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Monday, October 16, 2006

How to make money

How to make money easy and faster ?

That it's the questions who many people it's looking for. The answer is Forex (Short for "Foreign Exchange"; refers generally to the Foreign Exchange trading industry and/or to the currencies themselves) . Forex means that you can buy or sell on different pairs (ex: GBP-USD, EUR-USD, USD-JPY, USD-CHF.....). One transaction it's made by selling or buy(means that you open a position) and after you'll consider that position must be closed you buy or sell. You buy from Bid (Price at which broker/dealer is willing to buy) and sell in Ask (Price at which broker or dealer is willing to sell; same as "offer"). If you are consider the trand would be up you buy, if you'll consider the trand would be domn you sell. Bid/Ask Spread (or "Spread") is: The distance, usually in pips, between the Bid and Ask price. A tighter spread is better for the trader. The cost of Carry (also "Interest" or "Premium") is: The cost, often quoted in terms of dollars or pips(Pip: The smallest price increment in a currency. Often referred to as "ticks" in the futures markets. For example, in EUR-USD, a move from 1.2715 to 1.2716 is one pip or one tick) per day, of holding an open position. Drawdown means, the magnitude of a decline in account value, either in percentage or dollar terms, as measured from peak to subsequent trough. For example, if a trader's account increased in value from $10,000 to $20,000, then dropped to $15,000, then increased again to $25,000, that trader would have had a maximum drawdown of $5,000 (incurred when the account declined from $20,000 to $15,000) even though that trader's account was never in a loss position from inception. The leverage is the amount, expressed as a multiple, by which the notional amount traded exceeds the margin required to trade. For example, if the notional amount traded (also referred to as "lot size" or "contract value") is $100,000 dollars and the required margin is $2,000, the trader can trade with 50 times leverage ($100,000/$2,000). You can sell/buy let a order ( an order to buy at the current Ask price ) and you'll be able to put a limit order ( an order to buy at a specified price when the market moves down to that price, or to sell at a specified price when the market moves up to that price ) or a stop order ( an order to buy at the market only when the market moves up to a specific price, or to sell at the market only when the market moves down to a specific price). Also you can buy/sell on spot market ( an order to buy at the market only when the market moves up to a specific price, or to sell at the market only when the market moves down to a specific price ).
An advice, be carefull, don't bid all you money at one position because the course it's not every time on your side. Good luck !

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