438 Canadian Dollars to purchase 1 US Dollar.
Not all currency pairs use the USD as the base currency. For example, when the Euro was introduced in 1999, the government of the European Union decreed that all foreign exchange quotes using the Euro would place the value of the Euro first. Therefore, quotes involving the Euro would read as follows: EUR/USD 1.4545, meaning that one Euro will buy 1.4545 USD. Two other notable currencies are listed as the base currency in all quotes, even against the USD; the Great Britain Pound (GBP), and the Australian Dollar (AUD). In some cases, neither the USD nor the EUR are found in the base currency or quote currency. Such currency pairs are called cross rates. An example of a cross rate is CAD/JPY (Canadian Dollar/Japanese Yen). (Note that definitions of the term cross rate vary. Some rely upon the context of the county in which the term is used - seemingly an arbitrary definition in a global marketplace.)
Bid/Offer and Ask, Spreads
In any forex transaction, one currency is sold at the same time another is bought. Just as in an auction, the foreign exchange market uses the terms Bid and Ask to describe the value of the currency. The difference between the Bid and the Ask, also known as the spread, is used to calculate the amount of profit or loss on the trade.
Forex rates are often stated with both Bid and Ask included together, separated by a slash:
For example the term USD/CAD 1.0438/41 indicates that the bid price for USD/CAD is 1.0438, the ask price is 1.0441, and the spread is therefore 0.0003, or of 3 pips.
Remember: the Ask is the price at which a Trader might purchase the currency pair, while the Bid is the price at which a Trade might sell the same pair. The Bid is almost always lower than the Ask price, except in unusual conditions seldom (if ever) experienced by the speculator
As an example of how the quote prices relate to trading, consider the following:
Assume that the current price of United States Dollars when compared to Canadian Dollars is USD/CAD 1.1000/03 (the Bid is 1.1000 and the Ask is 1.1003, and the spread is 0.0003, or 3 pips. At those rates, a trader wanting to buy one USD would pay 1.1003 CAD, while he could sell one USD for 1.1000 CAD. To put this in practical forex-trading terms, a trader wanting to buy 100,000 USD would require $110,030 CAD, while 100,000 USD could be sold for $110,000 CAD.
If the trader purchases USD/CAD at those rates, and then trader waits until the forex price quote rises to USD/CAD 1.1006/09, he could sell his USD/CAD position for $110,060 CAD earning a profit of $60.00 CAD.
However, if the price for the USD/CAD does not change in the time the trader holds the position, and the traders sells the USD at the same price 1.1000/03, the position would be sold for $110,000.00 CAD, creating a loss of $30.00 (the amount of the spread).
What is a pip? What is it worth?
Profits, losses and spreads in forex trading are often expressed as pips. A pip is the smallest unit of price for any currency. It is short for "Percentage in Point". In forex trading, currency values are usually stated very precisely, to the fourth decimal point. A pip is the smallest change in the fourth decimal place, or 0.0001. For example, for USD, a pip is 1/100th of a cent. The Japanese Yen is the only currency expressed to the second decimal place, making a pip 0.01 in this case.
Forex Charts and Technical Analysis
Often, forex markets are studied through the use of charts that show market prices over a period of time. Traditionally, financial charts were drawn by hand. Fortunately, today such charts arehttp://forex.tradingcharts.com/chart/ available through forex trading platforms, and are available online on websites such as this one  .
Charts are used extensively by traders, to study past patterns of price movement, identify ongoing trends, and to try to forecast future price movement. Technical indicators are often used in conjunction with charts. Simple technical indicators include moving averages. Many complex indicators are available, which involve complex mathematical analysis of price data. Fortunately, online charts do all the calculations automatically, and display the results as overlays on the chart.
Forex charts are usually presented in one of several formats, including line, bar chart and candlestick.
Technical Analysis
Technical Analysis goes hand-in-hand with forex charting. Technical analysis attempts to forecast future price movement through the mathematical analysis of past price action. Various simple tools can be used in technical analysis, such as moving averages, trend lines and support levels, or the advanced trader might choose from a wide range of advanced analyses and theories including relative strength index, Fibonacci studies, cycles, and more.

