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Transactions in Forex Trading


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11 replies to this topic

#1
dhanpreet

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Transactions in Forex Trading

This time I will discuss about the transactions in forex trading: what is traded, how much and also the types of transactions that can be done in forex trading.
What is traded in forex trading?
Sounds like a stupid question ... yes? Guys, this is forex trading, yes of course forex trading or foreign exchange ... hehehe ... yup, that's right ... But, there is further need to know if you want to become a forex trader.
In forex trading, currency pairs traded. This is called pairs. Examples of the usual pair provided include EUR / USD, Euro and the currency pair means the U.S. Dollar. Another example: GBU / JPY, GBU / USD, USD / JPY and others

Why this currency must be installed, attach it? Hehehe ... this is interesting ... With traded in pairs like this, then we can directly transact "sell" on a pair, without us having to "have" the first pair.

Confused? Just take a look ... in traditional trades, if we sell fried bananas, for example, means that it we should have (at least have the right of) the banana that will be sold. right?

Well, in forex trading, we can "sell" pair USD / JPY without us "have a" pair it ... Lah, how come?
Yes you could ... You see, here we sell klo pair USD / JPY, that means we sell USD and buy JPY. Confused huh? hehehe ... Well ... The main point, in forex trading we can directly conduct transactions, whether selling or buying for all pairs, depending on the results of our analysis of price movements such pair

Pips and Lot
Ok .. now we started to go into basic terms that need to be known in forextrading.

Pip is a unit of value changes in forex trading. Example: EUR / USD moves from 1.3050 to 1.3051, that means the price change (increase) 1 pip. Pip is the added value of each of the last decimal digit behind the comma. Pip is also commonly used for the calculation of profit or loss.

Well, the Forex market are usually traded in lots. The default value per lot is $ 100,000. There is also a mini lot with a value of $ 10,000. However, there are also brokers that offer flexibility in transaction volume without having the units of lots, but in a quantity that is flexible in accordance with the wishes of traders.

Bid, Offer, and Spread

Well, next we need to also understand what the bid and offer price as well as a spread.

Bid is the price prevailing when we sell (pair), Offer is the price prevailing when we bought (pair) while the spread is the difference between bid and offer

Examples such as:

For EUR / USD applies:
Bid 1.3050
Offer 1.3052

Meaning, if we're going to buy a pair EUR / USD it will be priced at 1.3052, while if we sell will be charged the price of 1.3050. Spread for pair EUR / USD when it is 2 pips.

The types of transactions in Forex Trading

Now we will enter in a discussion of transactions in forex trading.
In general, the transactions that we can do is to Buy and Sell on pairs that are available.

There are 2 kinds of orders / orders for each transaction that is:

Instant executions
Order (buy/sell) made at the current market price.

Pending orders
Order which will come to pass if touching a certain price point (in other words the price of booking)

Pending orders are divided into 4 types:

Buy Stop:
Installing the buy order at a certain price (above the current price), in the hope the price moves up, and the price will automatically go buy orders. The hope, of course, the price continues to move up again in order to gain profit.

Sell Stop:
Installing the sell order at a certain price (below current price), with the hope the price goes down, and the price will automatically go sell order. We hope prices will continue to move down again in order to gain profit.

Buy Limit:
Installing the buy order at a certain price (below current price), with the hope the price moves down to that price. If the price we have set it touched, then the buy order is automatically run. The hope, after that the price then moves up or mental term in that price.

Sell Limit:
Installing the sell order at a certain price (below current prices) in the hope the price moves up to that price. If we set the prices that have touched it, then run automatically sell order. The hope, for after that prices will move down (or mentally at that point) in order to profit.


When to Buy and When to Sell?

Well, there it is a fundamental question for a trader.

Said the master of hell ... the basic benchmark in forex trading are: Buy when the price is low and we expect going up, and Sell when prices are high and we expect going down.

Simple right? Hehehe ...

The problem then is: how do we know that prices are going up or down?
Hmmm, to answer this question, then we get into a discussion of the analysis in forex trading that we shall discuss in subsequent post ...
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#2
omarelalfy

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Installing the sell order at a certain price (below current prices) in the hope the price moves up to that price. If we set the prices that have touched it, then run automatically sell order. The hope, for after that prices will move down (or mentally at that point) in order to profit.
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#3
standart

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I always trading with instant executions because now I am do scalping. so I am not use pending order and wait the price touch our price order. even as long as trading, I never tried to use pending order.
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#4
ellliottt

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You should only invest the amount which you can afford to lose" is best quote for every action in investing, so everyone have to realize the risk .....




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#5
yogesh

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Nicely explored all aspect of a transaction in forex. I rather think each trade should be closed when it give adequate profit as we should not forget that while making an entry we are charged with spread so at least our trade should give us the spread+double the gap of stop loss and then only our over all no. of trades may consolidate into good profit.
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#6
Pamm Manager

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Trading on FOREX is like playing sports. Constant trainings are required. Without them, you will loose your shape and won't be able to continue at the same rate. You had better trade every day, analyze news, which can influence the market's movements, develop your own strategies, improve the ones that you already have. You must study, read a lot and progress while trading. It's vital not to stand on the same place and just wait for a trend, but to analyze and study all the opportunities and situations.
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#7
RASTA

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Trading on FOREX is like playing sports. Constant trainings are required. Without them, you will loose your shape and won't be able to continue at the same rate. You had better trade every day, analyze news, which can influence the market's movements, develop your own strategies, improve the ones that you already have. You must study, read a lot and progress while trading. It's vital not to stand on the same place and just wait for a trend, but to analyze and study all the opportunities and situations.

but different between exercise training with foreign exchange trading forex if you are in demand to perform better in the trade with the knowledge while you exercise only in your sport demands understanding techniques


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#8
standart

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the beauty of forex trading is we can trade at current time or in future time. traders can open positions in place where price doesn't arrive yet. by open pending order. however, it require analysis to point out the level. if traders not place the order at good level, probably it won't going to get hit.


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#9
Decub

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Forex is all about the buying and selling of foreign currencies. It's about trading in them with a bid to make profit in the process. That which is of paramount importance is the ability for the trader to generate profit off his trades. Every one is in for profit and for it to come to pass, there must be a loss from one end before another can gain.
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#10
myregister

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Forex is all about the buying and selling of foreign currencies. It's about trading in them with a bid to make profit in the process. That which is of paramount importance is the ability for the trader to generate profit off his trades. Every one is in for profit and for it to come to pass, there must be a loss from one end before another can gain.

What you said above are true transaction in forex means exchanging service. Where one trader will buy while the other sell that currency. It is simple yet is one of the important part where traders can get profit and could give effects to the market's price.


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#11
sidejob

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Therefore with the 2 parties who try to make transactions then the forex can also run right? Basically the forex is 80-90% is market speculation, the trader buys or saves money and then sells it when the price goes up, and this is also through the bid process. Overall it is about the transaction and speculation on the market through the eyes of traders and big institution.


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#12
myregister

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Trading by speculate with the price, they hold the price for a while by buying or selling currency, if the price is like what they expect it will rise or fall and then by few seconds, people make money from the price difference. Big institution also making money and actually way bigger than typical retailer trader.


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