Future Trading

“A Future trading is a financial exchange where people can trade future contracts”. Simply, it is buying or selling a specified quantity and quality of a financial instrument at a specified time in the future at a price determined at the time of purchase and sale. Many people take it as a complicated, high stakes, risky business. This misconception is due to the lack of the proper financial knowledge and a clear understanding of its purpose. Because of high gain and financial security in future market, many professional traders don’t trade the stock market any longer.
The best way to start the trade is to get educated. Many seminars are offered by reputable broking houses to learn future trading from experienced traders. A specialized mentor can save a lot of time and money.  Most traders are now relying on technical analysis to predict price fluctuation, to predict entry or exit price levels and timing. There is no magic formula exists to analyze the market. Fundamental analysis is one way to evaluate whether a market is likely to go higher or lower.
Future contracts can be purchased on margin, meaning that an investor can buy a contract with a partial loan from his or her broker. Maintenance Margin is the amount of money that a trader must maintain in his account in order to keep a future position running. If cash balance falls below this level, he/she would receive “Margin Call”, a notification from broker to top up his/her margin balance with cash back up to its initial margin level.  It is done so that trader’s entire equity can’t be wiped out. Future trading is a zero-sum game; means if somebody makes a million dollars, somebody else loses a million dollars. Future traders have an incredible amount of leverage on them. Despite of all these problems, future trading is one of the best ways to make some quick profit.

How Forex Brokers Work

Like any other business in the history of business, your broker’s raison d’etre, is to make as big a profit as possible. There are about as many ways to go about this as there are brokers. For those who are in it for the long haul, however, it is generally best to adopt a set of practices which are deemed fair by their clients: certain boundaries are set, and operating beyond them can cost a brokerage its reputation, and along with it its clients. Straying outside these boundaries, therefore, is not considered as being in line with the long term goals of the business. How strictly these boundaries are enforced, especially when there is little chance of clients ever even becoming aware of any transgression, again varies from business to business. For the sake of simplicity, in this article we assume that everyone in the business is squeaky clean, as if every client could peek into the broker’s back office at any time and dissect every trade. This is obviously not the case, and many brokers do take advantage of this opaqueness, but the details of that are best left for another discussion.
So without further ado, let’s get into the details of how forex brokers function. Somewhat removed from the top-tier interbank market, retail forex brokers are there to provide a service that would otherwise not be available, that is, giving an investor with a $10,000 bankroll the chance to speculate in the up-until-recently very exclusive forex market. There are generally considered to be 2 types of brokers providing access at the retail level: Electronic Communications Networks (ECNs) and Market Makers. ECNs are generally somewhat more exclusive, requiring larger deposits to get started, but are seen as providing more direct access to the interbank market. As we will see, there are certainly advantages to this, but some disadvantages as well. Market makers, on the other hand are more often than not, the counter party to their clients’ trades, creating somewhat of a conflict of interest, whereas ECNs profit from commission fees charged directly to the clients, regardless of the result of any trade, they are seen as being completely impartial – an ECN has no incentive for a client to lose money. In fact, one could argue that an ECN stands to profit more if a client is successful, meaning that s/he will stay around longer and they will be able to collect more commission fees from them. A market maker, on the other hand, being the counterparty to a client’s trade, makes money if the client loses money, providing an incentive for some shady practices, particularly in an unregulated market. The extent to which this happens varies among individual blo. There are akers lso some benefits to trading with a market maker (see our ECNs vs. Market Makers article) Some brokers also provide a service that doesn’t quite fit into either category – they route different orders differently, depending on complex algorithms, or on a dealing desk, that analyze each order and attempt to fill it in the way that will be most beneficial to the broker’s bottom line. They can offset some client orders against one another, effectively creating an in-house market, they can choose to be the counterparty to a client’s trade (trade “against” the client), or they can offset their position with a hedge through a higher-tier counterparty. Note that the market maker is mainly concerned with managing its net exposure, and NOT with any single individual’s trades. They are NOT gunning for your stop losses specifically, but may be gunning for clusters of stops.
If you have already read the first article in the series, structure of the forex, you will recall that market mechanics are responsible for the variation in bid/ask spreads, and also for slippage. So it seems the two biggest novice traders’ pet peeves are not so much a function of who their broker is, but rather their lack of understanding of the way the forex market operates. A broker that offers a fixed spread tends not to fill orders during periods of low liquidity because this would expose them to undue risk, and as much as their job is to cater to their clients, remember they are in business primarily to make money for themselves. Some brokers also offer guaranteed order fills, such as “guaranteed stop losses”. Again, if there is no counter party to take the trade, they have to expose themselves to risk in order to fulfill this guarantee, so don’t be surprised if you see such a broker quoting different/delayed prices around important trend lines or support/resistance levels. Be especially aware of brokers who offer both guaranteed fills AND fixed spreads.

New Forex Trading

People say trading is hard and I agree. Its hard because we dint have the answer. There is no spoon. There is no answer. What we have is our mind and our eyes. I haven heard of any blind traders yet.

In order to be profitable in forex trading online you must train your mind. It seems the more indicators you use the harder it is to trade. Keep it simple and remember the principal of trading. BUY new forex make money online WHEN THE PRICE IS GOING UP AND SELL WHEN THE PRICE IS GOING DOWN.

Can anyone tell me when the price of goods fall between 1<0 is going up or down in this chart???